Craft beer bucks recession

John Harrington could not be happier.

His Christchurch brewery Harrington's is brewing more of the brown stuff than ever before, which means a record number of people are drinking it.

Only last week, the former publican turned award-winning craft ale brewer handed over his biggest excise cheque to the government's customs department in nearly two decades of brewing – an act that generated a perverse expression of triumphant satisfaction.

"You must think I'm mad," says the self-confessed straight talker. "But the truth is I feel on top of the world. We've never been busier and the demand for our beers just seems to get stronger and stronger."

Craft beer is undergoing something of a resurgence in New Zealand, with sales of fragrant, malty, emphatically hopped brews soaring, to the detriment of ordinary beers.

From its humble beginnings at the Wards Brewery in the early 1990s where some 3000 litres flowed through the tanks each week, Harrington's has evolved into a force to be reckoned with. It has eight bottle stores, two bars, two breweries and 24 different brews to boot.

The company produces about 25,000-30,000 litres a week.

Its bottled beers have made their way on to the supermarket shelves, helping drive turnover to about $10 million a year.

Not bad considering New Zealand's overall beer market slumped nearly 5 per cent in the year to September.

In November, the country's second-largest brewer DB Breweries revealed a near 80 per cent slide in annual profit, while Lion Nathan lifted pre-tax profit by 5 per cent.

"Beer drinking has changed for the better," Mr Harrington says.

"Instead of people filling themselves up on too many jugs of the bland watery stuff, they're buying Harrington's and consuming it in a more respectful style and attitude."

In the United States, craft beer volume jumped over 10 per cent last year.

"We're not quite there yet but production is growing and that's plain to see," says Brewers Guild chairman David Cryer.

"People might be drinking more at home but they're not downgrading, if anything they're spending more at home than they do when they're out.

"People want better quality, they want to know where it came from and who the people are – they're buying the story and they're willing to pay more."

Between January 2008 and June 2009, the New Zealand craft beer market grew by 2.5 per cent, according to a survey by independent researcher Phil Dunbar.

New Zealand is now home to more than 40 self-titled craft brewers and that number keeps expanding.

Production at Emerson's in Dunedin has reportedly topped a million litres annually, while Tuatara Brewery has quadrupled the size of its site in Reikorangi, near Waikanae, in only three years, winning the Deloitte Fast 50 accolade of fastest growing manufacturing business in the lower North Island.

So why the dramatic change in consumer demand?

"It's simply that there's a growing affluence in our communities among certain demographics who are ageing, who have travelled, who have lifestyle changes and whose flavour and taste appreciations have grown as they have," says Richard Sinke, owner of Christchurch brewpub Dux de Lux.

"They're more willing to experiment with different products rather than the mainstream, and that's reflected in the opportunity for smaller brewers to enter the market."

- © Fairfax NZ News