The Effects of Policy and Clustering in Alberta’s Expanding Microbrewery Industry

• Author / Creator

  Budynski, Stephanie Brianne

• Historically, macrobreweries, such as Keith, Molson, Sleeman, and Labatt, have dominated Canada’s brewery industry. However, in the late 1980s microbreweries began to emerge in communities across Canada. In Alberta, the number of microbreweries increased from 16 in 2012 to 80 in 2018 (Alberta Gaming and Liquor Commission, 2018). This growing trend of small, locally owned breweries is part of a larger local food movement that aims to reconnect and reduce the distance between production and consumption, in contrast with the globalized, industrialized food system. A number of provincial level policies have been introduced in order to support and encourage the microbrewery industry in the Province of Alberta. This includes the introduction of a graduated tax rate: products from microbreweries in Western Canada were taxed at different rates depending upon the brewery’s production volume. The graduated tax rate was replaced with a flat tax, and thereafter by the Province’s Alberta Small Brewers Development program. The most recent policy change in late 2018 has been a reversion to a graduated tax rate by volume of sales, but for breweries from all Canadian provinces. This thesis examines if policy changes are an effective means of stimulating growth within the microbrewery industry. The overall goal of this thesis is to identify factors that may have impacted the development of Alberta’s microbrewery industry. The specific objectives are: i) determine if the microbrewing industry in Alberta has exhibited geographic clustering, ii) determine if government policy has impacted the development of Alberta’s microbrewery industry, and iii) determine what other factors have contributed to the success of the microbrewing industry in Alberta, specifically focusing on the City of Calgary and the City of Edmonton. To carry out this research I utilized a combination of qualitative and quantitative methods. Semi-structured interviews, which included Likert scale and open-ended questions, were used to determine if particular factors have impacted the success of local breweries. Particular attention was given to regions that exhibit a clustering of microbreweries. Spatial-analysis methods were used to determine if and where geographic clustering of microbreweries occurred in Alberta. Porter’s (1990; 1998; 2000) Diamond of National Advantage model, Kamath et al.’s (2012) Global Economic Management System (GEMS) model, and the Evolutionary Economic Geography serve as the theoretical background for the clustering analysis. The quantitative analysis presented in this thesis determined that the following variables were correlated with the change in the number of microbreweries within a Census Subdivision between 2011 and 2016. The number of microbreweries in a Census Subdivision in 2011 was shown to have a negative effect on the change in number of microbreweries within a Census Subdivision between 2011 and 2016. This latter result suggests that the benefits from clustering were outweighed by the costs of local market saturation. The results of the qualitative analysis from the City of Calgary and the City of Edmonton suggest that there has been clustering within Census Subdivisions that have attracted multiple new breweries. The qualitative analysis also shows that microbreweries within the Province of Alberta have benefitted from provincial-level policies and programs. The removal of a minimum brewing requirement and the introduction of Alberta Small Brewers Development program have positively impacted the microbrewery industry across the Province of Alberta. In particular, the City of Calgary experienced substantial growth within their microbrewery industry while the City of Edmonton experienced slower growth. Using Porter’s Diamond model and Kamath et al.’s GEMS model, this thesis finds that key factors between the two cities have differed and this likely contributed towards different patterns in the growth of microbreweries.

• Subjects / Keywords

  • Microbrewery
  • Policy
  • Craft Brewery
  • Cluster

• Graduation date

  Spring 2019

• Type of Item

  Thesis

• Degree

  Master of Science

• DOI

  https://doi.org/10.7939/r3-az27-9b05

• License

  Permission is hereby granted to the University of Alberta Libraries to reproduce single copies of this thesis and to lend or sell such copies for private, scholarly or scientific research purposes only. Where the thesis is converted to, or otherwise made available in digital form, the University of Alberta will advise potential users of the thesis of these terms. The author reserves all other publication and other rights in association with the copyright in the thesis and, except as herein before provided, neither the thesis nor any substantial portion thereof may be printed or otherwise reproduced in any material form whatsoever without the author's prior written permission.