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Craft coming to the crossroads

Craft coming to the crossroads

Number of craft breweries continues to expand - challenge now to grow share of market

The New Zealand craft beer sector continued to expand in 2016 with almost 200 breweries competing for a modestly growing share of the beer market, according to the annual ANZ Craft Beer Industry Insights report.

Since 2011 the number of small breweries has grown at around 16 percent year on year. Today there are nearly 200 breweries in New Zealand producing more than 1,600 unique craft beers.

Small brewery production volume has grown at 22 percent and small brewery revenue has grown by up to 32 percent, as their share of the total beer market value gained another 1.5 percentage points (to 10 percent in 2016).

“Small breweries have become a big business. New brands are appearing all the time and together the industry is changing the way many New Zealanders think about and consume beer,” said John Bennett, ANZ General Manager, Central Region, Commercial & Agri.

Retail sales data from Nielsen Scantrack shows beer in the $10 to $15 a litre price bracket has been gaining momentum over the past three years growing to 15 percent of sales by volume (up from 10 percent). The sector has also seen job growth, employing an additional 400 plus people since 2008.

With so much choice it is a great time to be a consumer, Mr Bennett said, but brewers are finding intensifying competition for retail shelf space.

“I am confident we will continue to see growth but brewers need to be smart about how they sell their product; it is about more than just good beer,” he said.

“What can we learn from more mature markets and industries in terms of quality control, distribution, branding and tapping other markets? These are questions for a burgeoning industry, but they are great issues to have, especially with an increasingly passionate and discerning consumer.”

Exporting remains a challenge for the industry with exports remaining static at around 10 percent of beer production, with considerations such as cool chain continuity impacting the shelf life of the more volatile styles of craft beer.

It’s a challenge worth solving, Mr Bennett said. The more mature New Zealand wine sector exports approximately 80 percent of annual production for export earnings in excess of $1.6 billion.

“Successful exporters, and successful brewers full-stop, can offer something unique to a cleverly-targeted audience.

“Those are the brewers who will outlive the industry’s growing pains and capitalise on the superpower potential of this exciting industry.”

© Scoop Media

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