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Beerworkers Archive


Post date: 07/07/2011 - 14:36

This Could be One of The Reasons for our Problems

Canadians are moving from grain to grape, with a new report confirming the wine industry here is outpacing growth in the overall drinks sector.

The output of the country's wineries has grown at an average annual rate of 7.6% since 1998, outstripping the overall beverage sector which grew at 1%,according to a report from BMO Capital Markets

Canadians are moving from grain to grape, with a new report confirming the wine industry here is outpacing growth in the overall drinks sector.

The output of the country's wineries has grown at an average annual rate of 7.6% since 1998, outstripping the overall beverage sector which grew at 1%,according to a report from BMO Capital Markets

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Beer remains the alcoholic beverage of choice among Canadians, with an estimated 10 million beer drinkers, but its dominance is declining as consumers drink more wine, according to Agriculture and Agri-Food Canada.

"After a period of sluggish growth through much of the 1990s, wine industry activity quickened substantially," said Kenrick Jordan, senior economist, BMO Capital Markets. "The acceleration reflects a shift from native grape species to wine-quality grapes; the creation of the Vintners Quality

Alliance (VQA) standard to enhance quality; expanded efforts to promote Canadian wine; and industry consolidation in the 1990s."

However, domestic vineyards are facing a number of challenges and are going to have to fight to retain their share of the Canadian market, the BMO report said.

The industry is heavily reliant on the domestic market, with exports dropping from 15% in 2001 to 4% in 2010. At the same time, Canadian wineries' share of the local market has slipped to about one-third in 2010 as vineyards battled competition from imports made cheaper by the strong loonie.

"The appreciation in value of the loonie has helped foster import growth from 'New World' producers such as Australia and Argentina, as well as from more traditional sources," said Jordan, who added the share of France - the biggest foreign supplier to Canada - has slipped.

The report said that Canada's wine industry needs to focus on gaining market share at home and abroad by raising consumer awareness about the quality of its products.

It said exports are likely to continue to play a limited role, though the industry should seek to target countries where income is growing fast and wine consumption is currently low.