Meet the Canadians

The Canadians are some of the most well off wine lovers in the world. But they’re also highly diverse, depending on where they live. Treve Ring gives a snapshot of Canada’s wine economy.

Sales of alcohol by liquor authorities and other retail types, Canada (C$)
Sales of alcohol by liquor authorities and other retail types, Canada (C$)

O Canada. It’s certainly the true north, and while the liquor mechanisms and industries across the country aren’t quite free, they are certainly fiercely strong. And they are singular. Though united under one flag, and one anthem, each of the country’s ten provinces and three territories operates its own liquor industry, insular unto itself. Some of the provinces have government-run liquor monopolies, others are entirely open, and many are a quirky, singular mix of both, the lingering result of early-20th century prohibition and resultant government control mechanisms that result in archaic, if inane laws that continue today. 

Hangovers from Prohibition

One glaring example of the dusty cobwebs from the past is the protectionist barrier against interprovincial wine shipping. It is currently against the law in certain provinces to allow wine imports from other provinces for personal use – and you can entirely forget about wine shipments for resale or retail. Although Canada has made great strides to clear the country’s wine shipping-law mess, it’s been a slow journey to a clean house. 

In June 2012, the federal government amended the Importation of Intoxicating Liquors Act (IILA) through Bill C-311 to create a national personal use exemption for direct-to-consumer wine shipments between the provinces. These changes were passed unanimously by both the House of Commons and Senate, clearing the way for all Canadian consumers to directly order wine from across the country.

Unfortunately, these changes to the federal law also allowed each province to impose their own restrictions on the national exemption. In June 2014, the federal government also amended the law to extend the personal use exemption to include the interprovincial shipment of beer and spirits. British Columbia and Manitoba were early adopters of the change, opening their borders to allow interprovincial shipments, and in June 2015, the Nova Scotia government allowed direct-to-consumer wine shipments. Of course, in all three open provinces, the stipulations only apply to Canadian wine purchased from a winery; retailer shipments and shipments of non-Canadian wine are still not permitted. To date, none of the other provinces permit interprovincial shipments.  

However, in April 2016 a groundbreaking decision was made by a New Brunswick judge that might be the tipping point consumers have been waiting for. The trial court judge found that provincial laws that restrict the interprovincial transport of liquor are unconstitutional, citing s.121 of the Constitution, which guarantees that a free trade zone within Canada does not allow provinces to create laws that prevent Canadians from transporting liquor from another province. Though the NB decision is not binding on other provinces, if it is appealed to the Supreme Court of Canada (which appears likely), then it could become binding across the country.

Macro trends

It’s not surprising that the Canadian consumer varies drastically from coast to coast to coast. From the Pacific Ocean east to the Atlantic Ocean and north to the Arctic Sea, the country spans 9.98m square kilometres, making it the second largest in total area in the world. That said, most of that land is uninhabited by humans; only 35m people live in the country, and nearly all of them in a band running across the southern border with the US. Though inhabitants are few, they are generally prosperous, ranking in the top 20 nominal per capita income globally as ranked by the International Monetary Fund.

Canada’s federal parliamentary democracy anchors its high international rankings in the Human Development Index, Global Peace Index and, tellingly, the World Happiness Report, ranking fifth out of 158 countries in 2015.

Who’s to argue that the country’s booming liquor consumption is fuelling those happy thoughts? In the 12th study of the World Wine and Spirits Market with an Outlook to 2018, conducted by British agency International Wine and Spirit Research (IWSR) and published last year in conjunction with Vinexpo, data showed that Canada became the worldʼs sixth-largest wine importer (32.7m cases) in 2014. It also ranked as the seventh- largest wine market, valued at $6.1bn, which should grow by 10.4% to 2018.

Canada saw moderate growth in sales of still wines in 2013, posting a 1.6% increase – half of the 2012 figure. While Canada does not rank among the 10 biggest consumer countries, the outlook to 2018 hints at a 7.8% increase in wine consumption, to a total of 49.93m 9 L cases. 

Per capita wine consumption was tabled at 13.5 litres per capita in 2014, a rise of 0.6% since 2013. The outlook for the future remains on the up, as consumption is expected to increase by 4.1% to reach 16.4 litres per adult in 2018.

Even though the country has strong local wine industries in British Columbia and Ontario, and a small-but-growing wine industry in Nova Scotia and Quebec, inhabitants are thirsty for more. Since 2008, Canadians have shown a growing taste for New World wines, such as those from New Zealand (+17.7%), the US (+9.7%), and Chile (+4.8%).

While global spirit consumption is set to increase 3% by 2018, Canada is heading the other way. While spirit consumption increased by 2.1% between 2009 and 2013, a decrease of close to 2% is expected by 2018, mainly as it relates to brandy, spirits and vodka. This drop is mainly attributable to the decrease in domestic spirit consumption. Though bourbon and Cognac have also seen a steady growth in Canada since 2009, tequila will experience the strongest progression by 2018 (+16.7%). 

Approximately 80% of Canadians drink alcohol, with the average consumer imbibing 25 drinks per month, on roughly 10 days per month. According to the Centre for Addiction Research of British Columbia, if you take into consideration all alcohol (beer, spirits and coolers included), Canadians over the age 15 consumed 8 litres of alcohol in 2014, the equivalent of 469 standard drinks. That’s dipping down from 25 years ago, when data showed that the average was 8.8 litres per person. 

The Canadian Centre for Addiction and Mental Health (CAMH) recommends women limit themselves to 10 drinks each week (maximum two per day) while men are allowed 15 drinks each week (maximum three per day). One standard drink in Canada is measured at 6 oz (or 170ml) of 12% wine, 12 oz of 5% beer or 1.5 oz of 40% spirits. With those figures in mind, the CAMH suggests that 19% of Canadian drinkers consume above the recommended limits. And most of the time, it is consumed in the home. According to a 2015 article in the National Post newspaper, using data from Ipsos Reid, Canada’s leading polling agency, 58% of drinks are consumed in the drinker’s place of residence, and 16% are consumed in the home of another person. 

Following that, 10% of drinks are in a bar, lounge or club; 6% in a restaurant; and 3% in a hotel or hall. The Ipsos Reid study went on to detail that 80% of drinks are consumed in the presence of someone else: 29% with a spouse and 20% in a large group. Only 19.6% of drinks are taken solo, and two-thirds of all drinking happens between the hours of 17:00 and 20:00. 

Predictably, 60% of alcohol is consumed on the weekend, though data shows that baby boomers are slightly more prone to weekday drinking than younger generations, who appear to save their drinks for social situations, like weekend parties. 

With a nation as vast as Canada, it’s only logical that alcohol consumption varies drastically from coast to coast. Wine Intelligence, a UK-based research company, shows that 87% of Canada’s regular wine drinkers reside in three provinces: Ontario (40%), Quebec (28%) and British Columbia (19%). Toronto, Montreal, Calgary and Ottowa are Canada’s most populous cities, which offer a high-end restaurant and wine culture to match. These internationally influenced cities have a strong sommelier and wine trade presence, with stores and lists to support the overall wine culture. 

What Canadians drink

Outside of the major centres, wine – or at least wine culture – is generally more hit and miss. According to Wine Intelligence’s The Canadian Wine Market Landscape Report 2016, the two main trends are driven by the nation’s two biggest cultural groups – the French-speaking inhabitants of Quebec, and English-speaking Canadians. The long-held Québécois bias towards Old World wines is still in place, with French wines by far the most popular in the province, followed by Italy and Spain. The Québécois are also more likely to drink rosé (more than half partake in pink) compared with just a third of regular wine drinkers among English-speaking Canadians. European favourites such as JP Chenet and Mouton Cadet are more likely to be found on the shelves of a monopoly SAQ store in Quebec than in the equivalent LCBO in Ontario.

Conversely, English-speaking Canadians are more likely to select North American wines, with Californian wines leading the international picks, followed by Italy, Australia and Chile. Interestingly, Wine Intelligence data reports that Canada is one of the few markets in the world where recommendation by friend or family is ranked as being as important a choice cue as brand and varietal, when it comes to choosing a bottle of wine. 

Where the local industry fits

Sales of Canadian wine grew 7.6% in 2014 to 2015, outpacing the 4% growth of imported wine sales. In the main wine-producing provinces, British Columbia and Ontario, wine sales are high, especially for home-grown wines. The 2015 BC Wine Institute Annual Report shows that BC wine (both VQA and non) have a 44% share of the wine market within the province. A study commissioned by the Canadian Vintners Association (CVA) in 2013 showed that the BC wine industry contributes over C$2bn ($1.55bn) to the province’s economy annually, whereas in Ontario the LCBO reports that local wine accounts for 30% of all sales in 2015 to 2016, while the local wine industry has a total economic impact of C$3.3bn. The CVA study highlighted that British Columbians annually enjoy more than 234m glasses of locally produced wine, more more than 39m bottles. In Ontario, locals consume more than 420m glasses of Ontario-produced wine, equal to 84m bottles.

 
Beer on top

Wherever it’s from, wine is big business – and growing. May 2016 data from Statistics Canada shows that, nationally, liquor stores, agencies and other retail outlets sold C$21.3bn worth of alcoholic beverages during the fiscal year ending March 31, 2015, up 3.8% from the previous year. 

Nevertheless, beer remains the alcoholic drink of choice for Canadians, with C$9bn in sales, accounting for 42% of total alcohol sales, up 3.1% from the previous year. Yet while beer is currently king, that monarchy is starting to crack. Beer sales as a proportion of total sale of alcoholic beverages have declined in recent years. In 2005 to 2006, beer had a market share of 47.9% in terms of dollar value, while wine had a market share of 26%. By 2014 to 2015, the market share for beer had fallen to 42%, while wine had increased its share to 31%. To compare, C$6.7bn worth of wine was sold in Canada during the same time frame (up 5.1%), with Alberta (+9.5%) posting the highest growth, followed by the Northwest Territories (+8.4%).  

 

Canada at a glance

Canada is divided into ten provinces and three territories. The world’s second-largest country by land mass, it extends from the Atlantic Ocean to the Pacific, and north to the Arctic. South, its border with the US is the longest in the world. Despite its size, at 35m people, it could be said to be sparsely populated; 80% of its people huddle near the southern border – much of Canada experiences harsh winters, though between the coasts the average summer temperatures are between 25° to 30°C; in some interior locations it can sometimes rise beyond 40°C.

The currency is the Canadian dollar, and the Canadians have the eleventh-largest economy in the world, and the tenth highest nominal income per capita in the world. The fiscal year runs from 1 April to 31 March.

The sale of alcohol in Canada is controlled by state and territory monopolies, aside from the province of Alberta.

The ten provinces are (by population size): Ontario, Quebec, British Columbia, Alberta, Manitoba, Saskatchewan, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island.

Felicity Carter

Canada’s local wine industry

Wineries: Almost 500
Total economic impact: C$6.8bn
Ontario: C$3.3bn
BC C$2.01bn
QC C$805m
NS C$196m
Other C$459m
Jobs: 31,000 annually
Visitors: 3m annually
Source: Canadian Vintners

 

*Notes: 'Produced in Canada' can mean blended with Canadian alcoholic beverages. Imported can also mean imported bulk that's bottled in Canada. 

Sales of alcohol by liquor authorities and other retail types, Canada / Value and volume = Value of sales (dollars)

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