# Australian craft beer makers are at bursting point. So where to next?



## Malted Mick (16/7/21)

From 19 breweries to 600, Australian craft beer makers are at bursting point. So where to next?


As craft beer overruns local shelves with countless brands and increasingly wacky flavours, experts believe tax relief available from this month will open the way for specialised venues rather than more labels at the bottle-o.




www.abc.net.au


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## Hangover68 (17/7/21)

Maybe if their prices were realistic people might buy them.


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## bkmad (17/7/21)

Would probably help if they made something other than generic APAs, XPA's etc.


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## Grmblz (17/7/21)

bkmad said:


> Would probably help if they made something other than generic APAs, XPA's etc.


They do! Three x 500ml cans of Imperial stout, various strengths 10.5 to 13 abv, $75, Oh but you get a free glass in the box (Dan's)
Excise accounts for some of it, ingredients might be an issue (raspberries are quite expensive) but overall I'm with Hangover, $50 per L = $950 for a cornie of RIS, REALLY! the excise isn't that much, and there aint no raspberries in it, sure bourbon barrel aging etc, etc might be a thing although I just chuck a still spirits essence in the keg, try it before howling, and don't think the big boys never use flavourings, Youngs double choc stout? Well now you know how, oops got a bit sidetracked, it's a bit like a loaf of artisan bread for $10, if you can't make it yourself but want it, well that's the price, the new fangled artisan beer is no different, a thing is worth what someone will pay for it, we're (some of us) lucky enough to be able to make whatever we want at a fraction of the commercial price, and my Belgians may not be quite as good as the real thing, but at less than a tenth of the price I can live with that.


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## MHB (18/7/21)

If you take a long hard look at the costs of running a small brewery it will be pretty obvious why very few small brewers drive flash cars!

OK the excise changes will help over time but it won’t affect costs like rent, labour (L/man/year is a key brewery costing), energy, plant and equipment, all of which are probably going to cost more than malt and hops. Have seen a costing that had the waste disposal costs higher than malt (that needed fixing).

If you want small batch high quality anything you are going to pay. I think most of us buy the occasional handmade Coffee for around $5, given that there are about 110 shots in a kg of ground and say your coffee shop is paying $30/kg for their beans, your double shot espresso has less than 60 cents worth of coffee in it.
Does that make all coffee shops robbing bastards?

Pretty much the same with small brewing, just looking at the cost of ingredients would be a very fast way to go broke.
Mark


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## yankinoz (18/7/21)

bkmad said:


> Would probably help if they made something other than generic APAs, XPA's etc.


They do. Once COVID lets up, go to the premises to find them. True, Dan's and First Choice carry but a few exceptions to your generalisation. The breweries vary. Some brewers offer a bold array of IPAs, NEIPAs, saisons, imperial stouts, dunkels, dubbels, sour beers and whatever. On the other hand, one in Geelong that I visited recently was worse than what you say. About three-quarters of the offerings they had in stock were either hard fruit drinks or fruit-flavoured beer.


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## Hangover68 (18/7/21)

Up to $7.50 for a 330ml bottle or can is a rip, and yes coffee is also a rip off but coffee is made in front of you by 1 or 2 people not in 10,000 ltr batches.


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## MHB (18/7/21)

Espresso machines don’t cost half a million dollars, storing beer until its finished fermenting and maturing takes longer...

No point in arguing with a tight arse. Try thinking it through.
Mark


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## bkmad (18/7/21)

Yeah I know they do make other beers, but as others have alluded to, you often have to go to the brewery to get them. Most of the selection of craft beer in my country town is apa, xpa and ipa. I like all those just fine but it would be nice to see something a bit different every now and then. For example, today I felt like an amber ale. Only one I could find in the local dans was MG fancy pants. Its a good beer, no complaints, but it was the only one there. Meanwhile, I had probably 20 XPA's to choose from. I get it, thats what is currently popular and sells.
Its a big part of why I brew my own. Being able to brew different hard to get styles is great. Would also be great to occasionally buy an example of those styles. E.g I've just brewed my first altbier. Tastes nice. No idea if its what an altbier is supposed to taste like though.


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## Grmblz (18/7/21)

Agree with Mark about the coffee and capital costs associated with breweries, so we're not comparing apples with apples, however I recently had a birthday and as a bit of a treat to myself I went into Dan's, being a stout lover but with an eclectic palate I grabbed six stouts that I'd never tried before, here's the rub, Boatrocker $5.99 6.1%abv, Philter $9.99 7%abv, Capital First Tracks Imperial $8.50 10.5%abv, now for anyone familiar with excise the assumption would be that Capital would be the most expensive by a country mile, so what's going on? fwiw Moon Dog "Cakehole" a black forest cake stout $6.09 6.5%abv was the absolute standout (for me) again given the grain/ingredients bill of this beer it should have been near the top regards cost, and yet it isn't? I quite like Bentspokes Descent 21 but $12 10%abv??? 

As part of my b'day I went to Capital brewery in Canberra, what a complete waste of a 2 1/2 hr drive (stayed overnight) as bk says, 25 bloody taps and only 3 none IPA of some description, yeah a Neipa is still an IPA, as is a West coast/East coast/dark side of the moon coast, bloody hell they even had 2 wines on tap.

Exactly how much of Descent 21's $12 is beer, and how much of it is the "Bentspoke" award winning name? 

I think I'll stand by my assertion that a thing is worth what someone is willing to pay for it,


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## JDW81 (19/7/21)

Definitely not comparing apples to apples when looking at coffee vs beer.

I knew a guy who ran a coffee only joint right near the train station, made a fortune working Monday to Friday And selling coffee (with the odd pastry/sandwich here and there). 

The only “pro” brewers I know are a couple of lads who do it as a side hustle/as a bit of fun. They barely break even, despite not being able to keep up with demand (well at least before COVID) and don’t have the extra cost of having to buy the equipment and pay for a brewing premises (they rent another brewery’s gear when they make a batch). 

I’ve been buying more beer the last 18 months due to a forced hiatus from brewing. Despite having a few good bottle shops around me, I do find it frustrating that >90% of the Australian “craft” offerings are either poorly made sours, APAs/XPAs/DIPAs (of varying quality). It’s fine when it’s the middle of summer, but come winter I’d love to have a few dark options that aren’t some flavoured stout which is >7%. No one seems to be making sessionable dark ales/dry stouts (at least that I can find locally). 

JD


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## mynameisrodney (19/7/21)

Costs aside, another side effect of this has been a decrease in range for established styles. Trying to get a Belgian beer at any of my local bottle shops is impossible now as the shelf space has been allocated to pineapple cream explosion beers or whatever the flavour of the month is.


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## MHB (19/7/21)

I work part time at a small brewery, so this is as you can imagine a subject close to where I live.
I'm pretty proud of the tap Black we offer and am very pleased that it’s our #2 by volume and not all that far behind the obligatory APA in sales.
Agree would love to see a much more interesting range of beers available both on tap and in package. Part of the problem is that if you aren’t offering what people expect they won’t come back, right now that's lots of hops and sours. Over the last year or so (Covid) I think nearly every small brewer has brought themselves a canning machine and tried to get product into bottle shops (remember that it’s the marketing team at the bottle shop that have the biggest say as to what gets shelf space - not the brewer). So yes we are seeing a real scrum of small brewers trying to get bottle shop sales. Leads to some garish labelling and in my opinion a very distorted market. I'm very happy not to have to be playing in that game, over 90% of our sales are on site over the bar.

For Belgian beers I go to a specialist (plug for a mate, IBC), have had very few Australian made sours that stand up and some (too many) that are real shockers. Sadly that applies to more than a few other beers to. There are some really good brewers out there sadly a lot of brewers that aren’t all that good. This is where I think we will see the biggest change over the next couple of years.
A lot of small brewers will go broke, those making good beer will I hope survive and grow, those not up to snuff will wither, sad but true and perhaps overdue.

I could babble on about the future of small brewing in Oz for hours, it’s a subject I'm pretty passionate about. Just remember that price isn’t all that important in the big picture, find brewers making good beer and support them. Went for lunch and a drink with some friends yesterday, if the beer was a couple of dollars cheaper I couldn’t have had any more and drive home and the extra couple of dollars spent drinking beer I really enjoyed is worth it to me!
Mark


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## thesocialbrewers (20/7/21)

Ok, so let's get this out there - the bottle shops you're quoting stock products based on popularity and ability to shift high volume. The beers you're looking for are not mass consumption products. The majority want beers that taste like the beers they're used to. The other end of the market, craft beer thrill seekers, want barrel aged choc ripple apple fizz milk fudge Sunday stouts. These are the two easily defined and profitable market segments that it's worthwhile for big chain bottle shops and breweries to cater to.

I am about to open a small (nano) brewery and I'll be making beers that cater to the largest possible audience. I didn't start out with a plan to make a hazy ipa or neipa, but I will. Because that's what sells right now. 

I can also tell you that the $9-$13 cans you're quoting are mainly from breweries producing beer in a way that means they can't reach the economies of scale of the really big guys (assuming your frame of reference for what represents a "fair" price is based on big commercial brand prices). That scale is eye watering - we're talking 40m litres p.a. plus compared to, in some cases less than a million.


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## mynameisrodney (20/7/21)

thesocialbrewers said:


> Ok, so let's get this out there - the bottle shops you're quoting stock products based on popularity and ability to shift high volume. The beers you're looking for are not mass consumption products. The majority want beers that taste like the beers they're used to. The other end of the market, craft beer thrill seekers, want barrel aged choc ripple apple fizz milk fudge Sunday stouts. These are the two easily defined and profitable market segments that it's worthwhile for big chain bottle shops and breweries to cater to.



I understand the reason behind it, just voicing my opinion that the range was better 5 years ago. This is obviously based on my own tastes and the bottle shops which are nearby to me. 

I completely understand the higher price, and if I see something I think I'll like I happily pay it. Stuff that's >$80 a case is out of reach for most people as an 'every day' beer though, it's just not affordable. In reality I rarely buy cases at all anymore though as I've been brewing way more in the last 18 months.


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## thesocialbrewers (20/7/21)

mynameisrodney said:


> I understand the reason behind it, just voicing my opinion that the range was better 5 years ago. This is obviously based on my own tastes and the bottle shops which are nearby to me.
> 
> I'd have to agree that while we have more choice in terms of who males the beer we drink, we've got less in terms of style. I guess all we can do is buy those rare styles as and when we see them. I'm planning on brewing a few more traditional styles, but if they don't get supported at the tap (or on the shelf) I'll have to prioritise the commercial reality over my preference to make these beers...
> 
> I completely understand the higher price, and if I see something I think I'll like I happily pay it. Stuff that's >$80 a case is out of reach for most people as an 'every day' beer though, it's just not affordable. In reality I rarely buy cases at all anymore though as I've been brewing way more in the last 18 months.



Agree on this too. My case purchasing is almost non existent. When I buy it's usually a 4 pack and sometimes it's 4 mixed singles. Partially to avoid buyers remorse if it turns out to be something I hate.


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## Roosterboy (21/7/21)

Grmblz said:


> They do! Three x 500ml cans of Imperial stout, various strengths 10.5 to 13 abv, $75, Oh but you get a free glass in the box (Dan's)
> Excise accounts for some of it, ingredients might be an issue (raspberries are quite expensive) but overall I'm with Hangover, $50 per L = $950 for a cornie of RIS, REALLY! the excise isn't that much, and there aint no raspberries in it, sure bourbon barrel aging etc, etc might be a thing although I just chuck a still spirits essence in the keg, try it before howling, and don't think the big boys never use flavourings, Youngs double choc stout? Well now you know how, oops got a bit sidetracked, it's a bit like a loaf of artisan bread for $10, if you can't make it yourself but want it, well that's the price, the new fangled artisan beer is no different, a thing is worth what someone will pay for it, we're (some of us) lucky enough to be able to make whatever we want at a fraction of the commercial price, and my Belgians may not be quite as good as the real thing, but at less than a tenth of the price I can live with that.


I understand the price is a problem and it could be the thing that kicks the craft beer industry in the ass in the end BUT as someone who has just opened a small brewery, I think I'm qualified to speak on this. First there are alot of variables eg rent, however that can be offset by the fact higher rent normally means higher walk through traffic so higher sales and less shipping costs. Start up costs including rent for at least a year with no income coming in and all the stainless, water treatment , storage, software , legal costs etc... so large debt, for most that means more than $200K , probably more than $500K in cities. Ingredients depend on economies of scale but with the very hoppy beers comes a very high cost if your using real hops. Excise for high ABV beers is significant ( there is a reason the big players sell
most beers that are under 5% abv).

So to cut a long story short , say a 330 mL bottle or can of beer costs a brewery $ 2.50 to sell (that's cheap), so add their margin , add GST.
Now comes the interesting part, if you want your product sold at bars, pubs, bottle shops and trendy outlets, add their margin, because of the whole "gentrification of beer" phenomenon (which is good)
they may add a significant margin. Now the brewery ups its scale of production as it grows and more
and more is sold as cans and bottles. But they can't sell that increased volume through their own retail
outlet at the brewery.
So the brewery isn't getting that retail price because they are selling more wholesale (although they do get it at their own bar at the brewery).


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## Grmblz (21/7/21)

@Roosterboy Congratulations, and I wish you every success.

The point I was trying to make is there seems to be no correlation between the price, and what is actually in the can/bottle, obviously breweries will have different costs, and markups but how do you justify $25 for a can of stout made in downtown Oz when you can get a bottle of monk goodness shipped halfway round the world for less? Not comparing apples with apples? Ok how about: Philter Stout $9.99 7%abv, Capital First Tracks Imperial $8.50 10.5%abv?

Agreeing with Mark, I too think the market has become "very distorted" but fads come and go, everything old will be new again, and the majority of the current players will go belly up either because they fail to stay with the times or just produce shit beer. Unlike Mark I actually like the "garish labelling" some of it is quite clever imo, and I enjoy wandering around Murph's occasionally just to have a look. 

This isn't the first time that super hoppy pale ales have been popular, and the pendulum will swing, I just wonder what the next "big thing" will be?


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## MHB (21/7/21)

Grmblz said:


> @Roosterboy
> Sinp
> This isn't the first time that super hoppy pale ales have been popular, and the pendulum will swing, I just wonder what the next "big thing" will be?


Being able to predict that would be worth a lot of money! 
Mark


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## Grmblz (21/7/21)

Well shock horror, it looks like the whole alcohol free beverage movement is gaining speed, if I owned a brew pub I think a couple of offerings as an insurance policy might be called for, and of course keep an eye on what is happening in the US, we do seem to slavishly follow their lead unfortunately.


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## mynameisrodney (21/7/21)

Sooo, hard seltzers?


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## Grmblz (21/7/21)

Aaaaargh!
Hang on, on second thoughts, if we take the latest craze of 0% alcohol, mix it with the hard seltzer phenomenon.
MY GOD! I've got it, the next big thing is going to be Soda Water!!! 
Wrap it up in a fancy can (200ml, keeps em coming back for more) and charge an exorbitant amount of money which keeps the tossers, and posers happy, whilst leaving normal folks alone, and unharmed. Shoulda been in marketin.


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## Hangover68 (21/7/21)

Soda water then hop the shit out of it, winner.


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## dkril (21/7/21)

Hangover68 said:


> Soda water then hop the shit out of it, winner.


Bitter fizzy water.

Sounds like alcohol free beer.


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## onemorecell (22/7/21)

Grmblz said:


> The point I was trying to make is there seems to be no correlation between the price, and what is actually in the can/bottle, obviously breweries will have different costs, and markups but how do you justify $25 for a can of stout made in downtown Oz when you can get a bottle of monk goodness shipped halfway round the world for less? Not comparing apples with apples? Ok how about: Philter Stout $9.99 7%abv, Capital First Tracks Imperial $8.50 10.5%abv?



Just anecdotally, Capital First Tracks ($9) was a good beer, but it had absolutely nothing on Deeds Once More Into The Fray ($28)
Best thing to do when buying good, expensive beer is to completely ignore the cost... hype boys are too ******* expensive if you are going to look at the price.


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## philrob (22/7/21)

I rarely buy commercial beer of any sort, as I'm quite happy with what I brew and consider to be a reasonable slurp of my one longneck each day.
Once a year I lash out and buy a bottle Rodenbach.
Yeah, I know, I'm the last of the big spenders, but when you are retired and living on solely your own resources with no Gumment help whatsoever (they think I'm too rich), you need to be just a little bit careful.


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## yankinoz (23/7/21)

Hangover68 said:


> Soda water then hop the shit out of it, winner.



Hangover, there may be an organisation, Hopaholics Anonymous, that can help you. I've heard you sprinkle Citra pellets on eggs and stuff a roast chicken with Galaxy flowers.


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## Roosterboy (23/7/21)

Grmblz said:


> Aaaaargh!
> Hang on, on second thoughts, if we take the latest craze of 0% alcohol, mix it with the hard seltzer phenomenon.
> MY GOD! I've got it, the next big thing is going to be Soda Water!!!
> Wrap it up in a fancy can (200ml, keeps em coming back for more) and charge an exorbitant amount of money which keeps the tossers, and posers happy, whilst leaving normal folks alone, and unharmed. Shoulda been in marketin.


From the many surveys that have been done on drinkers and 0 % alcohol beer, there is not a significant market for it. I think the many bits on social media and even print media are part of a campaign by some of the big companies to make 0 % abv beer trendy. By saying it is enough times it becomes real. Nothing new, the beer industry is like many industries with marketing people using the old - " if you can't dazzle them with brillance(or flavour) baffle them with bullsh.t" 
I think there will be a tipping point for brewery numbers and history has shown us this before. Many have started up just to sell up, not that this is wrong. Many add-on businesses who want their piece of the pie and the pie is getting bigger at the moment but it won't for ever.


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## Hangover68 (23/7/21)

yankinoz said:


> Hangover, there may be an organisation, Hopaholics Anonymous, that can help you. I've heard you sprinkle Citra pellets on eggs and stuff a roast chicken with Galaxy flowers.



Maybe, that was totally facetious by the way. They can keep their over hopped swill .


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## Bob65 (23/7/21)

My perspective.

I make beer cans for a living and have done so for 20 years.

A few of the craft breweries are still going as strong as ever. 
The majority have dropped off a little bit, but are still going. 
Some have dropped right off, but I haven't heard of any of our customers going under (not that anyone would tell me anyway)


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## JDW81 (24/7/21)

yankinoz said:


> Hangover, there may be an organisation, Hopaholics Anonymous, that can help you. I've heard you sprinkle Citra pellets on eggs and stuff a roast chicken with Galaxy flowers.



Slightly OT:

Speaking of hops with food, I had a particularly lovely meal a few years ago at a restaurant somewhere in country Victoria (can't remember if it was up around the snowfields or Daylesford way), which was slow cooked lamb neck with a hop jelly in place of mint jelly. It was most excellent. 

JD


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## MashBasher (25/7/21)

So, do you know how to make a million dollars out of a brewery?

Spend 10 million.


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