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A Saskatoon brewery is moving its operations to the Queen City to join forces with another provincial brewer.
On Tuesday, Paddock Wood Brewing Co. in Saskatoon — which has produced beer in the province for two decades — announced it would be moving to Regina to partner with District Brewing Company, transferring all production from Paddock’s Saskatoon brewery to District’s facilities.
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According to Paddock Wood’s general manager Doug Yaremko, recent hardships and significant change within the Saskatchewan and Canadian craft beer sector mean more breweries are facing rising production and overhead costs. That, coupled with a quickly evolving market, is hitting the businesses hard, a news release said.
Two companies, one footprint
It’s not a merger, Yaremko is clear: the move is a collaboration.
“It’s two companies operating within one footprint,” he said.
The decision to join forces and work together under one roof comes from the hope of preventing Paddock Wood from closing its doors.
Transitioning production will lead to the brewery reducing costs while maintaining production quality and benefiting from using the advanced technology at District Brewing’s facility.
In an interview with 650 CKOM, Yaremko said he’s excited about the opportunity to use District’s state-of-the-art facilities, which include better filtration processes for their products.
“The outcome from that is an even better quality product than what we’re producing today,” Yaremko said.
It also brings the opportunity for Paddock Wood to pasteurize its products, which improves shelf life for some beer beverages.
Hayden McPherson, marketing coordinator for District Brewing, said the biggest benefit of the partnership is getting to continue seeing Paddock Wood products on the shelf.
“Obviously, the alternative would be closing the doors and saying goodbye to Saskatchewan’s oldest running and most legacy craft brewery,” MacPherson said.
Yaremko said the partnership is a chance to consider the environmental impact and carbon footprint of the two breweries, with sharing distribution.
“They’re on a path to trying to get to carbon neutral and they’ve got the technology in place to take them a long way down that road,” Yaremko said, calling it “super exciting.”
MacPherson echoed the pride District takes in its green initiatives and prioritizing sustainability within their business.
Yarkemko said there was an opportunity to have another tenant move into their existing space and take over the facility to use it for packaging spirit-based products for sale in Saskatchewan. This paired well with the potential for Paddock Wood to partner with District Brewing.
“It’s going to help us both just kind of come together as we work to reduce costs using the same ingredients … (and) we do all of our own sales and distribution ourselves,” McPherson said, highlighting that distribution transportation to send products from both breweries out into various parts of the province can now also be shared.
There’s a mutual hope to see both Paddock Wood’s former facility and the current District Brewing facility used more fully. The transition is already well underway at District Brewing, with the Regina brewer readying to welcome its new partner into their large facility.
Yaremko is assuring customers, however, that the Paddock Wood company and brand is not changing.
McPherson said there have been lots of details in the works to bring Paddock Wood to Regina for production and distribution of all of their beers and products for both Saskatchewan and across Western Canada.
“We remain front and centre … supporting what it is that we’re doing with new ideas, developing new products, having District help us bring them to life,” Yarkemko said, highlighting that all other business aspects of Paddock Wood will continue as normal by their company.
“Paddock Wood still exists. We continue to operate,” he said.
Yaremko said the Paddock Wood slogan, “Drink Local, Support Local,” remains important for supporting the entire Saskatchewan craft alcohol community and Saskatchewan beer producers.
“We look to everybody,” Yarkemko said. “We make good product. We make product that that is, in many instances, world class (and) has been demonstrated by different producers that have won awards internationally.”
Though the company will ceased operations out of its Saskatoon location on Jan. 26, Yaremko said the company will continue as a family-run business selling across Western Canada.
Changing industry forcing breweries to be creative
McPherson, too, cited rising costs and overhead production, as factors making it more difficult for breweries to stay in business.
Yaremko said it’s a challenging time for breweries like his, especially since the COVID-19 pandemic.
“People were at home looking for things to do and weren’t spending money elsewhere,” he said.
Tough economic times since the lockdowns have led to a drop in consumption and spending which, coupled with changing alcohol consumption trends, continues to hurt brewers’ bottom lines.
Dry January, which can linger into February, is particularly making the market tough this month.
“It’s not that people are going to stop consuming beverages of some form. It is just that consumer choice is changing, and we need to be able to follow along with that as the market ever changes,” Yaremko said.
The Paddock Wood general manager said his view is that craft alcohol is all about the experience — enjoying a variety of different flavours that are produced locally and supporting Saskatchewan.
Earlier this month, it was announced that Saskatoon’s 9 Mile Legacy Brewing would take over beer production for Black Bridge Brewery.
Seeing other businesses shutter and drastically change their business models is further proof of the trend that craft breweries are hurting and working to find new ways to survive, McPherson said.
— with files from 650 CKOM’s Roman Hayter
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