Consumer habits are shifting, competition is intensifying and alcohol sales have softened across Canada. Statistics Canada reported that overall alcohol sales volumes fell by three per cent from 2024 to 2025, while beer volumes declined 3.8 per cent, marking the ninth consecutive annual decline.

Those numbers are creating pressure throughout the industry, but they’re not necessarily pushing every producer toward the same solution. Some businesses are exploring low or non-alcoholic products. Others are refining their core offerings, investing more heavily in customer experience or focusing on the products and channels that perform best for their business.

Visibility is becoming increasingly important across the board. A business that once operated successfully on instinct and day-to-day oversight may now be balancing production, hospitality, inventory, staffing, wholesale distribution, tourism and rising operating costs all at once. This is where stronger financial controls, reporting and operational insight can make a meaningful difference.

Growth can make blind spots harder to see

Many founder-led craft beverage businesses are built by people who know their product exceptionally well. They understand their customers, their brand and the experience they want people to have when they walk through the door.

That hands-on knowledge is often what helped the business grow in the first place. But what started simple and somewhat routine becomes more dynamic. A brewery that once managed a few core products may now juggle seasonal releases, wholesale accounts, events, staffing, inventory and hospitality operations. A winery may be balancing vineyard management, wine production, tourism traffic, retail sales and wine club fulfilment across the seasons. At a certain point, instinct alone can only take you so far.

Consider a brewery that produces several seasonal beers alongside its core lineup. One release may drive strong taproom traffic and attract attention. However, tighter margins tell a different story once labour, packaging, ingredients and production time are fully accounted for. Meanwhile, a less talked-about product with steadier turnover and simpler production requirements may contribute more consistently to the bottom line. Those kinds of blind spots can become harder to catch as your business grows and operations become more complex.

If you are trying to understand where money is being made, where costs are creeping up, or why cash flow feels tighter despite strong sales, it becomes much easier to make decisions when you have a clearer understanding of things, such as:

• Inventory movement
• Product margins
• Cashflow
• Labour costs
• Production costs
• Slower sales periods
• Wholesale versus direct-to-consumer revenue

Having that information on hand can help you identify pressure points earlier, respond more quickly when conditions change and make decisions with greater confidence as the business grows.

Similar industries, very different realities

Breweries, wineries, cideries and distilleries may face similar market pressures, but the operational realities behind those businesses can look very different. If you run a winery, much of the work and costs begin long before a bottle is ready to be sold. Production and sales cycles can span two to three years while balancing farming operations, wine production, tourism, retail sales, hospitality and wholesale distribution. Craft breweries and distilleries often operate on much shorter production cycles, which can create a very different operational and cash-flow dynamic.

Each part of the business comes with different costs, timelines and risks. A difficult growing season can affect inventory for years to come. Labour may shift between the vineyard, cellar, hospitality operations and the retail side of the business throughout the year. Tourism traffic can fluctuate from one season to the next, making cash flow management especially important during slower periods.

Breweries and distilleries often have greater production flexibility, but they face a different set of pressures. Keeping inventory moving, maintaining customer traffic, managing wholesale relationships and balancing production with hospitality operations can become increasingly difficult in a crowded market.

Over time, viewing the business as one large operation can make it harder to spot where money is being made and where margins are starting to slip. You may have one part of the business generating strong returns while another is dragging profitability down. A busy tasting room or taproom doesn’t always mean every product, sales channel or department is contributing equally behind the scenes. On the other hand, wineries can face a different kind of profitability pressure. Inefficient farming practices can drive up grape and wine costs even when the cellar operation itself is running efficiently.

Separating those areas financially can help you better understand where the business is strongest, where costs are starting to creep up, and where adjustments may help protect profitability before pressure starts to affect cash flow more seriously.

Stronger financial controls help businesses react earlier

One of the biggest issues many growing craft beverage businesses face is that the business grows faster than the financial processes supporting it. Sales may look strong. Yet cash flow can still feel tight month after month. A winery may be carrying major costs tied to vineyard operations, inventory, equipment and future vintages long before revenue from those bottles is fully realized. After two strong summers, a brewery may decide to expand its patio, hire more staff or increase production heading into the next season. Sales may still look healthy overall, but rising operating costs, slower winter traffic and delayed wholesale payments can create pressure much sooner than expected.

When reporting slips or financial reviews fall behind, it becomes harder to spot emerging trends before they affect day-to-day operations. This brings us back to the importance of staying close to your reporting by reviewing results consistently and communicating regularly as a management team, so you can adjust when conditions shift unexpectedly.

Accurate monthly reporting, reliable forecasting and historical data also make it easier to anticipate seasonal patterns, inventory pressures, labour costs and slower periods before they become larger issues. Staying disciplined about timely reporting and regularly reviewing current results against forecasts is often what helps businesses spot negative trends early and respond before they become much harder to manage.

Stronger reporting then helps you feel more prepared for financing conversations, expansion planning and future investment decisions. External finance and advisory support can also provide additional perspective and help you create a framework that supports operational growth.

Building a stronger foundation for what comes next

Canada’s craft beverage industry is still maturing, and current market conditions are putting pressure on some producers. However, they’re also prompting businesses to better understand their operations, sharpen decision-making and think more strategically about long-term sustainability. That starts with visibility. Not just into sales, but into margins, inventory, cash flow, production costs, customer behaviour and the overall health of the business.

Fast growth attracts attention, but it’s not what sets you up for the future. What really matters is how well you understand your business, where you create value and how confidently you can adapt when things change.

Beer manufacturing in Canada is both an economic and social engine for large and small communities from coast to coast. As a grain-to-glass or farm-to-table industry, brewing creates jobs at every step of the journey. At a macroeconomic level, brewing contributes to the country’s gross domestic product (GDP) more than five times that of winemaking and distilling combined.

Canada’s relationship with beer began with the first European settlers, including those from France, England, Ireland and Scotland recognizing the land was well suited for beer production. Starting with premium grains and clean freshwater, they adapted their traditional brewing techniques to sow the seeds of today’s Canadian brewing sector. Now, Canadian brewers marry the best of these old-world brewing traditions with new-world innovation to provide a range of beer styles and flavours.

Canadian vs. Foreign Content: Beverage Alcohol Categories in Canada

Beer is as intimately tied to Canada’s culture and heritage as is hockey or maple syrup. Canadians continue to have a deep love for “their beer.” Local brewers act as a community’s social hub, whether at their in-house taproom or at a neighbourhood pub. Sharing a few laughs, stories or discovering the next million-dollar idea over a beer provides a much-appreciated break from people’s busy lives.

Brewing in Canada has provided these benefits for generations of Canadians, but governments in Canada may not be doing all they need to do to ensure these benefits are available for future generations.

Beverage Alcohol Production Contribution to Canada’s GDP

In 2017, the federal government, under then Liberal Finance Minister Bill Morneau, increased federal beer excise duties by two per cent and introduced an annual inflation-indexing formula to raise rates automatically each year from then on. The cumulative effect of these increases has been a federal beer tax rate increase of nearly 14 per cent. These increases were imposed annually, even through the worst of the COVID-19 pandemic when out-of-home beer sales channels were no longer available due to the health-related closures of restaurants, festivals, professional sporting venues and similar venues.

Given that Canada already had among the highest beer taxes in the world and the highest in the G7, the impact of these punishing federal tax hikes was entirely predictable with depressed beer sales volumes and declining net federal revenues on beer sales.

In fall 2019, combined federal excise duty and GST revenues on beer sales reached $9.85 billion, but these decreased to an estimated $9.51 billion in fall 2023. While federal government revenues decreased by 3.4 per cent, beer sales volumes decreased by 9.3 per cent. Chasing ever higher tax rates while the brewing, hospitality and tourism sectors were fighting the economic challenges of a lifetime was short-sighted and misguided.

Estimated Total Beer Taxes as Percentage of Retail Price (G7)

A year ago, a huge coalition representing grain farmers, consumers, businesses, workers, hospitality and tourism sectors and brewers came together and demanded a change in policy direction. The coalition was partially successful in that Budget 2023 replaced the inflation-based scheduled 6.3 per cent beer tax increase with a two per cent increase, but it was a stop gap measure only.

Canada has seen a deteriorating market in recent months as the double punch of higher costs for almost all goods and services and higher interest rates have squeezed most family budgets to the breaking point. Discretionary items like a dinner out or a beer after work are casualties of tightening belts. A hallmark of the parliamentary system and western Liberal government is that the legislature and elected officials vote on tax measures.

This basic and fundamental role of individual members of Parliament was taken from them in 2017 and must be restored. At that time, the Senate of Canada and the chair of the House of Commons standing committee on finance vigorously opposed this weakening of the role of elected officials and of ministerial accountability. Only after a tax measure is tabled in parliament and is subjected to open debate and consultation, then voted on, should new taxes be imposed on Canadians. Morneau short circuited this process and short-changed Canadians.

Raising beer taxes by nearly another five per cent on April 1, 2024, (as is now scheduled) must be put to a vote or be set aside. Members of Parliament, of any political party, would likely oppose a beer tax hike when they take into account the following:

• Beer sales volumes remain well below pre-pandemic levels.
• 53 per cent of Canadian brewers selling less than $5 million annually were unprofitable in 2022.
• Taxes already represent 46 per cent of the price of beer in Canada, the highest rate of G7 countries.
• As of March 2023, over half of Canadian foodservice restaurants reported they were operating at a loss or simply breaking even.
• Beer is a key profit and revenue driver for licensed restaurants and pubs, generating significantly higher margins than available on food.
• The livelihoods of unionized and non-unionized brewery workers are entirely dependent on a healthy beer market.
• Tying commodity tax rates to inflation fuels higher inflation.
• Persistent high inflation puts upward pressure on interest rates.
• Canadian brewers buy 350,000 tonnes of malting barley each year valued at more than $175 million with these purchases being crucial for Canadian farmers.
• Brewing in Canada supports 149,000 jobs across its added-value supply chain and directly employs 21,000 well-paid jobs in breweries.
• Progressive tax policy should prioritize lower alcohol strength products such as beer, the typical alcohol content of which ranges between four and five per cent by volume.
• Canadian brewers need to continually invest in their facilities to remain globally competitive and leaders in environmental performance from facility water and energy use to container and packaging stewardship.

Once again, the coalition is working hard to encourage all members of Parliament to demand a debate and vote prior to any future beer tax increases.