Wellington's craft brewers offer choice

FREEDOM OF CHOICE: Dominic Kelly says the diversity in the market now is a reaction to the long domination of the big brewers.
FREEDOM OF CHOICE: Dominic Kelly says the diversity in the market now is a reaction to the long domination of the big brewers.

The average beer drinker might be surprised at what they're presented with when asking for a pint at a growing number of establishments in Wellington – a choice.

That's because our capital city has over recent years established a reputation as New Zealand's premier venue for the libation of fine beer.

Broad industry estimates suggest Wellington consumed about 40 per cent of the 6.5 million litres of craft beer produced in New Zealand last year.

That equates to 13 million pints of craft beer downed in Wellington annually, fetching about $120m in gross proceeds, given that punters pay an average of $9 a glass – and that excludes imports.

And although the back-of-the-envelope calculation is open to debate, chiefly over what is and what isn't a craft beer, what is undeniable is that this niche economy is growing.

A large contribution to this has come from the emergence of craft beer bars: the number of outlets serving non-mainstream tipple on tap rose from about three to close to 10 in Wellington in the past two years.

The likes of Malthouse, Hashigo Zake and Bar Edward are among the more established venues.

Dominic Kelly, proprietor of Hashigo Zake, thinks the success of niche bars is due to the market dominance of Lion Nathan and DB, the giant brewers that produce the bulk of New Zealand's beer.

"I would posit that the kind of market we had for decades, dominated by a duopoly, is an aberration, and what is going on now is a correction," he said.

The boom has also been helped by the concentrated nature of Wellington's nightlife. The bulk of bars are based in the city centre, giving fellow bar proprietors a good look at what's pulling the punters in.

"We've had the government dollar, and there has been money to spend here," said Kieran Haslett-Moore, a beer specialist at Regional Wines & Spirit, a specialist liquor store based in Wellington.

He says that in much the same way as coffee and wine have become increasingly sophisticated, so beer tastes in the city have evolved to the point where it has now become mainstream.

Indeed, many of the major supermarkets have started stocking craft beer, reaching deep into the suburbs as far as Porirua and Upper Hutt.

The adoption of craft has also extended beyond specialist pubs and sellers. A large number of fine dining establishments in the city, such as Logan Brown and Martin Bosley's, feature beer as part of the food matchings.

That appeal is now growing to where the bulk of licensed eateries in the city serve craft beer, either by bottle or by glass, a notable contrast to many other places where only the brands owned by the majors are represented on tap and in their fridges.

"Looking at the sales graph, volumes from October 2010 to October 2011 have doubled," said Craig Bowen, the proprietor of Beer NZ, the country's biggest craft beer distributor. "We've seen that consistently year on year."

The craft beer economy in Wellington has also grown beyond just the selling of beer.

Hashigo Zake, for example, has expanded into the business of keg rentals, having built up a stock of kegs while importing beer from the United States.

It now operates a sideline business leasing these kegs to niche brewers, which helps them to distribute their product to a wider market.

Wellington also hosts beer-specific events akin to the gourmet food fairs held around New Zealand.

Beervana, run by craft luminary David Cryer, attracted 5800 visitors this year, up from 3800 in 2010, and featured 85 breweries. The event also features the BrewNZ Beer Awards.

In fact, the only area of the industry where Wellington comes in underweight is on the brewery side, with Tuatara the only commercial craft brewer in the region.

The rapid growth of the scene has raised the question of whether the craft economy is a bubble about to burst.

Hashigo's Kelly said that each additional craft bar has a sawtooth effect on the specialist side of the market, where "they take a little bit of business from everyone, and then the total sector grows and we return to where we were".

Cryer sees no bubble, saying "Craft is 2.5 per cent to 3 per cent of the market. I can see craft getting to 5 per cent without Mac's or Monteith's and we might get to 7 per cent, which is where the US is." Mac's brewery is owned by Lion Nathan, and Monteith's by DB.

Regional Wine & Spirits' Haslett-Moore says the genie is well out of the bottle.

"There will be fluctuations and there will be points where the wave gets really big and recedes a little.

"But in the end, look at wine: we haven't gone back to drinking non-varietals, the sweet dry medium wines of the 70s."