A Very Good Week in Beer
Last week was indeed a very good week in the world of craft beer and I well and truly immersed myself in the celebrations! Yep “Good Beer Week” had so much going on that it was hard to keep up. With 9 days (a true brewers week) of specialty intimate events, the CBIA Craft Brewers Conference, the Australian International Beer Awards and finishing off with GABS. It was a week that well and truly positioned Melbourne as the hub of craft beer in the Southern Hemisphere and a top 5 global craft beer destination.
This year Bonney Creative sponsored the CBIA’s 2015 Craft Brewers Conference by creating a new identity system and rolling it out across all manner of printed communication from program guides to t-shirts , glassware and everything in between. Attending the 2 day conference was not only a home-brewers dream but provided me with a wonderful opportunity to hook up with many of the industries colourful identities to chat about all things brand, brewing and the industry in general.
I had the luxury of sitting in on many a good presentation and these started with Steve Hindy from Brooklyn Brewery who delivered the keynote speech making observations and comparisons between the Australian and USA markets. There is much to learn from the advanced US market as to the potential of our own craft category but there are some key differences, especially looking at who produces the current volume (within craft), the percentages of independent ownership and what this means for the small guys.
The Australian market is poised for great growth, however the most significant point I took away from the conference was how and who would take up the projected volume growth. Currently the category leaders plus private label offerings represents a massive percentage of the overall craft segment – unlike the US market. The next volume tier would be the 4 or 5 larger independently owned breweries then followed by around 200 small-scale players. If we assume all these breweries roughly grow at the same rate as the category, then it is projected that the 200+ small breweries need to produce approximately 60 million more litres by 2020. Awesome opportunity! However this does require approximately $1 per litre of investment to fund, so the small guys need to build strong businesses that are capable of sourcing the capital to fund their growth. If they don’t, corporate craft beer has both the capital and capacity to take up even more share, especially with the decline of their mainstream offerings.
The second aspect to all of this, which seems to be a little lost on many of the small guys is that growth can only come from building their brands, not just by ordering more fermenters. Access to funding is great, however as industry pioneer Phil Sexton puts it, “its easy to make beer, its just hard to sell it.” In a discussion with one of Australia’s leading independently owned craft breweries, sales, marketing & production should theoretically each account for a third of your investment dollar to building a strong & profitable brand. And they should know, the proof is well and truly in their Pacific pudding.
Part of our role as brand builders is to assist in educating the smaller start-up breweries in the fundamentals of creating brands that sell. These smaller newcomers to the industry typically come from a place of brewing passion and functional process skills but often require broader expertise in sales and marketing. With already some 250 breweries in Australia we are on par with the US brewery per capita ratio, its just that so many of ours produce minuscule volumes and the bulk is produced by the big empires. So the great news is the category is poised for substantial growth, the watch out is that the majority of this could easily be swallowed up by corporate beer if the small craft players don’t invest in building their brands.
As a brand designer, an all grain home brewer and an avid consumer, I’d like to think the craft category can achieve its vision of 10% by 2020 and then well beyond. If the success of GABS is anything to go by, there is a world of flavour and potential on offer and wouldn’t it be great to see more of it in more peoples hands, well at least outside of Collingwood and the like! Drink local, drink fresh everybody.