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Industry Insights: Craft boom brings growth and challenges

Martin Craig.

Craft beer continues to grow in New Zealand, both in sales and in production, and this rapid growth brings unique challenges as the industry matures.

New Zealand’s small independent brewers’ combined output has more than doubled since the boom began in 2012. Then they produced 7.5 million litres of beer – last year they produced 17 million litres, enough to make up 6% market share by volume.

The number of small independent breweries operating in New Zealand was pretty stable from 2001 to 2011, at around 60 breweries. Since 2012 the number of independents has doubled to 130 operating last year. That figure is simply for production breweries and doesn’t include the growing number of contract beer brands also trading.

It’s impressive growth and few other consumer sectors have doubled in numbers in such a short time.

To give a bit of perspective, beer sales overall have been falling ever since the late 1970s. New Zealand has never seen anything like this current growth period, and small independent brewers have revitalised beer sales and introduced new consumers who the major brewers were not able to attract.

But this boom also brings challenges, because increasing brewery numbers bring increasing competition too. We’ve all seen the expansion of the craft beer category – new taps, dedicated craft beer venues, increased shelf space in off-licences and supermarkets.

The growth in small brewery numbers shows that most of the industry’s expansion has come from new entrants. The growth in volume is coming primarily from these new players, rather than from small breweries getting bigger.

This is in a commercial environment that faces its own restrictions from the Sale and Supply of Alcohol Act and other regulations.

The Brewers Guild’s role is to continue to work with brewers big and small, to ensure Government and other officials see the economic and social benefits of enjoying a well-crafted local beer with friends and family, and allow this boom to thrive.

 

Martin Craig is a beer writer, journalist and publisher of www.Beertown.NZ