Investment

Once-tiny Calgary microbrewery quadrupling output with nearly $10M Labatt investment

Published

9 months ago

December 17, 2023

The investment will allow Banded Peak to approximately double its operations and boost its staff by 68 per cent

Banded Peak Brewing Co-founders L-R, Alex Horner, Colin McLean and Matt Berard announced a capital investment in the brewery that will create new jobs, increase production capacity, and expand distribution across Alberta in Calgary on Wednesday, December 13, 2023. Darren Makowichuk/Postmedia Photo by Darren Makowichuk /DARREN MAKOWICHUK/Postmedia

Gone are the days when Banded Peak Brewing Co. can say it’s a fledgling local brewer.

A Calgary brewery started by childhood friends announced a nearly $10-million investment, which will nearly double its square footage and balloon its staff size.

Labatt Breweries of Canada announced Wednesday it had invested $9.6 million in the company — financing that will take the brewery’s footprint from 4,800 square feet to more than 12,000 square feet.

The upgrades will quadruple Banded Peak’s production capacity, taking it from 5,000 hectolitres a year to 20,000.

Labatt and Banded Peak made the announcement Wednesday at the brewery’s facility in the “Barley Belt” — the southeast Calgary industrial area with a high density of taprooms — with Calgary Mayor Jyoti Gondek and Alberta’s Jobs, Economy and Trade Minister Matt Jones in attendance.

‘We’re working with people who know how to sell beer’

Banded Peak was snapped up by Labatt in early 2020, just four years after being co-founded by childhood friends Alex Horner, Matthew Berard and Colin McLean. It produces well-known beers such as Mount Crushmore and Summit Seeker.

Summit Seeker was named the world’s best English Style IPA at this year’s world beer awards.

The brewery has added eight full-time positions and 12 part-time staff, with a focus on front-of-house, logistics and brewery operations. The building expansion also includes a “state-of-the-art lab” and will fund a bulk grain silo to reduce plastic waste in malt shipping.

“There’s a couple ways you can grow your business — a bank loan, private equity or work with a larger brewery and work with a company like Labatt. We’re working with people who know how to sell beer,” said McLean, one of Banded Peak’s founders.

Banded Peak also has an agreement in which its used barley is recycled by distributing it to cattle farmers north of Airdrie, where it’s used as cattle feed.

The new lab will be used for quality assurance testing.

Rising cost of malt, other materials creating strain for Alberta brewers

At the time of Labatt’s 2020 acquisition of Banded Peak, it was the second time in just nine months a local brewery had been bought by a multinational.

But those have been the only two acquisitions of Calgary breweries over the past five years, said Blair Berdusco, executive director of the Alberta Small Brewers Association.

Over the same period, she said, the number of brewery licenses in Alberta has more than doubled.

Support from a major company is a boon for business, Berdusco said, particularly with rising input costs for items such as malt hitting smaller operations.

“Margins are a lot slimmer, so breweries are having to be more creative about what they’re putting out there, how they’re running their breweries and maybe focusing a bit more on the front of house,” she said.

Overall, about 10 per cent of breweries are “looking to close their doors,” Berdusco said.

Rising costs are hitting breweries no matter the size of their operation — but having a company of Labatt’s size helps soften the blow, McLean said. Still, Banded Peak charges a premium for the quality of its beer. “We hope that resonates with people,” he added.

“Ingredient costs and material costs are going up across the board. It’s still a challenging business, regardless of the size of your business.”

Berdusco said Calgary may be reaching its ceiling for the number of breweries it can support, particularly with tourism returning to pre-pandemic numbers. In Edmonton, she’s seen a significant number of small craft breweries open over the past year.

In larger, high-density cities such as Toronto and Vancouver, some small craft breweries have struggled to stay afloat amid industry saturation.

“Edmonton is growing significantly — they’ve had the majority of brewery openings this year,” Berdusco said.

“People are still very much interested in what (breweries) are offering and how they differ from each other.”

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Economy

Energy stocks help lift S&P/TSX composite, U.S. stock markets also up

Published

1 day ago

September 17, 2024

Anne Joseph

TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.

The S&P/TSX composite index was up 34.91 points at 23,736.98.

In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.

The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.

The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.

The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.

This report by The Canadian Press was first published Sept. 17, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX gains almost 100 points, U.S. markets also higher ahead of rate decision

Published

5 days ago

September 13, 2024

Anne Joseph

TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.

“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.

In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.

The S&P/TSX composite index closed up 93.51 points at 23,568.65.

While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.

Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.

But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.

Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.

“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.

“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.

A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.

It would also be “counter to what they’ve signaled,” he said.

More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.

“That’s going to be more important than the size of the cut itself,” he said.

In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.

“Here, the labour situation is worse than what we see in the United States,” he said.

The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.

The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.

The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.

— With files from The Associated Press

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

Published

2 weeks ago

September 6, 2024

Anne Joseph

TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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