Keeping spirits high: brewing in a niche market

The 2019 Australian Craft Beer Survey results backed up what a lot of anecdotal evidence has shown over the past five years – Australian consumers like their craft beer. The survey showed that the attitude of 68 per cent of those surveyed towards the regular release of new/limited beers was ‘exciting and shows the creativity of breweries’, while only 5 per cent thought it ‘reduces the quality of beer’.

Craft brewing has been around since beer was invented, however as a brand becomes more popular and moves into the mainstream, it loses the moniker. In modern times, Western Australia’s Matilda Bay is considered the first in the renaissance of craft beer when it was launched in 1984.

The average craft beer drinker is aged between 30 and 49, while unsurprisingly the Eastern states make up 86 per cent of all craft beer drinkers. It is a business that is not only flourishing but attracting new start-ups at a fast rate.

Peter Philip is chairman of the Independent Brewing Association (IBA), and founder of the Wayward Brewing Co. The IBA has more than 500 members and is a fierce advocate of the industry, which is currently growing at the rate of one new brewery opening every six days.

“The craft movement started because people were looking for something different,” he said. “I don’t particularly think that is a new trend. It has been a trend for the past 50 years that craft brewers tapped into and that is what created the whole craft industry.

“It is a segment that is a major growth area and really resonates with rural and regional Australians. They are bringing a whole new beverage to country towns. Country towns are thirsty places so people are really getting behind those small breweries.”

Acquisitions
Some have been so successful, they have been bought by some of the bigger players. Carlton & United Breweries’ (CUB) acquisitions over the past couple of years include 4 Pines, Pirate Life, the award-winning, Mick Fanning-backed Balter and its initial purchase of the aforementioned Matilda Bay Brewing in 1990, which has closed and opened on different sides of the continent.

“We opened the Matilda Bay microbrewery in Healesville, Victoria late last year, with the father of craft beer in Australia, Phil Sexton,” said Julian Sheezel, vice-president of corporate affairs for CUB.

Another major brewer, Lion bought Little Creatures but tends to start up its own craft beer brands from its Malt Shovel subsidiary, including its James Squire range.
For some younger consumers, they will be hard-pressed to know that such a well-known brand as Hahn’s started out a boutique beer. And while founder, Chuck Hahn might not be the father of craft beer, he could claim the title of grandfather. Approaching his 50th year in the business, starting out at Coors in the US, Hahn is now the Brew Master at Lion and shows no signs of slowing down. He has some nostalgic memories of those days gone by.

He even helped revive one of the original craft brands that was established on the east coast in the 1980s.

“We’ve been developing authentic brands rather than going out and buying,” he said. “The Hahn brewery was one of the first craft breweries on the east coast, along with Power Burning Company, which was born in 1988 along with the Eumundi Brewery started by John Lynch up on the Sunshine Coast.

“Ten years ago, Lion was able to buy the trademark for Eumundi and about a year ago we put a small brewery back in to the same motel – the Imperial Hotel just across the way from the Eumundi markets – and we rebirthed that brand. We eventually convinced our marketing department to develop the brand and that is what we have done.”

While some brewers are happy to rest on their laurels and find a niche in their local country town, shire or even city, a lot of companies – Balter being the latest example – are looking for the big pay day when one of the bigger brewers can no longer ignore their presence.

What does a multi-national brewer look for when buying up a smaller player?

“Businesses we’ve purchased have all had great people, great products and enormous potential,” said Sheezel. “We look for businesses whose owners are passionate about making great beverages and are committed to creating value not only for both parties but also for our customers across the country.”

There have been many ups and downs in the industry. According to a report in the Sydney Morning Herald, data showed that just over 250,000 businesses were deregistered from the Australian Securities and Investments Commission between July 2017 and June 30 2018. In other words a lot of businesses fail. The specialty beverage space is no different. Many players believe that the state and federal governments could do more to help.

A taxing time
If you talk to Philip and Hahn, they believe that the craft brewers in particular have it a little harder as they are treated differently from the big players.

“Australia is one of the highest taxed countries for beer and alcohol,” said Philip. “We’re contributing more than our fair share to the tax coffers. Over half the production cost of the beer is tax – more than we are paying for the malt; more than we are paying for the hops; more than we are paying our staff. It is our single biggest ‘supplier’ that we are having to pay. We’re overweight in terms of what we are paying compared to other countries.”

Hahn concurs.

“Australian alcohol is taxed almost more than most other places in the world. Excise is based on your alcohol level,” he said. “We’re paying over $2 a litre in tax, even more so if it is more than 5 per cent alcohol. In the US it is a about one tenth of that – about $0.20 a litre. Excise tax is the biggest single cost to making beer. It’s crazy. You might use $1 a litre or $1.5 a litre for all your malted barley and hops and processing, but not $2 a litre. People don’t realise that and the excise just went up again. It goes up every six months.”

There has been some relief thanks to lobbying of the IBA and its predecessor the Craft Brewers Industry Association (CBIA), according to Hahn.

“This is something we fought for in the CBIA and finally got the government to allow the smaller breweries to claim back $30,000 a year on excise,” he said. “Further lobbying by the IBA got it up to $100,000. That has helped smaller brewers exist. It doesn’t hide the fact that Australia pays more money to the government than almost any other country in the world.”

CUB’s Sheezel also believes it is an issue that needs addressing.

“Australians now pays one of the highest beer taxes in the developed world, much higher than the UK, NZ, the US and Germany,” he said. “Beer should not be a luxury – it’s the drink for the everyday Australian. Given the sensible approach shown to alcohol consumption by the vast majority of Australians, the high tax slug on Australians is just not right.”

A matter of choice
One of the key issues that is always on the drawing board is how sustainable is the industry? With a brewery opening up every six days, won’t there become a saturation point somewhere? Depends on who you talk to. Under the right conditions, Sheezel believes it is sustainable.

“Australian beer lovers have more beers to choose from than ever before,” said Sheezel. “We believe any brewery that will brew consistently high-quality, small-batch beers in an environmentally sustainable way can expect to be sustainable.”

The IBA does see a bit of a David and Goliath situation playing out between its members and the bigger brewers. As well as the tax issue, he believes that the government should examine the tap contracts the bigger breweries have with hotels and bars, which he believes are not as fair as they could be towards the smaller brewers. He said that the craft brewers get on well together and back each other up – not just in trying to gain marketshare, but in the more practical aspects of making their favourite tipple.

“There’s an amazing camaraderie in the industry. Small, independent brewers help each other every day,” he said. “We don’t view each other so much as competitors, we view each other as co-partners in building an industry. Most days of the week I’ll get a call from somebody saying, ‘I’m short a bag of grain, can I borrow one off you?’ And they come on over and grab it. That is the kind of industry we are in.”

But with a lot of craft beers now becoming mainstream, isn’t it an industry that will slowly become the norm anyway? There are also aforementioned beers like Hahn and Balter that are now mainstream or about to become so. Philip pulls out an interesting statistics that shows that there is still a gulf – whether it gets bigger or not, only time will tell.

“Large brewers own 94 per cent of the market and have virtually unlimited access to capital and they can use that to automate their processes to a massive extent,” he said. “We are 6 per cent of volume but employ 47 per cent of all the people in the industry. It shows how automated they are, and how much of a craft industry we are. It truly is hand-crafted products and that has a cost implication. Our operating costs and production costs are massively higher than the multi-nationals.”

Distilleries
And it’s not just beer where boutique beverages are making a splash. The spirit space is also making waves and not just in Australia.

Mr Black is a high-end coffee liqueur that is distilled in New South Wales’ Central Coast. It was started by Thomas Baker and Phillip Moore and was borne out of a gap in the market that both men saw.

“Philip was so excited when he met Tom at the distillery. Together, they collaborated, started a company, and after two iterations, released Mr Black,” said the company’s operations manager Rick Roper.

In 2014, Mr Black went on to win a gold medal award at the London Spirit Show as the finest in its category and has consistently won international awards since that time.

“They launched the product in the UK not long after developing it, and in a relatively short period of time it has become the leading coffee liqueur in both of those markets,” said Roper. “In 2017, it was launched in the US and is now the biggest selling Australian spirit in the US. Although it is Australian based, it is expanding globally. It is continued to manufactured at Distillery Botanica. It is highly regarded. It’s blended with a high-quality grain spirit and is crafted into Mr Black. It is sold through on and off premises. It’s now also now being distributed through the Asia Pacific.”

Then there is Bryon Bay Slow Gin (see story page 36 of this issue), that uses the Davidson Plum as its main ingredient.

The plum is a native of Australia, and something that co-founder of the Cape Byron Distillery, Eddie Brook, sees as something that all spirit producers can embrace and make them a point of difference in the world market.

The company also produces a macadamia nut and roasted wattle seed liqueur.
“You get this rich butterscotch, toffee, toasted nut flavour, almost coffee and dark cacao notes coming through as well,” Brook said. “It has been a really great addition. Later this year we will be releasing a few other spirits around the native fruit-infused line in particular.”

The future
Overall the niche beverage industry is expanding and there are a slew of distilleries and breweries popping up all over the country. What is the advice from some of those who have already made the journey to those that are starting out?

“One thing I would say about brewing is that cleanliness is next to godliness,” said Hahn. “Any problems that are associated with brewing are usually housekeeping and in hygiene.
“The next is you have to deliver on consistent, quality favour. If the beer looks flat, then it doesn’t look appealing. If it doesn’t look appealing, then you need to work on presentation.

“Finally, you have to have the brewer out there talking about the beer. That is something that I have always done.

“I used to have three or four beer dinners a month at various hotels to get Australians to taste beer rather than just drink it. It’s more about tasting rather than slamming it down. I say slam it down slowly and savour the flavour, which leads to responsible drinking, which is what the craft element is about.”

Sheezel sees a few trends coming through that are not just about beverages themselves but where they come from.

“Over the past five years we have seen an increase in mid-strength beers sales, the demand for a greater variety of beers and more demand for beer in cans and we expect these trends to continue in coming years,” he said. “Consumers are increasingly consumption-conscious, and interested in what goes in to their products. Consumers are increasingly interested in sustainability, a focus that will only intensify in coming years.

“We also believe drinkers will place a greater premium on convenience, so that they can enjoy drinks in much the same way beer has traditionally been enjoyed.”

The last word is left to Philip, who despite some of the challenges, loves the industry.
“It is enormously satisfying to deal with people who have fun and enjoy the product that they create,” he said.

“We are being creative in how we come up with new products and how we engage with customers. And this is why the public respond like they do to independent beers because we’re giving them an experience that they can’t get from some of the mainstream beers.”

Why batching is crucial when it comes to brewing

The art of brewing a fine beer demands time and patience. Equally important, selecting the right processing equipment will ensure that the taste is always as expected.

Although the craft beer market in Australia is still new, the beer brewing industry is expanding rapidly across the country. As reported by The Independent Brewers Association, local brewers are a small but increasingly significant part of the $6.5 billion Australian retail beer market, not to mention that the number of smalls breweries in Australia has remarkably increased in recent years, with a new brewery opening every 6 days. According to Craft Beer Reviewer, a body that provides data about craft beer breweries in Australia, there are more than 690 craft beer breweries in the country; and just since 2017, the Australian beer market has seen the launch of 230 new breweries nationwide. New South Wales, Victoria and Queensland are the biggest contributors with a total number of 494 craft beer breweries shared among them.

For microbreweries who pride themselves with producing unique and personalised flavours of beer, any slight change made to production process whether it is the ingredients used or the cooking time, could have unfortunate consequences for a particular and distinguished taste. To ensure that the taste is always as desired, it is critical to have the right equipment to accurately measure and batch the correct amount of ingredients with perfection.

JSG Industrial Systems has introduced into the Australian beer brewing market the Flomec G2 Stainless Steel Flowmeter. A cost-effective yet reliable fluid meter designed to suit a variety of brewery installations. Breweries report that using the Flomec G2 meter improves the quality of beer by making each batch consistent and highly controlled, which is considered one of the most critical procedures during the brewing process.

This reliable flow meter is highly accurate with an inbuilt display unit that does not require power to operate, which simplifies the production process greatly and enables seamless operation. The Flomec G2 is suitable for a variety of batching applications as it is available in different sizes to suit various process lines. The reasons to why this accurate and reliable meter is finding a perfect fit in breweries across Australia are due to the fact that it is quite a cost-effective solution suitable for any type of brewery, offers excellent fluid compatibility in the brewing process, and it’s easily removed, cleaned and maintained.

JSG Industrial Systems designs, develops, and supplies engineered industrial systems which increase assets lifetime, reduce operational risk and contribute to environmental sustainability. The company provides access to products and services for a variety of global sectors including food & beverage, mining, transportation, agriculture, marine, energy, construction, and manufacturing.

For more information
Contact your JSG Industrial Systems representative on (02) 9914 8720 or visit www.jsgindustrial.com

Kelloggs taps into craft market with cornflake beer

There’s nothing better than two mates coming together over a cold one on a spring afternoon. Born out of Botany, NSW, two mates have done just that, developing a limited-edition craft beer.

In an Australian first, Kellogg’s Corn Flakes take centre stage in a craft beer collaboration with microbrewery One Drop Brewing Co. The two Botany-based businesses have come together to develop and produce the unique limited-edition Kellogg’s Corn Flakes Nitro Milkshake IPA.

Using famous Kellogg’s Corn Flakes in the beer, the Milkshake IPA is a creamy, full-bodied sweet beer with the right slice of hoppy bitterness.

Proudly brewed and canned at the Botany brewery and taproom, the Kellogg’s Corn Flakes Nitro Milkshake IPA is the perfect blend of fruity and creamy. Craft beer aficionados will be able to detect how Sabro, Citra and Simcoe hops take the lead in bitterness, without distracting from the huge hits of ripe strawberry, passionfruit, coconut and mango.

Bruno Madonna, Director of Research and Technology at Kellogg said: “We’ve always had a love of combining innovation with great tasting product at Kellogg.

“Kellogg’s Corn Flakes has been a catalyst to many amazing creations over the years so partnering with local Botany brewery, One Drop, seemed like a no brainer. This beer is a fun way to remind Aussies of the versatility of cereal.”

Nick Calder, head brewer of One Drop Brewing Co. said: “We’ve seen the craft beer market grow exponentially the past few years and we wanted to bring a fresh take to the scene. Using one of Kellogg’s best-selling cereals to produce a trendy Nitro Milkshake IPA was an amazing opportunity to create something different.”

Husband and wife duo Clay Grant and Meg Barbic, who founded One Drop Brewing Co., added: “There really is nothing like getting together with your neighbours over a cold one, and that’s exactly what we did – collaborate with our Botany neighbour Kellogg to produce a great tasting craft beer.”

The Kellogg’s Corn Flakes Nitro Milkshake IPA is brewed and canned at the One Drop headquarters in Botany and available until stock runs out.

GABS Hottest 100 Aussie craft beers of 2018 announced

The rise of Queensland as a craft beer powerhouse, the increasing popularity of independently owned breweries, and the importance of ‘localism’ are some of the key trends revealed in Australia’s biggest craft beer poll.

Now in its eleventh year, the GABS Hottest 100 Aussie Craft Beers poll shines a powerful spotlight on the trends, brands and breweries shaping the booming craft beer industry. Described by Australian Brews News as”the largest and most influential people’s choice poll in the land,” the 2018 edition saw a record 31,000 beer lovers place more than 155,000 votes for their favourite craft beers of the year, then celebrate the live countdown on Sunday 27 January, many at the 45 official events held around the country.

From a field comprising some 2,350 beers from more than 260 breweries, Gold Coast brewery Balter claimed the title of Australia’s favourite craft beer for the second year running with their ‘XPA’ (Extra Pale Ale). Part-owned by champion surfers Mick Fanning, Joel Parkinson, Josh Kerr and Bede Durbidge, Balter has proven to be a dominant force in the craft beer landscape, as evidenced with an impressive three beers in the top 10, including their IIPA (Double IPA) and IPA (India Pale Ale) in 6th & 7th position respectively.

Balter’s IIPA was one of 21 beers released in the last twelve months to make the list, demonstrating the impact that a popular release can have in the fast moving craft beer sector. The New England IPA, or ‘Hazy IPA’, style was prevalent amongst these new entries, and doubled its presence overall with beers including Hop Nation’s ‘Jedi Juice’ (#9), Dainton’s ‘Blood Orange New England Rye IPA’ (#36) and CoConspirators’ The Matriarch (#63).

In second position was Stone & Wood’s Pacific Ale. Celebrating its tenth anniversary in 2018, the iconic beer from Byron Bay has now appeared on the Hottest 100 podium for nine consecutive years, making it the most loved beer in the poll’s history. Also returning to the podium was Crankshaft from BentSpoke in third place, topping a charge of five beers from the popular Canberra brewery, all placing within the top quarter of the list.

Localism appears to be an influential factor throughout the results, with craft beer drinkers increasingly supporting beers and breweries from their immediate region. This year’s list features the very first Northern Territory brewery to appear, with fans and local media getting behind Darwin’s One Mile Brewery to rocket four of their beers into the big league. The Sunshine Coast also voted with a parochial view, elevating popular local breweries Your Mates, 10 Toes , and Brouhaha into the list, and regional NSW favourite The Welder’s Dog rallied strong support to place four of its beers, including the first ever Ginger Beer to make the Hottest 100.

On the broader scale, Queensland continues to emerge as a craft beer juggernaut, with 22 beers from nine breweries (up from 15 beers and 5 breweries in 2017). While New South Wales maintained its overall presence on the list (26 beers from 13 breweries), Victoria, South Australia and Western Australia dropped in representation from last year.

In May 2018, the Independent Brewers Association launched an ‘Independent Seal’ to help educate craft beer drinkers about brewery ownership. The campaign seems to have had an impact in this year’s Hottest 100, with 88 per cent of the beers listed made by independently owned breweries (up from 71 per cent in 2017). Lion owned ‘Furphy Refreshing Ale’ is the highest placed non-independent beer at #25, and was the only non-independent beer to improve its position on the previous year.

The results also show a strong resurgence from Coopers , South Australia’s oldest family owned brewery. In

2017, their ‘Sparkling Ale’ was the sole entry at #97. That beer made the biggest jump of this year’s list,moving 51 places to #46. In  addition, their ‘Original Pale Ale’ came in at #17 and ‘Session Ale’ at #22.

Created by the team behind GABS Beer, Cider & Food Fest , The Local Taphouse , and Stomping Ground Brewing Co (the latter being ineligible for votes due to some common ownership), the GABS Hottest 100 Aussie Craft Beers poll is a proven sales driver for the craft beer industry, with many listed breweries enjoying a boost in brand awareness and sales, as retailers, bars and beer fans use the results when deciding what to buy.

On the remarkable growth of the poll, GABS Co-Founder Steve Jeffares stated “I think it’s just become this wonderful tradition that’s grown alongside the craft beer industry, allowing beer lovers to reflect on their favourite beers of the year and give a vote to the brewers who made them. With breweries opening in all corners of the country, pushing the boundaries of style, technique and creativity, there’s really never been a better time to be a craft beer drinker.”

“And with such a huge number of votes behind it, this year’s list is again very revealing about what people are drinking and enjoying, whether that’s a more mainstream Pale Ale or a Strawberry Rhubarb Sour from their favourite Sunshine Coast local”.

Key statistics:

Poll

  • More than 2,350 beers nominated (from 260 breweries) in the poll
  • Record 31,000 votes received and 155,000+ individual beer votes
  • 45 events held at bars, brewpubs and craft beer venues around Australia to celebrate the countdown

Brewers

  • 46 brewers are represented in the list
  • Balter (QLD) and Capital (ACT) share the most beers in the list with six each
  • BentSpoke (ACT) and Young Henrys (NSW) each have five beers in the list

State by State

  • ACT: 11 beers from two breweries
  • NSW: 26 beers from 13 breweries
  • QLD: 22 beers from nine breweries
  • SA: nine beers from three breweries
  • VIC: 19 beers from 13 breweries
  • WA: 6 beers from three breweries
  • WA/VIC: three beers from two breweries

 

Budget sees craft beer tax cut

Craft brewers and distillers will no longer pay additional tax, allowing them to compete on fairer terms with large beverage companies.

May’s Federal Budget saw the Government increase the amount beverage companies can claim back on their excise and extend the concessional draught beer excise rate to smaller kegs, typically used by craft brewers.

The alcohol excise refund scheme cap will increase from $30,000 a year to $100,000, from 1 July 2019 for all brewers and distillers.

This additional tax relief, on top of the Government’s legislated tax cuts for small and medium businesses, will allow craft brewers and distillers to compete on fairer terms with large beverage companies.

Currently, draught beer sold in kegs exceeding 48 litres is taxed at lower rates compared with beer sold in smaller kegs. This is unfair for smaller brewery businesses. Extending the concessional draught beer excise rates to kegs of 8 litres or more will level the playing field for craft brewers, which typically use smaller sized kegs, to distribute their beer to pubs, clubs and restaurants.

There are around 380 craft brewers in Australia located across each State and Territory, employing the equivalent of almost 2,400 people. These brewers are predominantly small businesses and could benefit both from the increase to the excise refund cap and extended access to the concessional draught beer excise rate.

There are also over 100 domestic distillers, supporting around 1,600 jobs that could benefit from the changes.

Budget to see craft beer tax cut

Craft brewers and distillers will no longer pay additional tax, allowing them to compete on fairer terms with large beverage companies.

Treasure Scott Morrison said in a statement that the Turnbull Government will increase the amount beverage companies can claim back on their excise and extend the concessional draught beer excise rate to smaller kegs, typically used by craft brewers.

The alcohol excise refund scheme cap will increase from $30,000 a year to $100,000, from 1 July 2019 for all brewers and distillers.

This additional tax relief, on top of the Government’s legislated tax cuts for small and medium businesses, will allow craft brewers and distillers to compete on fairer terms with large beverage companies.

Currently, draught beer sold in kegs exceeding 48 litres is taxed at lower rates compared with beer sold in smaller kegs. This is unfair for smaller brewery businesses. Extending the concessional draught beer excise rates to kegs of 8 litres or more will level the playing field for craft brewers, which typically use smaller sized kegs, to distribute their beer to pubs, clubs and restaurants.

There are around 380 craft brewers in Australia located across each State and Territory, employing the equivalent of almost 2,400 people. These brewers are predominantly small businesses and could benefit both from the increase to the excise refund cap and extended access to the concessional draught beer excise rate.

There are also over 100 domestic distillers, supporting around 1,600 jobs that could benefit from the changes.

Craft brewer Brewpack rebrands, plans $35m facility

Brewpack and Stockade Brew are restructuring under the newly formed Tribe Breweries umbrella and will expand into a new facility in Goulburn.

The $35 million project will see Tribe increase production capacity to over 30 million litres p.a. (approximately 3.5m cartons annual production) with eventual potential for over 70 million litres p.a. (approximately 9m cartons annual capacity). The new state-of-the-art craft beverage production facility is slated to be the largest and most sophisticated of its kind in Australia, and will be completed in September of 2018. The facility will boast best in class brewing and packaging technology in cans, bottles and kegs.

While Stockade will continue to operate under its own brand and label, the Brewpack business will now be rolled under the Tribe Corporate umbrella.

Founded in 2012, Brewpack focused heavily on innovative and high-quality craft brewing of its own proprietary brands, as well as sharing its platform with contract brewing partners to further grow the craft industry.

Under the new umbrella, Tribe will also continue to grow its portfolio of craft products through its newly expanded production into premium cider, RTD’s and boutique non-alcoholic beverages as well as enhancing the breadth of offering through its Marrickville barrel room, launching in late April. This site will become the face and destination for Stockade customers to enjoy the distinctive range of craft beers, as well as experience tours and tastings. This site will focus on next generation beer styles, such as oak aged beers and fermented sours, making them the largest brewer of these beer styles in Australia.

Since its launch over five years ago, Tribe’s current manufacturing facility at Smeaton Grange has grown to well over 1 million cartons of production annually, undergone constant upgrades and modernisation programs and offers superior quality, flexibility and innovation. Furthermore, over the last three years the business has grown its production volumes on average by over 50 per cent a year.

WA tourism push needs more beer

The Western Australian Government’s goal to raise the value of tourism to $12 billion by 2020 could be boosted by more attention to ales, pilsners and lagers, Edith Cowan University (ECU) researchers suggest.

Tourism WA’s Taste 2020 quite rightly focuses on the South West region’s premium food and wines as a way to increase the 400,000 ‘gourmet travellers’ who currently grace our state annually.

However, the recent boom in craft breweries indicates wine’s less revered younger brother has earned a seat at the table.

“Judging from the awards brewers in WA are getting, it’s fair to say they’re producing really good beers,” said Nevil Alexander from ECU’s School of Business and Law.

“Craft breweries work very well with wineries and food, as they fit the ‘premium’ reputation of the region, particularly the Margaret River brand.

“However, they need recognition and support to thrive.”

Currently there are approximately 66 craft breweries in WA, with the highest concentrations in Perth and the Swan Valley and between Dunsborough and Margaret River.

Since 2006, craft breweries in Australia have risen from 30 to 528; and an average of 68 new establishments per year have opened since 2014, with a closure rate of only 4 per cent.

 Researching the way forward

In a recent publication from ongoing research, Mr Alexander and Dr Abel Duarte Alonso canvassed 57 craft brewery operators and 219 hobby craft brewers to identify challenges and opportunities related to tourism engagement.

In terms of barriers, commercial brewers pointed to the long distance between breweries, unfair competition from larger breweries and a lack of critical mass.

Hobbyists were most concerned with costs, particularly excise tax on craft beer, but also noted distance.

“Both groups indicated that the craft brew experience would work best in combination with other activities, whether that is gourmet food, wineries or things like festivals and sporting events,” Mr Alexander said.

“This would help overcome concerns about the distance between breweries and provide those taking tours with a more enhanced experience.”

Hobbyists also had a keen desire for behind-the-scene activities such as hop farm tours or opportunities to observe the malting process.

“There is clearly a desire for craft brewery experiences – the whole industry is evolving, and we need to recognise beer as a tourism asset,” Mr Alexander said.

Mr Alexander is also chief steward of the Perth Royal Beer Show.

‘Craft Beer Tourism Development “Down Under”: Perspectives of Two Stakeholder Groups’ was published in Tourism Planning & Development.

Automation and craft beer making

In recent years the craft beer industry has grown to become a competitive $160m industry, with brewers now turning their attention to exports.

When an industry gets competitive, players look around for ways to grow and get ahead of the competition. Automation can play a major role in lifting production and increasing profits for the brewers in this segment.

According to Mark Emmett, Managing Director of HMPS, craft brewers have traditionally been sceptical about automation and weary of the costs. “The fact remains craft beer is a labour of love and automation means more distance between the brewer and his beer” he said.

However, to grow market share and remain competitive, automation needs to be considered.

While it is seldom that any craft brewer would go all out on automation in one go, the stages need to be investigated and engaged. HMPS specialises in packaging and understands that a craft brewer is a different breed of customer all together. A noticeable trend is to start small with bottling conveyers and capping machines and work up to case packer and palletisers.

The degree of automation often depends on the size of the craft brewery.

For all sizes, consistency is a primary goal. Fewer brewers always leads to higher consistency because there’s less chance for human error. In smaller breweries, consistency comes with the nature of the job as a limited number of refined experts have control over the process. But as breweries grow, automation enters the picture to maintain this consistency and reduce how many hands touch the product.

“The ideal is that we grow the automation as the business grows. We are very happy to meet with craft brewers and provide automation advice by doing a study of their current production facilities. We would be able to provide them with output speeds and productivity improvement figures so that they are able to measure the level of profitability they may achieve using various case scenarios” said Emmett (pictured).

HMPS is able to repurpose old machines, integrate existing machines into new systems and sometimes even sell old machines. The company specialises in bespoke solutions so the automation is scalable according to the customer’s requirements. Furthermore, they offer maintenance on machinery, even if it is not their own product.

“The planning phase has become longer because machines need to have the longevity to cope with consumer demands and future growth. For example, a brewer may be packing bottles today but when they move into an export market they may need to change over to cans,” said Emmett.

“And then we understand that whether it is a bottle or a can, there are various sizes and packaging materials and configurations to consider. We spend more time with the customer working out the various scenarios and possible configurations, and designing to accommodate these.

“Consumers are driving manufacturing. Manufacturers are responding to consumer demands at a more rapid pace, and machines need to keep up with these changing demands.”

HMPS is a wholly owned Australian company which specialises in the design, development and manufacturing of high quality machinery for packaging processes. The company serves customers across all industries.

Starting out as a result of the key wine industry in South Australia, the company designed and developed the first Bag in Box machinery back in the eighties and has since grown to offer case packers, RSC, palletisers, carton erectors and sealers, pick and place applications and specialised robotic solutions.

HMPS can offer innovative and specialised machinery which has been adapted to the client’s unique requirements.

“Through our extensive experience in the design and manufacturing of packaging machinery, not just for the locally but also the international market, we are able to advise customers on tried and tested methods to ensure the smooth operation of their business,” said Emmett.

HMPS will be exhibiting at the CBIA Craft Brewers Conference in the Adelaide Convention Centre from 25 – 27 July 2017.

 

Independent beer makers give big brewers the boot

Australia’s small and independent brewers have voted overwhelmingly to removing large brewers from the membership of their trade body.

In addition, the body which until known has been called The Craft Beer Industry Association, has been renamed the Independent Brewers Association.

The body said in a statement that the move is intended to create a body that is better placed to address the challenges faced by small brewers in Australia.

Under new rules for what was the Craft Beer Industry Association, membership will be prohibited for brewers that are more than 20 per cent owned by large brewers or other businesses that hold significant brewery holdings in Australia or overseas.

Previously the association had allowed membership by companies such as Little Creatures, Malt Shovel and Mountain Goat, all of which are 100 per cent owned by global brewing concerns.

“This is a great day for our association and for small, independent breweries in Australia,” said Independent Brewers Association chair, Peta Fielding.

“Our industry is a shining light in Australian manufacturing.  There are now more than 400 small, independent brewing businesses, up from just 200 when the association began five years ago.  The industry directly employs more than 2100 people and generates an estimated $655 million in economic output.”

Not everybody involved in the industry welcomed the move.

Chuck Hahn, a master brewer at Lion which owns Little Creatures and Malt Shovel, told the SMH he finds big versus small debate curious.

“If we measure brewers by their scale, and they need investment to achieve that scale, what message are we sending them – if drinkers love your beer and you grow as a result, are you are no longer a legitimate brewer?,” he said. “We believe it is short-sighted for the craft sector to be squabbling among ourselves. We should be working together to build craft in Australia – feeding off one another’s success as we always have done – rather than confusing beer drinkers into thinking ownership structure has any impact on the quality of what they’re drinking.”

Rocks Brewing releases Nectarine Wit Bier

Rocks Brewing has released a new beer, namely the Conviction Series Seasonal Nectarine Wit Bier.

Originally made in Belgium’s regional areas, Witbier is believed to date back to the 1400s. The soil in these areas was rich and agrarianism was strong with farmers growing crops of barley, wheat and oats, all of which were used to brew traditional Witbiers.

This style of beer is readily open to interpretation and the company has gone to work on crafting an intriguing new take on this historical beer.

A traditional Belgium Witbier is brewed using at least 50 per cent wheat and often oats in the grist. Utilising state of the art mash filter, this new Nectarine Witbier is brewed using 75 per cent wheat, along with oats that lend the beer a beautiful creamy texture and dry finish.

Straying from tradition and adding to the intrigue and complexity of the beer, fresh nectarines have been added throughout the brewing process along with a selection of spices including coriander, ginger & all spice. As a result, this brew is a fruity, tart, spicy, light and intricate thirst quencher.

This beer is a live ale with yeast and fruit present in the cask, the beer will evolve over time heading from fresh and fruity to a more tart almost sour and funky beer, a beer that is ever refreshing yet keeps the drinker thinking and engaged.

Appearance: Pale straw with an almost milky haze and a tight white head.

Aroma: A clove and star anise style spice with sweet nectarine lingering.

Flavour: Initial nectarine sweetness finishing dry and tart.

Alcohol: 4.4 per cent abv

Riverland craft beverages on show at Rivafest

 

A revitalized Rivafest will be held on the banks of the Murray River in Renmark this Saturday 14th January.

The event previously held throughout the day will take on a new time format under the stars (from 5pm until 11pm), and will provide an opportunity for visitors and locals to soak up the relaxed, laid back Riverland atmosphere, whilst  savouring the flavours of the Riverland and enjoying the entertainment.

Beer, wine, gin, ciders, expresso martinis, scotch, hard lemonade are just some of the beverages that will be available on the day, along with a huge range of food including yabby paella, Riverland tasting platters, Locally grown wattleseed Pavlova, Flat iron steak burger with Woolshed Brewery Amazon Ale marinade, goat pie, rabbit pie and more.

The Rivafest 2017 entertainment line-up includes the acoustic sounds of local duo Luke & Kassie Heuzenroeder to kick start the evening followed by 2011 X-Factor Runner-up, Andrew Wishart and Adelaide band (former locals) ‘McKenzie’.

Fireworks will also take place at 9.30pm from the river and will light up the balmy summer night sky.

“The timing of the event was brought forward to provide an opportunity for the boutique craft beverages and caterers of the Riverland to showcase their produce during the peak tourism time,” said Director of Corporate and Community Services, Tim Vonderwall. “Moving Rivafest into the cool of the evening will also enable visitors, and locals alike, to experience the Riverland by day and night.”

 

Japanese beer maker grabs Mountain Goat

Beer maker Asahi has bought Melbourne-based brewer Mountain Goat. 

This is the second Australian craft brewery bought out by the Japanese beer giant, along with Cricketer Arms, which they purchased in April 2013.

According to David Bonighton and Cam Hines, founders of Mountain Goat: “A lot has changed since 1997, back then we knew that Australian beer lovers deserved more than just bland, yellow fizzy lager, but it was so difficult to find. It’s the very reason we started the brewery.”

The pair went on to say that, “we’ve been contract partners with Asahi for three years now, and with their expert help our beer has grown in demand, expanded nationally, and found a special place with beer lovers. We are confident that with Asahi on board, we will be able to convert many more people to craft beer than we could do on our own.”

Mountain Goat will remain a stand-alone business and the brewers will continue to brew beer in Richmond.

 “We’re sticking around. We want to ensure focus remains on the beer: on its quality of course, but also to continue to innovate and collaborate with other passionate members of the craft beer community. This was a key aspect of the sale for both sides,” the founders’ said.

“We are so proud that our loyal supporters believed in us and proved us right, and we’re genuinely excited about how the Australian craft beer scene is growing.

Full details for the deal have not been disclosed at the time of reporting.

Tyrells Crisps buyout of Yarra Valley Snack Foods is a crafty move

UK premium snack brand Tyrrells Crisps has just acquired the Melbourne-based Yarra Valley Snack Foods in a move that will facilitate any attempts by the company to establish a manufacturing base in Australia.

In 2014, Lay’s (37%), Red Rock Deli (16%) and Kettle (15%) were the Top 3 players in chips in Australia, according to Euromonitor data.

Tyrrells, one of the largest producers of premium chips/crisps, reached an exclusive supply agreement with Coles and launched in Australia in 2014, so the company is not entirely new to the Australian market.

The chips/crisps category is worth over A$652 million, and represents 35% of the total value of the sweet and savoury snacks category, up from 31% five years ago despite the many advances in other (and healthier) snacking types.

The crisps/chips category has experienced 12% value growth during 2009-14, or 2% compound annual growth. In actual terms, its value growth for the period was only surpassed by extruded snacks, which are processed / reconstituted / shaped potato or cereal based snacks, such as rice cracker snacks, Pringles and Cheetos.

Tyrrells Hand Cooked English Crisps is perhaps the most well-known brand in Europe but there are many more out there, increasingly emphasising their hand-cooked potatoes and the place of origin the salt or vinegar is sourced from (eg Anglesey Sea Salt). Recently, PepsiCo has expanded into gourmet snacks through the launch of Market Deli – premium priced thick-cut crisps made from selected potato varieties bearing no sign of the company logo on the pack bar a small statement reading “from the Makers of Walkers”.

So is this emerging craft movement a fad or likely to be the next big thing in savoury snacks?

Tyrrells has grown at a 15% CAGR over 2009-2014 in the UK significantly outpacing the overall crisps’ CAGR of 5%. In Australia, Red Rock Deli from PepsiCo has outperformed the company’s flagship brand Lay’s over 2009-2014 in CAGR terms (5% vs 1%), though over the last two years sales have been falling.

The rapidly expanding craft beer movement is starting to exert an influence on the development of gourmet snacks, which are typically consumed with beer.

Borrowing from the craft beer market, crisps are becoming more sophisticated, with premium ingredients that emphasise heritage and provinciality.

Particularly in the US and the UK but also in Mexico and Russia, a growing number of beer companies are craft-branding their current line or coming up with new craft lines by acquiring small-batch brewers.

The definition of craft beer remains debated, but regardless, they are tapping in the same trend drivers. Some of the most recent examples include Immortal IPA from Elysian Brewing in the US which was acquired by A-B InBev earlier this year and Guinness Dublin Porter from Diageo which capitalises on Dublin’s brewing heritage in order to impart a sense of tradition and authenticity.  This has an obvious impact on retail sales.

Over 2009-2014, dark beer and premium lager, where craft beer is typically found, have outperformed beer overall globally, and particularly so in Latin America, North America and Australasia.  In Western Europe, growth in dark beer was undermined due to a strong decline in mass-market brands, which dominate the category.

The craft movement in beer has in turn facilitated a similar movement in crisps, particularly in the UK, where on-trade establishments have been switching from serving mainstream brands like Carlsberg beer and Walkers crisps to serving small-batch products like Brooklyn Lager with Tyrrells.