Passion, innovation, and hard work

The nation's craft beer fanatics will be crying into their pilsners and pale ales at news that another of New Zealand's most popular brands has been snapped up by a global giant. But yesterday's announcement that DB Breweries, a subsidiary of Dutch giant Heineken, has purchased industry darling Tuatara shines a spotlight on a huge and surprisingly positive shift in the way Kiwis are consuming beer.

While binge drinking remains a serious issue, the statistics suggest we have come a long way from the days of the 6 o'clock swill. As unlikely as it might feel to those with sore heads after a sunny, long weekend of cricket and music festivals, New Zealanders are becoming increasingly sophisticated in their beer consumption.

An ANZ report into the craft beer sector last year found that consumption was growing at an annual rate of 35 per cent a year. But total beer consumption was flat for the year, having already fallen 12 per cent since 2008. Craft beer now represents 15 per cent of the total beer market, up from 9 per cent three years ago. By comparison, the category represents 12 per cent of total beer consumption in the US market. In short, New Zealanders have embraced the craft beer craze which is sweeping the world. The major breweries have certainly recognised they need to get a slice of that growth.

From a business point of view, it is hard to begrudge the success of those who have done deals with the corporate players. Breweries such as Tuatara and Panhead, which was bought by Lion last year in a similar deal, are classic Kiwi start-ups built on passion, innovation, hard work and some savvy guerrilla marketing.

After creating a popular product, they inevitably face big challenges scaling up to a size that allows their owner-operators room to breathe. It is a familiar story for many New Zealand businesses and in the technology sector the issue of foreign buyouts has long been the focus of intense debate.

From an economic point of view, New Zealand needs businesses which can create skilled jobs.

Craft beer production fits that bill as much as for the intensive marketing, brand management and clever design involved as for the brewing itself.

Positioned at the premium end of the market, craft beer at scale presents the most likely avenue for export earnings in a sector which has long been left in the wine industry's wake.

Both DB and Lion have been careful to reassure drinkers that they will retain original brewing staff and make no changes to the recipe. Big brewery ownership will mean more quality beers on tap in pubs and bars along with increased shelf space and better deals at the supermarket. Whether they can hold on to the feel-good factor that small brewers create for their brands remains to be seen.

But those who believe that real craft beer means independent ownership can take heart that New Zealand has more than its fair share waiting in the wings. There are now more than 1500 unique craft beers on the market in New Zealand. In fact, with nearly 168 craft breweries, according to the ANZ research, we have nearly three times as many per capita than the United States. It seems safe to raise a glass to Tuatara's success.