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American band Alabama Shakes is one of the headlining acts at Field Trip.Rich Fury/The Canadian Press

Music fans who ventured to Toronto's historic Fort York site last June could be forgiven for having their attention torn from the headliners on the main stage: over in a corner of the vast field, Stars frontman Torquil Campbell serenaded tots and their hipster parents with an operatic version of Frozen anthem Let It Go, while teens in flower crowns tried their hands at hula-hooping nearby. Gourmet food trucks and signature cocktails supplanted beer and hot dogs, and forget about boring band T-shirts – the Drake General Store was on hand to offer much more stylish merch.

Welcome to Field Trip, a forerunner in the music-festival-as-experience trend. Now in its third year, the two-day event produced by influential Toronto independent record label Arts & Crafts was launched as part of the label's 10-year anniversary celebrations in 2013, but has since grown into a can't-miss date on the summer concert calendar.

After years of attending music festivals across the globe, Arts & Crafts head Jeffrey Remedios and his co-founder Kevin Drew (frontman of Broken Social Scene, the band that built the label) reasoned Toronto was overdue for a different kind of festival.

"We've spent years taking inspirational notes and making critical observations," Remedios says. "We take a very global view of what we're doing in a hyper-local, community-driven way. It's a fine balance marrying the two, but I feel our team does that super-well."

What began as a salute to the label – buoyed by an unexpected Broken Social Scene reunion that first year (marking the 10th anniversary of their breakthrough You Forgot It in People album) – has now morphed into a festival showcasing not only the label's artists, but an eclectic array of top headliners and under-the-radar discoveries. The third edition of Field Trip, taking place this weekend, features everyone from Billboard chart-toppers Alabama Shakes to children's entertainers Sharon and Bram.

Underscoring that mix is the label's long-time focus on the city's creative kinship, from bringing in local visual artists to transform the site (this year's event includes installations by Feist collaborator Heather Goodchild) to partnering with fellow promoters to help program the side stages.

"Community is a word that can be used easily but not mean a lot," says Arts & Crafts events manager Aaron Miller, who oversees the festival's programming. "Our community is the City of Toronto – whether someone is on our roster or not, they're still a part of what we do. Jeffrey refers to it as our 'annual love letter to Toronto,' and I think that's a nice way of putting it."

While its diverse lineup, community focus and family-friendly approach (kids under 12 get in free) have helped Field Trip carve out a niche in the ever-crowded summer festival market, competition is fierce this year with new international offerings such as WayHome and Bestival elbowing their way into the Ontario scene. (Musician Craig Dunsmuir, a clerk at local indie record shop Soundscapes, notes Field Trip has been outselling other festival tickets at the retailer in the lead-up to this weekend's event.)

Michael Hollett, a co-founder of Toronto summer-festival mainstay North by Northeast, says that while the market is saturated, events such as Field Trip that offer more of a curated experience should continue to succeed. "Each of the many events happening in Toronto have their own aesthetic and vibe," Hollett says. "Field Trip and all the other events help reinforce the city's reputation as a music tourism destination."

While this year's Field Trip bill offers something for nearly everyone – from hip-hop veterans De La Soul to electro iconoclasts Purity Ring – there was one notable absence from the lineup: After performing for the first two years of the festival, beloved local indie army Broken Social Scene won't be there this year.

"The spirit of Broken Social Scene is alive at Field Trip every year, regardless of whether they play or not," Miller points out, noting that BSS members Kevin Drew and Andrew Whiteman (Apostle of Hustle) will both be performing.

"The beauty of BSS, of course, is that there were so many individual artists and projects that fell under that banner, so if Stars or Feist or Metric ever came back to headline, no one would be complaining that BSS weren't together any more," says Toronto author and music critic Michael Barclay. "And this year's headliners, even though they're all American, appeal to the same demographic attracted to Arts & Crafts acts – of which there are still plenty, just placed lower on the bill."

One of those acts is Vancouver singer-songwriter Dan Mangan, who was added to the inaugural Field Trip at the last minute after his first child was born early. He and his band are looking forward to the convivial atmosphere of Field Trip after a gruelling spring tour of dark clubs and long days of driving, he says on the phone from a stop in New York.

"They're not trying to be a huge 30,000-person festival with massive headliners – they're trying to develop a well-rounded experience where people who want to party can do that, while families can also enjoy themselves and the artists also connect with each other," Mangan explains. "That doesn't happen by accident. Broken Social Scene prided itself on being Toronto's house band for a decade, and in a way, Arts & Crafts is like Toronto's house label."

Although fellow festivals such as Guelph's Hillside may have paved the way for Field Trip's fan-friendly ethos, its organizers hope the still-young event will not only continue to evolve, but also grow and thrive in the process.

"Every festival strives to do something unique," Miller notes. "For us, our competitive advantage is our attention to detail and our place in the community. It's not just a bunch of great artists on a poster – the city really comes together and galvanizes around this event. If that continues to happen, we're happy to keep doing it."