New Zealand's more than 80 craft breweries may be on the
cusp of a global explosion in popularity. ODT business
reporters Simon Hartley and Sally Rae talk to some of Otago's
oldest, and newest, micro-brewers.
An explosion in the popularity of craft beer around the world
has been forecast, with no shortage of Otago brewers to
capitalise on the expanding industry.
Whether it's Dunedin's 22-year-old Emerson's Brewery and its
1.5-million litre annual capacity, or new Oamaru start-up
Craftwork Brewery, targeting production of eight dozen
bottles from each brew day, there appears to be a solid
thirst for their unique products.
John Bennett, ANZ's general manager, central region for
commercial and agri business, believes demand for New Zealand
craft beer is expected to triple during the next decade, but
has raised concerns brewers might not be ready to capitalise
on the demand.
''The potential for exporters is enormous, up to 300% in the
next decade, but New Zealand brewers and hop growers will
need to significantly expand production if they're to take
advantage of the opportunity,'' Mr Bennett said.
The consumer move to craft beers has seen an increase of
While Asahi's purchase of Independent Liquor in mid-2011 for
$1.5 billion was a major-player headline grabber, DB
Breweries bought cider producer Redwood Cellars in 2012 for
$8.2 million, Lion got Dunedin's Emerson's for $8 million in
2012, while Independent grabbed Marlborough-based Founders
Brewery in 2013, for an undisclosed sum.
Emerson's managing director Bob King was contacted and
estimated that during the past decade craft beer demand had
''at the least tripled''.
He believed Mr Bennett's prediction for the decade could be
Emerson's has just installed four new tanks and could
increase production from 1 million litres to 1.5 million, if
required, Mr King said.
The company is still considering the possibility of
relocating its brewery, for the fourth time, across the road
from Wickliffe St in Dunedin to a large industrial site, of
about 14,000 sq m.
''Yes. There's more than enough room there to expand capacity
at that site,'' Mr King said.
While overall New Zealand beer demand was decreasing and
people spent less on beer, Mr King said craft beer's share of
the market was increasing, as was consumer expectations from
He said as with wine, ''consumers were now looking more
closely at the flavours and aroma for a sensory experience'',
while the other important driver was ''supporting local
He noted that craft brewers in Wellington were
''flourishing'' with five brewers ''dominating the market''
in the capital.
On Thusday this week, the 2014 Brewers Guild of New Zealand
Beer Awards attracted a record 670 beers, from 74 New Zealand
brewers and 10 overseas entrants. Emerson's won both the
European ale and European lager awards.
A decision on the new Emerson's site, which could be
developed for about $6 million, was expected in September.
When asked about future expansion of craft brewers, Mr King
highlighted that Emerson's, which is now owned by brewing
giant Lion, had capital for expansion at hand.
He noted Marlborough-based brewer Renaissance was looking at
crowd funding opportunities and brewer Tuatara had sold part
of its company for $5 million to raise funds.
SnowballEffect is handling the Renaissance offer and hopes to
raise about up to $700,000 by September 12; the $2 shares
amounting to 12.28% of the company.
Listed brewer Moa, which has had to overcome a disruptive
distribution issue, said in May it had more than doubled its
sales volume during the previous year and was set for a
production boost, having aligned itself with Nelson's
Moa raised $16 million in an initial public offering last
November, at $1.25 a share, to develop a new brewing
Mr King said craft brewers were not constrained by becoming
too big, noting some United States craft brands were bigger
than either of New Zealand's two largest, mainstream brewers.
The ANZ research had noted seven Otago brewers in 2013, but
the ODT found another four.
Craft beer specialist stockists, Castle MacAdam, in Dunedin's
CBD, last year won Best Otago-Southland Off Licence, awarded
by the Society of Beer Advocates.
Castle MacAdam director Darren Stedman said while stocking a
core of craft beers, there was generally stock from more than
20 breweries on offer, including the seven ''fill-your-own''
draught taps, from brewers from around the country.
''There's been huge growth and a real evolution of customers,
more knowledgeable and searching out new beers. A lot are
brewing their own,'' Mr Stedman said.
About a year ago, Phil and Tyla Scott made the move south
from Auckland, relocating Scotts Brewing Company and setting
up a new, bigger operation in North Otago, where they both
While Mr Scott laughingly described the past year as
''chaotic'', the pair had no regrets and they had ''big
plans'' for the business.
They were unsurprised by the suggestion that demand for New
Zealand craft beer could triple over the next decade and they
were prepared for it, they said.
Their brewery, in the old railway goods shed in the town's
Victorian precinct, was set up with a ''nod to expansion''
and there was ''tonnes'' of space to increase capacity if
needed, Mrs Scott said.
The brew house was four times the size of the company's
Auckland operation, and was capable of producing 5000 litres
of beer a day.
Given the business was based on production, moving south was
''not necessarily that much of a risk'' and there was an
opportunity for a better lifestyle, Mr Scott said.
While they were not sure what to expect ahead of the move,
the feedback from locals was very positive from the outset
and the opportunities started becoming clear, Mrs Scott said.
One of the most exciting aspects of the past few months had
been getting the Scotts name ''out there'' and also the
increasing number of contract brewing opportunities.
Brewers were ''coming out of the woodwork left, right and
centre'' and they kept fielding inquiries, she said.
While doing contract brewing work was an opportunity to
utilise their infrastructure, their focus was still strongly
on their own brands, they said.
Earlier this month, Oamaru craft brewers Michael O'Brien and
Lee-Ann Scotti's start-up Craftwork Brewery was profiled by
Craftwork is a collaborative brewing partnership, started in
mid-March, and works from the basement of Ms Scotti's house;
posibly the smallest legal brewery in New Zealand.
Their intention is to brew small idiosyncratic batches of
Belgian-inspired beer, with the pair cautioning their
mostly-organic beer was different.
They can produce about eight dozen bottles on each brew day,
so can only have 12 to 18 stockists, who may get just a dozen
bottles a week.
They have three Saison varieties on the market - Saison Zest,
Saison Poire and Saison Anise, and also Sharkdealers IPA and
It's Spelt Grisette, an organic Belgian-style farmhouse ale.
The organic beer is all bottle-conditioned, unpasteurised,
unfiltered and it has some yeast in the bottle, which is
Mr O'Brien said at the time: ''It's really quite difficult to
get a New Zealand-made Belgian-style beer. There aren't many
styles out there,'' he said.
Getting the Belgian-style beer to market was challenge and
the pair have been encouraged by recent success at home brew
competitions, winning home best in class and silver and
bronze awards in their first competition.
Mr Bennett, from the ANZ, said craft beer was the
fastest-growing segment of New Zealand's brewing industry,
currently at about 25% a year.
''In the US, one of New Zealand's biggest beer export
markets, demand for craft beer has grown 10% annually, while
overall [US] demand is shrinking 0.3% annually,'' he said.
Demand was also on the rise in Europe, but Asian markets,
such as China, held the most exciting prospects for New
Zealand brewers, Mr Bennett said.
Our beer there, and here
• Craft - fastest growing segment of New Zealand's brewing
industry, up about 25%.
• NZ brewery numbers up from 39 in 2007 to 96 in 2013.
• Big three - Lion, owned by Kirin. DB Breweries, subsidiary
of Heineken. Independent Liquor, owned by Asahi.
• NZ craft beer 2% of annual sales; 10% if Lion, DB and
Independent craft brands included.
• Beers with more than 5% alcohol volume; consumption rising.
• NZ beer consumption down 10.2% since 2008, from 322 million
litres to 289 million litres (2013).
• 10 hop varieties grown in NZ, but global shortage 2011-12.
High US demand creating domestic shortages.
• Prediction - craft export production expected up 300%, next
• US craft beer demand grows 10% annually.
• US one of NZ's biggest markets, demand rising Europe,
followed by China and other Asian markets.
- Source: ANZ
• Bannockburn Brewing Company
• Berriman's Cider Company
• Craftwork Brewery
• Emerson's Brewery
• Green Man Brewery
• Jabberwocky Brewery
• Queenstown Brewers
• Scotts Brewing Company
• Steamer Basin
• Velvet Worm Brewery
• Wanaka Beerworks