New Zealand Brewing 5.0 – the takeover years

By BeertownNZ Thu, 29 Sep 2016 National

Guest writer Neil McInnes believes New Zealand brewing has entered a new phase in its history.

Just after walking in to this year’s Beervana I was accosted twice by different friends who both reckoned that Tuatara Brewery had been bought out by Lion Nathan. This near-hysterical assertion was based on the fact that the craft beers on a Liqour King poster at the stadium were Emerson’s, Panhead, Mac’s...and Tuatara! Thus putting two and two together they had come up with five.

This antipathy to craft brewer takeovers has its roots in the bland ‘NZ draught’ beer culture promoted by our major brewers in the 1970s and 80s. The scars of this era are still raw for my generation, who learned to drink beer during this time. 

For my part I also have form here, as the first beer article I wrote in 1993 praised the rise of craft beer as bringing in flavour and variety to the beer industry dominated by big brewers intent on market control and exploitation of the drinker.

Fast forward 20-odd years, and the explosion of craft beers here and overseas has led to major changes amongst the major brewing concerns in Godzone. In addition to their traditional range of ‘jug and pony’ beers and premium international lagers, the larger brewers have updated second tier beer lines (like Macs and Monteiths) providing craft beer styles, faux craft beers (like Hancocks) presented in craft beer packaging, and beers from craft brewer takeovers (like Founders and Black Dog). 

The big boys of kiwi brewing now have a wide range of different, high-quality beers on offer and they are using craft beer values to freshen up their market pitch. So what’s the problem?

There are lingering doubts about whether the craft brewers being taken over will be able to maintain the integrity of their beers and that accountant-driven production decisions will lead to a blanding-out of the product. Something which many of us feel happened to Monteith’s after its brewing was shifted to Auckland from Greymouth and what initially happened to Mac’s after being bought out by Lion Nathan. 

I am not sure this will happen again. The investment in purchasing these new craft brewers is significant. The risk of them becoming a label of faded glory is too high in today’s increasingly sophisticated and social media-savvy beer market. There are also positive marketing spillovers for sales of the big brewer’s traditional range at pubs offering craft beers. 

Moreover there’s money to be made from the relatively high craft beer price point and if you can sustain its quality while improving production efficiencies, there’ll be gold in them thar margins. 

So putting two and two together means its highly likely there will be more craft brewer takeovers and other market arrangements (like the Moa-ParrotDog distribution deal) to come. If that means the quality, range and flavour of beers on offer around New Zealand can be increased and sustained, that’s got to be a good thing.

Why NZ Brewing 5.0?

1st phase – many breweries in colonial times 

2nd phase - consolidation into DB and Lion

3rd phase – Macs and 1st craft beer generation (micro brewers)

4th phase – craft brewing explosion and creation of larger craft breweries (Moa, Tuatara etc)

5th phase – craft beer takeovers by majors

 

By BeertownNZ Thu, 29 Sep 2016 National