From hipster haven to a fully fledged, high growth market segment, there are now 605 craft brewers / breweries in Australia at time of writing, and growing at about 20% per annum. That rate of growth means that craft brewers - the real ones - are stealing a ton of business from big beer conglomerates. Of course big beer owns many craft beer breweries too, but it is the micro brewery industry that is really redefining responsible and sustainable beer business practices and that's what's driving business and consumer change.The overall beer industry might not be bright green as yet, but there are hints of sage and notes of peppermint peaking through. Beer is the world’s most popular alcoholic beverage by a long way – claiming almost 75% of the global alcoholic drink market. The beer drinking landscape however is changing, and quite rapidly. Australian Bureau of Statistics figures paint a grim picture for big brewers like Lion and Carlton & United Breweries with mainstream beer consumption at 68-year lows. In an added twist, while big brewer beer consumption is down, overall alcohol consumption revenues are up because consumer preferences have not only shifted to premium and craft beers, but consumers are also drinking more cider and spirits, which all cost more. Beer is a big deal economically. The entire beer industry, from production to sales, accounts for just over 1% of Australia’s GDP. The beer industry employs around 105,000 Australians and 95% of beer made in Australia is consumed on our shores (a fair amount of which is misleadingly labelled 'imported'), which means most of what we are drinking has relatively low beer miles attached. The rapid growth of local craft brewers means an increasing opportunity for consumers to drink beer where it's actually made and that gives a huge quality control and carbon footprint edge over the big breweries who transport their product to the corners of this vast country on trucks and trains. Many breweries are also integrated into their communities the way pubs used to be, but the values are quite different.
Craft beer is simply made in a traditional or non-mechanized way by a small brewery. The definition gets confusing because the big brewers own and make hundreds of brands of craft beer, some of which are really craft and some of which are faux craft and not made in a small brewery, but have labels made by central marketing. But at the same time, just because a beer is an excellent craft beer, does not mean it's been brewed by an independent brewer, and big beer does have a stable of small breweries, usually those acquired.
The Independent Brewers Association has sought to differentiate the smaller brewers and defines an independent brewer as those:
Independent, local, craft beer makers focus on is making a very local product for a very local audience, weaving sustainability into their practices and a high level of experimentation with beer styles and flavours. They use premium quality raw materials and advanced brewing techniques and that is what is seeing a major chunk of beer consumers successfully diverted to the independent segment from mainstream beer. These small breweries are leading a high growth, full-bodied and vibrant beer scene in Australia and for the past 3 years, one independent brewery has been opening, on average every six days.
The mega-merge of beer giants In Bev Anheuser Busch and SABMiller created the AB Inbev, employing about 186,000 people worldwide and housing over 500 brands of beer. Large entities are merging for a variety of reasons, including streamlining processes, but they are also constantly acquiring small breweries for their stable - like 4 Pines below, now owned by AB InBev.
Micro brewery sales are increasingly common and while that's good news for the start ups who sell well, there is always the question of how they will be integrated into the big business machine and that impact on ingredients, social responsibility and quality - ultimately impacting consumer choice. It's an issue amongst many independents who track sales and ownership diligently and report on it. You can find others on Wikipedia. Consumers will vote with their wallets and social media, and if you are consuming beer from a green brewery, whoever owns it and whoever benefited from it's existence, the planet is better off. So choose taste and your own values, but do your research as it's not so easy to work out.
More than 85% of the Australian beer market is held by multinationals, and AB Inbev is in control, holding a whopping 80% slab of all beer sales. A recent trend, in addition to acquiring real micro breweries, is for big beer to create their own ‘faux’ craft beer brands.Big beer don’t often sing about the association with faux brands as they seek to quarantine them as the whole point is to keep branding aligned with the craft beer ethos and artisanal style favour.According to Beer Cartell, the majority of craft beer consumers (62%) declare that they do want to know who made their beer and only 20% say they would buy a craft beer if they knew it was made by a big brewer. The thing is that it's often hard to tell who owns who, what's legit and what's just a brand.
At the same time, some of the little guys are becoming big guys. At least one small brewery has literally hit the beer jackpot and instead of selling out, has floated. Australian ASX-listed beer company Broo Ltd is a stellar example of an independent beer’s ascension and how a small craft operation can get big enough to rewrite the rules of brewing on their own terms.Broo’s founder Kent Grogan has conceptualised and is planning the world's "greenest" brewery - a $100 million-plus brewery to be built near Ballarat in Victoria. With the funds he's raised, he can now build a big version of what so many small breweries already do and that is a game changer for sustainability citizenship.The new site will be powered by solar energy, source water from an underground aquifer below the 15-hectare site, and generate its own electricity through a combination of solar panels, wind turbines and an on-site "biomass" process which would use spent grain wastes from the brewery. The goal is to elicit a massive cut in the amount of water needed to produce one litre of beer, from 5 litres to 1.2 litres. The advantage Broo have in their grand scheme is that the business founded on eco principals, so the business understands them well and as such, can justifiably built on their core values without ‘green-washing’. They don't have the legacy problems of even the best intentioned mainstream beer manufacturers, who must steer an already huge ship in a whole new direction.
A good example of the sustainable values of many micro breweries is Victorian high country brewers, Bright Brewery, who have the advantage of being located in both a visual and resource utopia with beautiful water, sun and clean air. Like many other breweries, they are solar brewers, carbon neutral and water conservation focused - espousing being authentic, sustainable and active within their own community. And it's these values that both underpin success and are actively changing the entire industry's behaviour as big beer sees consumers supporting them.
It's really a no brainer commercially (market share) why the sustainability principals embodied in locally brewed independent beers are being picked up by big beer. And while it's tempting to poo poo big beer, it's also important to support them because they do have so much impact. Businesses like Heineken reported in January 2018 on the opening of its US$500M brewery in Meoqui, Chihuahua, Mexico. The operation was the largest green field project in the company’s history and was constructed following circular economy principles, focusing on renewable energy and efficient water usage. Just imagine if others got on board and this huge industry did all it could to make all its practices eco-friendly. It’s definitely an industry worth watching over the coming years.