Industrial Restructuring and the Future of the Small Firm: The Case of Canadian Microbreweries

The dramatic flourishing of small-scale enterprise in recent years has stimulated a great deal of academic interest. Indeed many researchers have given the small firm pride of place in theories designed to explain the growth of a new, more ‘flexible’, economic environment. Recently, however, commentators have questioned whether these analyses are perhaps not overly optimistic in the role they ascribe to small firms. We add to the debate through a study of small Canadian brewers (microbrewers). Whereas Canada's major brewers have been forced to restructure and rationalise their operations in the face of new competitive pressures, including trade liberalisation and changing consumer demand, microbreweries have found themselves catering to a growing niche market and have expanded rapidly in number. Although much of the microbrewery ‘success story’ appears to support theories of small-firm growth, we argue that a cautionary note must be added for the future. Improved efficiency and flexibility is making it easier for large brewers to break into the high-profit-margin niche markets that were once the preserve of their smaller counterparts. As a result, the next decade may not witness the same levels of small-firm growth that characterised this sector in the 1980s.