CSNC EXCLUSIVE: Q&A with Steam Whistle Brewing president Bromlyn Bethune
Steam Whistle Brewing president Bromlyn Bethune has been waiting a long time for Ontario to catch up with other provinces in Canada and allow sales of beverage alcohol in c-stores. "Every day right now is exciting in the industry—it’s a history-making moment,” says Bethune, who started her career at the LCBO in 2001 and has been president of Toronto-based Steam Whistle since May 2023, where she has also been director of marketing and sales, as well as the chief growth officer over her 12 years with the brewery.
Bethune, who previously represented small brewers with a board director seat at The Beer Store, shares with CSNC how Steam Whistle is collaborating with c-stores to help set them up for success.
Steam Whistle Brewing has been proactive in engaging the c-sector; Can you talk about getting out to the sector quickly? We were proactive for two reasons. One, we're the largest craft brewer in Ontario and have much at stake as the Ontario retail system shifts, with The Beer Store seeing select store closures over the next two years. They have been a large retail channel for us over the years and with consumer habits forever changed with COVID, we simply needed to be proactive to protect our business base and consumer accessibility. Second, retail has become a very important channel for brewers with COVID, which forever changed dining out, and now given inflation and the recession, keg sales in the hospitality sector, although recovering, are still down on average 20-25% from pre-pandemic levels. More and more people have found new ways to consume their beers and continue to host people in their homes, backyards, cottages and at campsites as opposed to going out to eat and drink in their local restaurant.
Did you initially worry the big brewers might dominate the c-store channel? In May and June, when everything was being announced, we were all thinking in the craft industry, “Oh no, we’re done, the big beer conglomerates will take over!” But Ontario mandated 20% shelf support for craft brewers and small producers in the products that are displayed and sold in newly licenced stores, an opportunity unheard of in the rest of the world. Excitingly, we also see a number of retailers who want to exceed the 20% minimum. This reflects the fact that The Beer Store and LCBO have supported VQA wineries, Ontario distilleries and craft brewers for years—this has really helped encourage the Ontario consumer to support local.
How many c-stores placed an order with Steam Whistle? There are about 4,200 c-stores with licences today and growing. We’ve really only seen 1,500 of them order beer so far, but we're still getting orders daily including from stores that we didn’t even know were getting into the category. That said, this is really a two-to-three-year plan for the province. There could be 8,500 convenience operators in the province and we’re going to see a lot more of them come into the market—and then the entry of big box retailers this November. Alcohol is going to bring more traffic into these stores. We worked with a partner in the U.S., New Belgium Brewing as their representative for Canada in recent years, and they see chips and salty snacks growing by 30% in the convenience channel after beer was added in the U.S. c-sector. The beverage alcohol category is a real basket driver for retailers.
What are you educating c-stores about the category right now? Ontario has some 450 craft brewers, and all of us with dozens of products. It’s highly competitive—in addition to us, there is Flying Monkeys Craft Brewery, Muskoka Brewery, Collective Arts, Cowbell Brewing, among so many others. We all have an opportunity to knock on doors and showcase our products to c-store owners and educate them on the craft category. A big thing we’re educating on is date codes on product, which are there because many of us do not use additives, or preservatives and most don’t pasteurize. And so, we don’t want stores ordering six months of beer that sits in the back but rather educate them on weekly ordering, like they would milk so that customers enjoy the freshest beer possible. And you know, we’ve had calls from convenience operators asking us what other craft beer brands they should carry, and we have no problem telling them who to bring in regionally to offer the best of craft in Ontario.
Are you sharing with c-stores the sales numbers from LCBO or Beer Store locations in helping them make inventory decisions? The LCBO has hired account managers for each convenience store, and they're allowed to share sales and volume data, and even slice and dice brands by geography. We’re very open and transparent ourselves. We acquired Beau’s Brewing Co. in 2022, a prominent Eastern Ontario brewery, and because it was about half the size of Steam Whistle at the time, we have had some accounts go, “Does Beau’s sell in southwestern Ontario? How about northern Ontario?” We show them all our data [and say] “This could be one of your core craft brands based on the sales in your city.” The questions on sales have been endless from retailers, as they educate themselves on the category.
How do you see the overall pie of the craft beer market being sliced up by retail channel? We don't see convenience generating huge additional growth by volume. For us, it's a shifting of market share between retailers. You're going to have people that shopped at their local LCBO or The Beer Store now deciding to go to their local convenience or grocery store. The Beer Store needs to close 87 stores in the next 12 months [per provincial stipulations], and as those locations close, convenience stores, the LCBO and local grocers are going to pick up that market share and volume.
What are some other learning curves for c-stores? A convenience operator is used to cash-and-carry and direct to store delivery (DSD) but that doesn't happen with beverage alcohol. But what’s good is that sales opened to the sector after summer, which is peak sales season for our industry and when a single LCBO or The Beer Store can sell 25 cases of Steam Whistle in a given summer weekend. Stores will have to navigate sales spikes at Thanksgiving, Christmas and New Year’s, but they’ll have most of fall and winter, which is shoulder season, to figure out all the other things like their ordering process and merchandising or assortment mix.
What do you foresee in terms of marketing opportunities? The fact that you can earn loyalty points on beverage alcohol purchases is huge. Expect to see cool loyalty activations soon from the corporate c-store chains. But I think that will be one of the next discussions with convenience operators. We’re hoping to work on marketing plans and activations in winter for next spring and summer. Afterall, with more accessibility and now more retailers competing against each other, the brewing industry will need to get creative to drive sales and volumes across each retail channel in the province.
