Something big is brewing in New Zealand’s craft beer industry

Wellington brewing company Funk Estate founder Jordan Evison has seen business more than double in the past year.
Maarten Holl

Wellington brewing company Funk Estate founder Jordan Evison has seen business more than double in the past year.

Wellingtonians love craft beer and the industry is bubbling, with strong growth expectations attracting investors, new research shows.

ANZ's 2015 industry insight shows the craft beer business has grown by 40 per cent in the past year and more than one third of New Zealand's 100 craft brewers are gearing up for expansion into offshore markets.

The report shows the number of  brewers doubled in the past five years, intensifying domestic competition. Strong demand had increased growth for producers by 20 per cent.

Tuatara Brewery chief executive Richard Shirtcliffe said his business was slightly ahead of the 40 per cent growth.

He believed most of the growth cited in the survey would be from mainstream breweries making craft beer and not the independent breweries, which made up about 2 per cent of the market.

In July, brewers from Panhead, Tuatara, Garage Project, Parrot Dog and Yeastie Boys gave the US beer capital of Portland a taste of Wellington during the Oregon Brewers Festival.

Shirtcliffe is pursuing the idea of a brewer exchange between New Zealand and the US as one way of tackling the US market and inspire innovation.

Jordan Evison, the founder of Wellington contract brewing company Funk Estate has seen the volume of beer more than double in the past year.

The business had been in operation for three years and the beer was made by three other breweries.

The contract brewing business model was a quick way to get into the industry and did not require a big investment, he said.

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"Making the jump into full time brewing is where investment is needed and that is part of our future plans."

The ANZ report shows investors are putting their money where their palate is.

It cites Garage project business manager Jason Crowe saying: "There is no shortage of capital".

ANZ regional manager Rob Simcic said investors are funding New Zealand craft  brewers at rates significantly higher than overseas brewers and other industries.

"Reflecting the high returns they see flowing from craft beer's exceptional growth potential."

The survey shows 80 per cent of brewers cited 'following my passion' as their top reason for being in business.

But as the sector transformed from cottage industry to corporate, passion needed to come along with business skills, he said.

Developing brewers' management skills and investing in sound planning would be key to uncapping craft beer's full export potential.

Simcic said New Zealand breweries were selling beer in 40 countries and indicated exports were just getting started.

The Asian market was seen as holding the most exciting prospects as its fast-growing middle classes develop a taste for craft beer.

Sales to Asia – including China, the world's largest beer consumer – have more than doubled in two years.

Carl Harrington of the Kereru Brewing Company in Upper Hutt, said, exporting was a challenge worth accepting and required dedication and vision.

Breweries were discovering collaboration was the key to export success.

Wellington brewers Yeastie Boys and Tuatara Breweries, Renaissance Brewing from Blenheim, 8 Wired Brewing Co from Warkworth and Three Boys Brewery from Christchurch formed New Zealand Craft Beer Collective, designed to get their beer out to the world. 

The collective now has a distribution agent in Britain.

NZ craft beer rising to the top:

111 craft breweries 

Off-premise retail sales up 42 per cent since last year.

13 per cent of beer sales by value in New Zealand.

Sold in about 40 offshore markets.

About 25 brewers exporting; another 20 could join them within two years

$2.7 million worth of craft beer sold to Asia (half sold in China).

(Source: ANZ 2015 Craft Beer insights)

Wellington craft beer market:

In 2010 there were five craft breweries, adding about $3 million to Wellington's economy.

By 2013 there were 12 breweries in business, adding $12.3m in economic benefit, nearly doubling to $22.3m in 2104.

(Source: Grow Wellington)

 - Stuff

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