Sip & Share Presenting key findings from Cowichan’s Wine, Craft Brewery, Cider and Distillery Report Economic Development Cowichan |Blue Grouse Estate Winery | January 24, 2019

Today’s Schedule: Presentation of EDC Report Presented by: Janae Enns, Economic Development Cowichan Overview of UVIC Wine Research Delivered by: Dr. John Volpe, University of Victoria Recent Activities and Next Steps Sub-appellation Status Update Delivered by: Bailey Williamson, Blue Grouse Winery

Cowichan’s Wine, Craft Brewery, Cider and Distillery Report Presentation Overview: Purpose of the report Study methodology Overview of sectors Challenges/Opportunities of each sectors Follow-up activities

Purpose of Report Aligned with Goal 2 of EDC’s Strategic Plan 2018-2022: Sector Development Three-fold objective: Opportunity to connect with local beverage providers Explore the opportunities and challenges associated with the sectors Identify strategic partnerships for moving forward

“The beverage sector has strong ties with the future of agriculture and tourism and is playing an increasingly important role in positioning our region as a desirable place to live, work, visit and invest in” (Cowichan’s Wine, Craft Brewery, Cider and Distillery Industries, 2018)

Methodology Phase 1 Phase 2 Phase 3 Research was conducted between April-August 2018 Phase 1 Created a database of all the beverage providers in the region Phase 2 Conducted in-person interviews (21 in total) Phase 3 Analysis of data collected through interviews

Cowichan’s Wine Industry

Cowichan’s Wine Industry Overview BC’s wine industry contributes $2.8 billion annually to the provincial economy $512 million in associated wages $245 million in wine-related tourism 2nd largest wine region in BC Oldest vineyards date back to 1860’s Evolved into a vibrant wine industry, 14 active wineries

Individual Business Challenges

Industry Challenges

Opportunities for Collaboration

Cowichan’s Craft Beer Industry

Cowichan’s Craft Beer Industry Overview To be considered a BC Craft Beer: Must produce less than 160,000HL Must be 100% B.C owned Must be 100% independently owned Craft sales reached $206 million in BC, 2016 18% of all beer sales in BC 144 craft breweries in BC, over 100 opened up in last five years 3 craft breweries currently located in Cowichan

Individual Business Challenges Access to skilled workers Lack of housing options Access to public transportation

Industry Challenges Contract Brewing Competitive Pricing Environment Company contracts a larger brewery to produce, market and distribute beer on their behalf. Results in price discrepancies undercutting independent operations. Competitive Pricing Environment Companies are lowering prices and offering aggressive deals creating pricing norms that are difficult to make a profit.

Policy Challenges BC LDB licensing and regulatory requirements Lack of coordination between levels of government Increases complexity around meeting requirements Occupant load and building restrictions Too stringent and not reflective of safety concerns Gaining access to government liquor stores Distribution model is designed for larger operations “Earning a distribution listing has become akin to a lottery win for new brewers” (Shore, 2017)

Joint Marketing Initiatives Opportunities for Collaboration Sharing Equipment Research Joint Marketing Initiatives

Cowichan’s Craft Cider Industry

Cowichan’s Craft Cider Industry Overview BC’s craft cider industry has roots in Cowichan Merridale Cidery was BC’s first estate cidery and certified craft distillery No craft designation for cideries BC liquor legislation adopts a two-tier approach for licenses: land-based or commercial BC Farm Crafted Cider Association recently formed Two cideries in Cowichan with a third in development

Interprovincial Trade Barriers Storage, Production and Equipment Costs Challenges Interprovincial Trade Barriers Entering The Market Storage, Production and Equipment Costs Access to Employees No Craft Designation Market Saturation

Opportunities for Collaboration Accessible Digitized Soil Maps Festivals and Events Shared labelling and bottling storage facility Destination Map

Cowichan’s Craft Distillery Industry

Cowichan’s Craft Distilleries Overview Two streams of distilleries in BC: commercial and craft Craft Designation: Produce no more than 50,000L a year Use 100% BC agricultural products Fermentation must be completed onsite at the distillery BC craft designation is most restrictive in North America Produce beyond 50,000L, required to mark up products by 160% when sold off-site 3 craft distilleries operating in Cowichan Remove some text on this page when have rehearsed more.

Challenges Interprovincial Trade Barriers Island Location (Isolation) Marketing and Packaging Securing Booths at Venues (Farmers Markets) Access to Employees 50,000L annual Limit Island Location (Isolation)

Work with Local First Nations Opportunities for Collaboration Branding Work with Local First Nations Events/Workshops

Summary of Recommendations All Sectors Support promotional efforts around each of the sectors Support marketing efforts “Cowichan Made” displays Unified messaging – identify a strategy for collaboration Work with local restaurants to introduce programs to support locally made beverages Cohost entrepreneurial workshops Explore the potential for housing structures to be developed on ALR land

Thank you! Janae Enns, Special Projects Assistant Economic Development Cowichan Janae.Enns@cvrd.bc.ca 250-746-7880 ext 246