Trouble Brewing in Vancouver’s Craft Beer Scene?

Kurtis Sheldan has a look of tired determination on his face as he surveys the haphazard construction zone that, he hopes, will be a fully operating brewery in a couple of months.

Right now, the only indications of what this mixed-use heritage house in Strathcona used to be—and what it will once again become—are a couple of long-abandoned taps and a mural, painted by darling of the Vancouver art scene Ola Volo, with the branding of the space’s previous owner, Doan’s Craft Beer Company.

Sheldan and Chris Charron are industry veterans who founded Slowhand Beer Company near the end of 2017 specifically, as Sheldan says, to craft “simple, easy beers that are done well.” That means applying the same kind of care and precision that is commonly put toward the trendy beers of the day (hazy IPAs, barrel-aged sours) to more mainstream fare, like pilsners and lagers.

Only one problem. They didn’t have the time or money to invest in a bricks-and-mortar brewery that could take years to get off the ground and risk being flooded out of the market by the many competitors in Vancouver’s brewery scene.

So they brought a recipe to Factory Brewing (since renamed Craft Collective Beerworks) for the team there to create the first Slowhand brews, in hopes of establishing a following that would eventually pave the way for a full-fledged brewery.

A year and a half later, the pair is on track to do just that, and it wouldn’t be possible without what’s called contract brewing. Of course, they were also aware of the drawbacks associated with it—not the least of which was (and still is) the negativity directed to contract brewers from this city’s bricks-and-mortar operations.

“We knew we needed to get our name out there, and needed to get something to market, just to put our foot in the door and get into the broader conversation,” says Sheldan. “It just so happened that we began our business at a time when there was this option, and we took advantage of it. But we were able to finance the business ourselves to get it up and operational, and I think that story resonates with beer drinkers.”

Though the practice of using a contracted facility to brew your beer and then selling it in stores without having a physical brewery is widespread in places like Ontario and much of the United States, it remains associated with controversy in B.C.

“The intent of contract brewing is, if you’re out [of capacity], you can continue to produce. It shouldn’t be, ‘This is my business plan; I’m not going to have a brewery, I’m just going to produce somewhere else,’” says Ken Beattie, executive director of the BC Craft Brewers Guild. “You can’t just be a fellow with a recipe that gets the same benefits as somebody who has invested a million-and-a-half dollars in a bricks-and-mortar spot.”

Beattie adds that breweries with no physical representation don’t exactly add to the provincial economy in the same way that bricks-and-mortar breweries do, nor do they add to the sense of community a local brewery creates: “The magic is going to the brewery, talking to the brewer or the people who work there. If it’s a shadow brand and a marketing company with a recipe, it will dilute the intrinsic value of having these local breweries in 50 to 60 communities in B.C. It doesn’t add to the economy at all, or create jobs, or create an experience.”

Yet, in a city that’s slow to give out permits and has ludicrously high rents and real estate, others argue that contracting has become something of a necessity.

Stephen Smysnuik, former marketing director of Craft Collective and founding editor of craft beer publication The Growler, doesn’t shy away from the fact that there is, indeed, some ill will toward contract brewers in B.C.

 “There’s major backlash from people who don’t like contract brewing and don’t particularly like our business model in general,” says Smysnuik, who recently left Craft to start a new agency. “Contract brewing has been going on for years and years, but it was always this hidden thing, which was weird to me, especially as a reporter covering the beer industry. There was a lot of negativity toward it and that made me uncomfortable; I don’t know why people would be so ashamed by something that is such a wide practice and is considered fine in other communities around North America.”

But it can be seen a slap in the face against those individuals and teams that have put their time (and money) into a full-fledged brewery. Vancouver residents and lifelong industry vets Ralf Rosenke and Aly Tomlin took their talents to Cowichan Valley for the sole purpose of starting a brewery in 2013.

Three years later, they finally started Riot Brewing in Chemainus, about an hour away from Victoria. “It’s done what we envisioned it to do, minus the money,” says Tomlin of Riot, which won two awards at the 2018 World Beer Awards, more than any other B.C. operation. “I think we’ll make it and be fine, but right now it’s still just a revolving door of cash we don’t have.”

So when Craft Collective first opened in 2017, it represented something of a sea change. While other breweries occasionally employ contract brewing—Strathcona —Craft was the first space dedicated to that one purpose.

Since then, the company has made major moves, including last October’s acquisition of Postmark Brewing. And it has different agreements with others in the industry, like Doan’s, which employs co-founder Evan Doan and allows him to produce his beer out of Craft’s facility.

For his part, Sheldan plans to keep brewing most of his large orders at Craft Collective, and work on smaller batches at the physical brewery. It’s a necessity given the size of Slowhand’s operation and the demand its lager and pilsner have created in the market.

“Yes, having a brick-and-mortar brewery will shield us from some criticism—it’s more legitimizing to have a facility—but we’re going to continue to use contract brewing,” says Sheldan.

“The B.C. beer market is still trying to figure out what it is, and anything that’s new, that flies in the way of conventional thinking, is always going to ruffle feathers. Contract brewing is mostly really harmless, assuming that the market is smart, and the market will figure out what it likes and who it wants to support. As long as the market continues to be engaged, I don’t see any reason to fear contract brewing.”