Trouble brewing: Why B.C.’s craft beer boom is going flat

The hype around craft beer has always been driven by novelty. And by the start of 2025, it seemed like everything had been done. The excitement around the industry—a thriving, restlessly creative community a decade ago—had all but died down.

Then, suddenly—there was Threefold.

The East Vancouver brewery, which opened in April, has generated a healthy amount of buzz on social media for bringing together three separate breweries—all respected as masters of their niches—under one roof: Slow Hand, specializing in lager; Boombox Brewing, known primarily for its hazy IPAs; and Temporal Artisan Ales, specializing in barrel-aged beers.

“The hype around beer has gone down so much; you really need a high value offering to make something exciting in beer nowadays,” says Threefold co-founder Matt Kump.

The company’s approach embodies a creative representation of the industry’s most recent trend: consolidation and amalgamation. At a time of rising costs and shrinking margins for craft brewers, several companies have banded together to make the business work.

“We’ve been trying for years but couldn’t find [a space] that suits both cost and need,” Kump says, noting that the rental costs for a production facility were always the greatest barrier. He could never make the numbers work when just a single brand was carrying the space.

All three breweries have a representative shareholder in the new venture—housed in the former Andina Brewing, which closed in 2023—while each one remains an individual company outside of Threefold.

“With something like this, you have more people carrying the weight, both in terms of creative output that goes into the tasting room but also cash flow in,” Kump says. “We don’t have to rely on a single brand to make everything work. Threefold can also pivot here—we’re our own business. There’s a bit of flexibility there.”

Consolidation has become a clever solution to a problem facing all 240+ breweries across the province. The cost of goods, including ingredients and packaging equipment, has risen 32 percent since 2020—the result of supply-chain issues created by the pandemic—while prices to the consumer have had to remain more or less flat. Rent increases, decreasing market share and evaporating margins have resulted in 20 breweries shuttering in the last 10 months as of the time of writing.

“It’s an incredibly complex business,” says Chris Bjerrisgaard, founder of Small Gods Brewing in Sidney. “You’re going to be a hospitality operator, which is one of the highest failure rates of business, period. Then you’re also going to be a consumer packaged goods beverage alcohol manufacturer, which is highly government-regulated and complex in itself. Then you are also going to be—if you’re smart and don’t want to give all the profit away—a distributor, warehouser and sales agency on some level.”

In other words, there’s no room for error, even in the best of times. Then COVID hit, upending the industry completely. Tasting room sales plummeted. Craft breweries that relied on those sales shifted to wholesale distribution, which then flooded the shelves. The issue was exacerbated by falling craft beer sales across the country, B.C. included. What was already a challenging business saw proprietors dealing with shrinking margins on products that already had tight margins.

“The industry has never recovered from COVID,” says Ken Beattie, executive director of the B.C. Craft Brewers Guild. “There was no post-pandemic boom. We were all expecting the Roaring ’20s, but what’s really happening is costs continue to escalate for everybody.”

Consolidation has gained favour with business owners to stave off closures and to inject some excitement back into the industry. This isn’t anything new, either—consolidation has been happening in U.S. craft beer markets for well over a decade. Locally, several businesses tried a similar approach during that same period. Callister Brewing, which is now closed and was spun off into Callister Craft Soda, was home to several smaller brewing companies, serving as a launchpad of sorts. Craft Collective Beerworks purchased the assets of several beer brands, including Postmark and Doan’s, before going belly up in 2020.

Craft Collective’s founder, Andrew Harris, has launched a new and similarly named venture, Craftside Beverages, which has purchased Fuggles Beer (formerly Fuggles and Warlock) and Container Brewing. All core products for both breweries will be brewed out of Fuggles’ Richmond facility, with Container maintaining its small-batch operations out of its East Vancouver location.

Other attempted solutions include Victoria’s Vancouver Island Brewing shuttering its production facility and moving in with its neighbouring brewery, Phillips Brewing, while retaining separate business ownership. Slackwater Brewing closed its Penticton brewery and tasting room last October and merged with Parkside Brewing in December 2024, brewing out of its sister company, Rewind Brewing in Port Moody’s Brewers Row.

Then there’s Twin Sails Brewing, which merged with fellow Brewers Row operation Brave Brewing back in the spring. Clay Allmin, Twin Sails’ CEO and co-founder, says the merger is all about “survival through the collective.”

“We can consolidate production, cut labour costs and find cost savings and ingredients through bulk buying—all of those things just make sense in an economy where your profit margins are being squeezed at every corner,” Allmin says.

The deal means that Twin Sails can focus on experimenting with small batches and new beverage concepts, while shifting part of the production of its core products to Brave, which had excess capacity before the merger.

“We started this business to be innovative and collaborative,” Allmin says. “Hopefully this brings some joy back to the market, because what the craft beer industry was five years ago was a community. That’s all kind of disappeared.”

Likewise, so have the margins. Beattie says that costs have gone way up, while very little of that is being passed on to the consumer.

“You can’t do that here, because you’re competing on a price continuum that is dominated by the world’s largest players [including AB Inbev and Molson Coors], who keep the cost at a certain price,” says Beattie.

The result is that, as affordability becomes more challenging for consumers, beer drinkers are going with the cheaper option, regardless of quality.

“Beer is one of those luxury spends, so right now, amid economic uncertainty, retailers are selling way more value stuff than they have in 20 years,” says Kurtis Sheldan, president and co-founder of Slowhand. “Cases of [domestic beer] are flying out the door again. And I think it’s just symptomatic of uncertainty in economic markets.”

The guild has been focusing its efforts lately on working with the provincial government to review the markup schedule to better reflect current market realities and level the playing field for the beer industry. It launched the “Protect B.C. Craft Beer” campaign in August, urging beer lovers to contact their MLAs to demand a fairer tax system for small brewers. Beattie says that the cost of doing business in B.C. is “difficult” for smaller operations of all kinds right now, and without taxation relief from the province, he predicts up to 40 more breweries could shut down by summer 2026.

While other alcohol producers face similar headwinds, the same solutions don’t necessarily apply to craft brewers. Beattie points to the removal of interprovincial trade barriers, prompted by President Donald Trump’s tariffs on Canadian imports, and the resulting retaliatory measures from the federal government.

“It’ll be great for spirits. It’ll be great for wine,” Beattie says. “But the ethos of craft beer is hyper local. Local could mean in your neighbourhood, or it could be your province. Do I think we make the best beer in Canada? Yeah, I do, because we win the most awards at the national shows every year. But I don’t think a guy in Saskatchewan is going to be ordering 24 beers from B.C. just because it’s the best beer he’s ever had.”

What this means for a brewery in 2025 is that, to survive, it has to focus on what the community’s needs are. There’s no playbook for what works and what doesn’t either—Beattie says there are some breweries he thought would do well but are actually struggling, and vice versa. The only consistent metric with successful operations these days is that they are filling some kind of community need, whatever that may be.

And that’s exactly what Threefold is planning to do.

“We all knew going into it that tap rooms don’t matter anymore. It’s experiential,” Sheldan says. “We needed to have a fully realized food program, and we needed to have excellent drink offerings, and not just beer. We need to have people come out, then come back and then come back again.”