Small NZ craft breweries sold beer faster than they could make it in 2016, report finds

Smaller operations accounted for 10% of the value of New Zealand's beer consumption in 2016.

New Zealand's growing number of boutique craft breweries sold beer faster than they produced it in 2016 and now account for more than a tenth of the country's beer market, an ANZ Bank New Zealand industry specific report shows.

Of the 194 craft breweries in New Zealand, about 130 were deemed to be small operations in the annual ANZ industry insight report, up from 111 minnows a year earlier. Those smaller operations accounted for 10 percent of the value of New Zealand's beer consumption in 2016, up from 8.5 percent in 2015, and accounted for 5.7 percent of total consumer by volume, also higher at 4.9 percent. Smaller breweries boosted production 22 percent in the year while boosting revenue 32 percent, with the pace of growth slowing on both measures from 28 percent and 39 percent respectively in 2015.

"Small breweries have become a big business. New brands are appearing all the time and together the industry is changing the way many New Zealanders think about and consume beer," ANZ central region commercial & agri general manager John Bennett said in a statement. "I am confident we will continue to see growth, but brewers need to be smart about how they sell their product - it is about more than just good beer."

The growing demand for craft beer has seen the country's dominant brewers - Kirin-owned Lion (Beer, Spirits and Wine) New Zealand and Heineken's DB Breweries - raid their boutique rivals, most recently with DB's purchase of Tuatara Brewing Co and Lion's $25 million Panhead acquisition. Last week Lion said Panhead's first-half production was up 76 percent, continuing what it described as an "impressive growth trajectory," and the trebling of brewing capacity paved the way for expansion in both domestic and international markets.

ANZ's Bennett said exporting craft beer still challenged the wider industry, staying static at about 10 percent of production. The report said while it offered the opportunity to grow "exponentially", it also needed "a big investment of time and resources".

(BusinessDesk)

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