Big brewers on the hops for craft beer
THE thirsty giants of the Australian beer industry are expected to cast their eyes over more independent craft brewers, as changing tastes continue to put fizz in the sector despite the devastating impact of the coronavirus pandemic.
Multinationals Lion and Carlton United Breweries have picked up a number of leading independent craft brewers over the last few years, adding a creative and diverse product range to their offering.
Lion paid more than $500m last year for Australia’s largest independent craft brewer, the Byron Bay-based Fermentum, parent to Stone & Wood, Two Birds and Fixation.
Independent Brewers Association general manager Kylie Lethbridge said the transaction was “the big news of 2021”.
“It certainly put a ripple through the industry, but it’s very difficult to predict what will happen this year because we’re not privy to the strategies of the multinationals,” Ms Lethbridge said.
“But we do know that they’re going hell for leather to diversify and I don’t doubt that over time more independent craft breweries will be purchased.”
Over the last decade, independent craft breweries like Little Creatures, Mountain Goat, Pirate Life, 4 Pines, Green Beacon, Balter and Feral Brewing and many more have been sold to the big two and other large groups including soft drink manufacturers like CocaCola Amatil.
Big-brand bottle shops owned by Coles and Woolworths are also creating their own craft-style beer to cater for growing demand.
Lion would not be drawn on whether it was seeking new acquisitions.
Queensland University of Technology retail expert Professor Gary Mortimer said craft beer was “going corporate” and he expected more independent brewers to be bought out by multinationals and larger companies.
“Mainstream beer consumption is falling and craft beer consumption is rising …” Professor Mortimer said.
“If we go back to the ’70s it was all about XXXX and VB and volume consumption. There was a lot of heavy drinking.
“Now we’re preferring craft beers. Australian beer drinkers’ tastes have changed.”
Australia has about 625 independent craft breweries, ranging from the largest – Young Henrys Brewing in Newtown, Sydney and Gage Roads Brewing Company in WA – to microbreweries.
According to a 2020 survey, the sector contributes almost $2bn annually to the national economy and directly employs about 7000 people or 50 per cent of jobs in the sector despite accounting for about 8 per cent market share
While Australian beer consumption per capita has fallen 20 per cent in the last decade, the survey found independent craft beer sector market share was growing at 15 to 20 per cent a year.
Ms Lethbridge said did not know of any IBA members who had to close their doors because of Covid-19 and not reopen, but said the pandemic had made business a struggle, especially those with a tap bar or restaurant component.