ICYMI April: Ontario Alcohol Industry Trends

Spring is officially knocking, and so are the headlines. Whether you run a winery in Niagara, a cocktail bar in Toronto, or a microbrewery with a knack for spritzers, March 2025 handed you a plate of news, trends, and straight-up curveballs. Some of it will shift how you stock your shelves. Some will shape how you market your menus. And all of it? Wildly relevant.

Let’s break down what you might’ve missed and what it means for your business.

U.S. Alcohol Gets Booted Off LCBO Shelves

What happened: In response to U.S.-imposed tariffs, Ontario and Quebec have pulled U.S. wines, beers, and spirits from their liquor stores and wholesale channels as of March 4. That’s thousands of SKUs, gone overnight.

What it means: If you’ve built your bar program around California Cab or Kentucky bourbon, it’s scramble mode. But for Canadian producers? Opportunity knocks.

What to do now:

  • Sub in Ontario VQA wines: Swap that Sonoma Chardonnay for a Canadian alternative. Most importantly, tell the story behind it! Why? Because stories sell. They build emotional connection, deepen loyalty, and give the customer a reason to remember, and repeat, the experience.
  • Replace U.S. bourbon with local rye or global picks: Guests will respect the pivot if the product is solid and the narrative is authentic. Guests will respect the pivot if the product is solid and the narrative is authentic. 73% of consumers say product quality is their top driver of brand loyalty, while 64% are more likely to purchase when a brand shares transparent, meaningful stories. When the wine delivers both substance and story, it turns a swap into a discovery, not a downgrade.
  • Promote the local angle: Social media, menus, and server scripts should emphasize local sourcing. 78% of Canadian consumers say buying local is important to them, and 59% feel it’s a way to support the national economy. With a growing sense of patriotism and pride in homegrown quality, highlighting local wines can drive both emotional connection and sales.
  • As a consumer what can you do? Simple. Support the shift with your glass and your wallet. Ask for Canadian wine, beer, and spirits when you dine out, and look for local producers when you shop the shelves. You don’t have to sacrifice quality to stand behind Canadian craftsmanship. In fact, this is your chance to discover exceptional homegrown bottles that deserve the spotlight. When you choose local, you’re not just buying a drink you’re backing farmers, vintners, and distillers in your own backyard.

What’s Trending?

The trend across all age groups is clear: people are drinking less, but better.

This “quality over quantity” approach means consumers are willing to pay more for products that deliver on craftsmanship, local sourcing, and storytelling. Premium wine is gaining market share as consumers look for a more intentional, curated experience. Especially when dining out or buying direct.

What to do now

Lean into premium packaging, storytelling, and wine education, whether in tasting rooms, online, or on menus. Promote limited releases, showcase techniques, and talk about vintage conditions to justify higher price points.

Top-Performing Categories:

Sparkling Wine – Demand for Canadian sparkling (particularly traditional method) continues to climb. It’s perceived as celebratory but increasingly seen as versatile enough for everyday drinking. In Canada, nearly 30% of consumers report buying sparkling wine at least once a year, with 10% purchasing monthly, and 2.5% weekly, signaling a steady rise in habitual enjoyment. As the social culture around drinking sparkling wine expands, so does its consumption, thereby boosting market demand. Restaurants are leaning into it, and consumers are catching on.

RTDs & Flavoured Beverages – The RTD category is booming, with consumption more than doubling in the past two years and projected to reach $419.2 billion globally by 2033. This rapid growth is fueled by Gen Z and Millennials, who prioritize convenience, portability, and flavour-forward options. As urban lifestyles evolve, so do drinking habits and consumers are reaching for on-the-go, functional beverages that deliver not just taste, but added benefits like vitamins, antioxidants, and probiotics.

Low/No-Alcohol Options – Likewise the health-conscious buying is growing fast. Looking ahead to 2025, the Canadian non-alcoholic drinks market is projected to reach $23.34 billion in revenue, with $12.10 billion generated through at-home purchases and $11.25 billion from restaurants and bars. Canadians are expected to consume over 5 billion litres of non-alcoholic drinks next year, with an average of 108 litres per person at home.

Mass-Produced Beer & Entry-Level Wine – These once-dominant categories are in steady decline, consistently losing ground to craft beer, artisanal spirits, and premium domestic wines. The shift reflects a broader consumer trend toward quality, individuality, and experience-driven drinking.

Domestic beer continues to lose traction, largely due to the rise of craft beer and RTDs. While traditional brands slip, premium and super-premium beer segments are growing, with super-premium beer alone seeing a 4% volume increase in key U.S. markets in 2024.

While traditional beer brands are seeing only modest gains with a projected CAGR of just 0.37% from 2024–2028, the Canadian craft beer market is booming, growing to 1.78 million hectolitres in 2023 and projected to hit 2.42 million hectolitres by 2032 at a CAGR of 2.80%. This growth is driven by a demand for locally made, artisanal products with character, unique styles, creative ingredients, and independent roots.

More than 90% of breweries in Canada are small-scale operations, producing less than 15,000 hectolitres per year. That means most craft breweries are focused on quality, flavour, and authenticity, not volume, and that’s exactly what modern consumers are reaching for.

Craft beer is a cultural and economic force. Craft beer tourism now contributes $1.475 billion to the Canadian economy and supports up to 8,800 jobs, proving that people aren’t just buying these beers—they’re building trips and communities around them.

This preference for premium, local, and story-driven products is mirrored in the wine space, too. Entry-level wine is losing traction as more consumers, especially younger ones, look to domestic, small-lot wines that feel personal and meaningful.

What to do now

If your restaurant program still leans heavily on big-brand beer or budget wine, you’re missing the mark. Today’s drinker is curious, informed, and looking for a connection. Whether on the shelf or the list, offering craft, Canadian, and quality-first options is the new baseline.

Generational Drinking Patterns:

  • Gen Z (born 1997–2012):
    Values flavour, portability, and moderation. Big fans of hard seltzers, canned cocktails, and alcohol alternatives. They’re digital natives so expect them to discover products through TikTok, influencers, and strong visual branding.
  • Millennials (born 1981–1996):
    Leading the premium wine and spirits movement. This group is loyal to brands that feel authentic and offer transparency, sustainability, and local roots. They read labels, follow winemakers online, and want a narrative to pair with their pour.
  • Gen X & Boomers:
    Still strong buyers of traditional wine and spirits, but increasingly branching into higher-end or nostalgic products (like sherry, port, or old-school digestifs). They prioritize quality and consistency, often making purchase decisions based on trusted recommendations or personal experiences.

What to do now

Tailor your messaging to your target audience. For Gen Z, that means vibrant visuals and playful descriptions. For Millennials, emphasize storytelling, sustainability, and scarcity. For Boomers, build trust through accolades, expert quotes, and food pairing notes.

How Are They Purchasing?

E-commerce is booming. Online alcohol sales have surged post-pandemic, and platforms like DoorDash, Instacart, and winery DTC stores are still going strong. The online share of the alcoholic beverages market in Canada is projected to increase from 2.1% to 7.8% by 2029, reflecting a significant shift towards e-commerce.

Mobile-first decisions. Canadians are glued to their phones, even while standing in front of a shelf. 9 in 10 consumers read at least one review before making a purchase, and 63.6% use Google reviews specifically before visiting a business in person. 

And it’s not just about convenience. One-third of Canadians say online reviews strongly influence their decisions, and for Millennials and Gen Z, these reviews hold as much weight as personal recommendations. A brand’s digital presence, especially with strong social proof like testimonials and user-generated content, is now a make-or-break factor in the path to purchase.

Hybrid habits. Despite the digital surge, in-person shopping is alive and well, especially for wine and spirits. Consumers still enjoy the tactile, guided experience of boutique stores and LCBOs, where curated selections and knowledgeable staff help them explore new products.

However, they also expect the convenience and transparency of e-commerce to be built into the in-store journey. That means clear signage, QR codes, online review integration, and product pages that give them everything they need to decide confidently, without friction.

What to do now: 

  • If your wine, beer, or spirits brand isn’t visible, well-reviewed, and mobile-friendly online, you’re missing your best chance to win the sale—even when the customer is right in front of your product.
  • Retailers and producers need to think omnichannel. Pair physical presence with seamless online support—transparent pricing, robust product info, and easy-to-navigate websites. When both touchpoints work together, conversions soar.

DTC Is (Finally) Getting Real

After literal decades of debate, March brought a long-awaited announcement: Canada’s federal government and nine provinces have officially committed to advancing direct-to-consumer (DTC) alcohol sales across provincial borders. For Canadian producers, that’s meaningful progress. For consumers, it could eventually mean unprecedented access to homegrown wines, spirits, and beer from coast to coast.

But before we celebrate, it’s worth noting: this isn’t a done deal. The March 5th First Ministers’ Statement is a commitment in principle, not an implementation. It signals intention. Not execution.

While the First Ministers’ Statement signals long-awaited progress, it’s a commitment—not a rollout. And if you’ve followed this issue for any length of time, you know we’ve heard promises before without meaningful change.

The key issues? Tax and markup expectations. Provinces are historically protective of liquor revenue, but evidence from BC and Manitoba, where some DTC sales are already allowed, shows no major loss in tax income. Still, unless markup systems are simple and affordable, producers may be priced out, and consumers won’t bite.

We also need clarity on consumer choice. Will buyers be allowed to purchase from both producers and retailers in other provinces? Or will this be limited to wine shipped directly from a winery, as in BC and Nova Scotia? If the goal is to build a true domestic market, we need full access, not partial measures.

In short, this is a big moment. But it’s not yet a revolution. The industry should remain encouraged, but cautious, until the full framework is in place.

What to do now:

As a consumer what can you do? Use your voice. If you want better access to Canadian wine, spirits, and beer from across the country, support the producers you love and ask for DTC options wherever you shop. Follow your favourite wineries and distilleries online, sign up for their newsletters, and stay informed about what they’re allowed to ship and where.

More importantly, contact your provincial representatives and tell them you support a national DTC system that’s fair, affordable, and actually works. Consumer demand has power and governments are more likely to act when they know people are watching

Finally, keep choosing local. The more we champion Canadian producers, the stronger the case becomes for a streamlined, coast-to-coast DTC system that benefits everyone.

GUEST BEHAVIOUR: Value, Vibes, and Mindful Drinking

Dining and drinking habits in Canada are evolving, shaped by a mix of economic pressure, changing priorities, and growing wellness trends. According to recent data from Square and OpenTable, Canadian consumers in 2025 are spending more intentionally, not necessarily less.

Value: Canadians Prioritizing Cost, Not Cutting Back

71% of Canadians are prioritizing cost more than last year, but that doesn’t mean they’re buying less, it means they’re buying differently. Instead of weekly dinners out, diners are saving up for special moments, with 62% now reserving restaurant visits for “special occasions.”

Despite the rise of takeout and digital convenience, in-person dining is still deeply valued, especially in boutique and experiential venues. 84% of Canadians prefer traditional service and physical menus over tech-based systems, reinforcing the importance of human connection and hospitality.

At the same time, hybrid habits are firmly in place. While guests may dine out less frequently, 30% of Canadians are ordering takeout weekly or more, suggesting a desire to maintain culinary indulgence without the full dine-in commitment.

And they’re doing their research. Consumers increasingly expect seamless digital tools for:

  • Online reservations
  • Menu browsing
  • Reading and trusting reviews, especially via mobile, with 63.6% relying on Google reviews before visiting a restaurant in person

What to do now

  • Leveraging loyalty programs, which have surged in popularity with restaurant loyalty membership rising from 29% to 42% year-over-year.
  • Offer shareable dishes or “choose your own prix-fixe” menus to hit that sweet spot between value and experience.
  • Focus on experience-first marketing: Sell the night out, not just the plate. Guests want to feel something when they dine.
  • A polished online presence is now a prerequisite, especially for younger diners who are mobile-first and review-reliant.

SPRING MENU ALERT: What’s new? Menu & Flavor Innovations for 2025

  • “Swalty” – Sweet + salty is the new it-pairing. Trending now is soy-sauce caramel, miso brownies, or salted honey on soft cheeses.
  • Spicy Global Condiments – Small plates and bar snacks are getting heat from global influences: Salsa macha from Mexico and ajvar from the Balkans are replacing aiolis and dips, adding complexity and storytelling to the plate.
  • Plant-Based, Reimagined – Forget fake meat. Guests want whole vegetable dishes that celebrate what plants actually taste like; mushroom steaks, charred leeks, and smoked beet tartare are outpacing processed alt-proteins. Superfoods like mushrooms are experiencing double-digit growth, with sales that reached $1.6 billion in 2024 and continuing to rise into 2025 due to consumer demand for minimally processed, whole-food ingredients
  • Creative Croissants -“Flat croissants” and hybrid pastries are dominating brunch menus and Instagram feeds. Whether topped with seasonal veg or used as a flaky base for eggs Benedict, the viral croissant reinvention offers high-impact visuals and low-prep indulgence.
  • Fusion Comforts – Global mashups like Thai crying tiger sauce on local steak or tajín-dusted Ontario peaches, bring bold flavor to familiar formats. 
  • Reimagined Comfort Food – Old favourites are getting modern makeovers like cauliflower mac and cheese, and plant-based fried chicken. These nostalgic-but-healthy offerings hit the sweet spot between indulgence and wellness.
  • Sustainable Seafood & Food Waste Solutions – Lionfish, invasive species, and underutilized cuts are being spotlighted on menus to promote sustainability and tell a story. Nearly half of North American seafood consumers are willing to buy more sustainable seafood to protect fish populations. Additionally, 91% of consumers express concern about the state of the world’s oceans, driving efforts toward sustainable practices.

TOURISM & STAYCATIONS: The Staycation Surge Is Real

A Real Boom: What the Numbers Say

  • Bookings in Prince Edward County are up 30–40% for Summer 2025 compared to last year, reflecting a widespread shift toward local getaways.
  • Domestic Airbnb searches are up 20% year-over-year, with Ontario hotspots like Blue Mountain and Elora trending for weekend escapes.
  • Short-term rental daily rates have climbed 22.6%, while occupancy remains strong, signaling both demand and willingness to spend on local luxury.


Why the Shift? Economic and Strategic Drivers

  • A weaker Canadian dollar is keeping Canadians closer to home and attracting more U.S. visitors, especially to Niagara’s wine region, where the exchange rate adds extra value.
  • Rising U.S. tariffs and travel tensions are nudging Canadian travelers to stay domestic, with many opting for “luxury local” instead of heading abroad.

Wine, Trails & Experience-Led Travel

From “Roll Out the Barrels” events in PEC to early open houses in Niagara, wine regions are seeing a tourism revival rooted in experience. Travelers are booking around:

  • Winery weekends
  • Boutique stays
  • Wellness retreats
  • Farm-to-table itineraries

And tourism boards are responding, calling for the return of the Ontario Staycation Tax Credit to further incentivize local exploration.

 What to Watch

  • Economic uncertainty still looms. While bookings are high, discretionary spending may slow if a downturn hits mid-season.
  • Infrastructure in popular areas like PEC is under pressure, prompting municipalities to reinvest revenue from the Municipal Accommodations Tax into roads, services, and staffing.

 What This Means for Wineries & Hospitality Operators

  • Now is the time to double down on experiential offerings: private tastings, vineyard tours, chef-led dinners, and curated stay packages.
  • Optimize for short-lead bookings and weekenders. With domestic travel booming, flexibility and last-minute appeal are key.
  • Tell your local story. Travelers want to feel connected to where they are, from the vineyard to the plate.

What to do now:

  • Host or promote seasonal events like wine & dine nights, brunch on the vineyard, patio launch parties.
  • Build “Staycation-Friendly” packages with hotels, B&Bs, or tour operators.
  • Use social media to romanticize local travel. Show off your patio, your cellar, your people. Make your spot THE destination.

POLICY + PRICING WATCH: Big Shifts in Ontario’s Alcohol Landscape

As of April 1, 2025, Ontario’s alcohol pricing policies saw some significant updates that will directly impact pricing strategy, margins, and promotions across the industry. 

Spirits Pricing Just Got More Flexible

Ontario eliminated the minimum retail price for spirits and spirit-based RTDs, giving producers, retailers, and bars greater freedom to set competitive pricing. This opens the door to lower-cost cocktails, spirits-based happy hours, and price-driven promotions especially useful for boosting weekday traffic or launching new products.

Wine + Cider Minimums Inch Up

While spirits gained flexibility, minimum retail prices for wine and cider nudged slightly upward, in line with Ontario Regulation 750/21 under the Liquor Licence and Control Act, 2019. While the increase is modest, it’s a good reminder to revisit your product mix and pricing tiers to maintain healthy margins.

LCBO Eases Pressure on Brewers

The LCBO paused a planned 4.4% distribution fee increase for beer products sold through The Beer Store, supermarkets, convenience stores, and bars. This pause eases pressure on brewers, particularly smaller craft operations, many of whom are already navigating tight margins and rising operational costs.

What to Do Now

  • Build a spirits-focused happy hour or a budget-friendly cocktail feature that leverages the new pricing flexibility to increase midweek sales and volume.
  • Review your pricing strategy both retail and wholesale. Are you maximizing the margins created by recent policy changes? Now is the time to adjust before competitors do.
  • Stay nimble and informed. These updates are part of a shifting landscape. Our team is actively monitoring provincial pricing and regulatory changes weekly to keep clients ahead of the curve.

So… What Now?

March was a monster month. And as April kicks off, your opportunity is clear: adjust quickly, market smartly, and meet your customers where they’re at physically, emotionally, and financially.

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