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A brew for urban revitalization

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Most people don't think of breweries as tools for economic development. In fact, the default assumption among politicians seems to be that alcohol is an unavoidable evil. However, the growth of the craft brewing industry has been a major boon to urban revitalization efforts. Numerous examples from the midwestern United States demonstrate why we should embrace, rather than hinder, the microbrewing revolution.

Unless you live in Montreal, Vancouver, Halifax, or Toronto, you probably don't have a craft brewery in your neighbourhood. Those cities have experienced a boom in craft brewing over the last several years, though nothing quite like what has happened in the United States. When President Jimmy Carter deregulated home brewing, he likely had no idea that it would grow from a fringe hobby into a major industry. There were only a handful of brewing companies at the time, basically producing identical adjunct lagers (beer made with fillers such as corn syrup and rice). Now there are more than 2,700 breweries in the United States. Despite the fact that overall beer consumption is losing ground to wine and spirits, craft beer sales increased by 20 per cent in 2013 and 17 per cent in 2012, and now comprises 14.3 per cent of beer sales by dollar amount. The 2013 retail value of craft beer sales in the United States reached $14.3 billion in 2013, and the industry employs more than 110,000 people.

The local impact of craft breweries can be immense. Particularly those with full service brew pubs. Minneapolis provides many good examples. Surly Brewing in nearby Brooklyn Park was unhappy with the restrictive regulations, and spent years lobbying for fair treatment. The ensuing "Surly Law" allowed microbreweries to sell their products directly from the brewery. Unsurprisingly, many new breweries have sprung up. While Surly is tucked away in an old industrial lot on the outskirts of a suburb, newcomer Indeed Brewing has sprung up in an old industrial building in the Nordeast neighbourhood of Minneapolis. A quick look around suggests that it would have been a very undesirable place to wander at night. Now the brewery attracts people from all over the city and country to its tap room. Locals flock into the brew pub with their bikes, putting more "eyes on the street" in the neighbourhood at night. Proximate condos are springing up in old industrial buildings, and one can't help but think that Indeed has played a notable part in making the neighbourhood feel safer and more desirable.

Boulevard Brewing in Kansas City, Mo. provides another example. The brewery was started in a building owned by a carpenter who happened to discover different styles of beer when travelling through Paris. Since there was no real beer variety in America during the '80s, he decided to learn how to make it himself. He got so good at it that friends encouraged him to start selling it. Banks thought he was crazy, so he remortgaged his house to scratch together funds to buy brewing equipment. The small shop has been expanded into a brewery that was sold for $100 million in 2013 and employs 125 people in what would otherwise be a relatively sketchy neighbourhood.

Unfortunately, most Canadian municipal and provincial governments have been slow to accommodate microbreweries. Manitoba only recently legalized brew pubs, though no brewery has yet cobbled together the money to build one, though rumour has it one is in the works. While Ontario has many microbreweries, the outdated liquor distribution system makes it tough for them to get beer to consumers. The Beer Store, owned by Labatt, Molson Coors, and Sleeman, has little incentive to sell their competitors' products. Most provinces, with the exception of Alberta, have monopoly distribution systems that hurt craft breweries. Un-coincidentally, Alberta happens to have several stores that rival American beer selections, which isn't the case in the rest of the country. Additionally, antiquated laws against transporting and regulations on selling beer from province to province make it very difficult for craft breweries to expand outside of their provinces. In a country as sparse as Canada, this shrinks the potential market for craft brewers to what can be a prohibitively small market.

While there are no silver bullets for urban redevelopment, cities in need of revitalization should do all they can to embrace craft brewers. Sometimes the best solutions for cities come at no cost to taxpayers. Those initiatives are the low hanging fruit that we should pick.

Steve Lafleur is a policy analyst with the Frontier Centre for Public Policy.

Republished from the Winnipeg Free Press print edition May 14, 2014 A11

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