You need only visit your local pub to understand that craft brewing has exploded in Australia. Today’s beer drinkers are casting aside familiar brands in favour of new flavours and new breweries to quench their thirst.
Aussie’s insatiable appetite for new taste sensations has driven a surge in alcohol consumption and a marked increase in revenue for the industry. According to a study by IBISWorld Revenue from craft beer producers is expected to increase at an annualised 9.7% over the next five years. Major breweries such as Lion Nathan have taken advantage of the trend, acquiring craft brewers, Little World Beverages and Byron Bay Brewing, Carlton has made similar acquisitions. In the meantime, small scale breweries are opening all across the country, taking advantage of the change in consumer tastes.
Tribe Breweries CEO Anton Szpitalak says his company’s own research backs up the trend towards craft beer.
“Our market learnings show that consumers are no longer wanting the norm or the most convenient option. They want products tailored to their taste palate and lifestyle, as well as flavour blends that you simply can’t find on any major supermarket shelf,” he tells Kochie’s Business Builders (KBB).
While the popularity of craft beer continues to rise, Szpitalak suggests many craft brewers are struggling to keep up with demand. To cope with consumer needs Szpitalek has launched a partner program at Tribe Breweries to ensure these ‘little guys’ can have access to equipment and resources to grow.
“Many producers are beginning to realise that consumers are demanding products that don’t fit the standard mould, but they struggle with how to start the journey and often don’t have the capability to do so,” he says.
“From my experience, one of the key focus points of a brand owner needs to be the ‘how’. As the first point of call, brands or artisans should look at engaging in partners that can help with their needs in this department to help scale their ideas into a commercial reality.
“We recognised this exponentially growing need at Tribe, which is why we allow brewers everywhere to access our people, process and equipment through our Partner Brewing program.”
Szpitalak suggests partnering with a reliable brewery can provide craft brewers with alternative growth options, and will ultimately lead to a stronger craft beer industry in Australia.
“It can also reduce the occurrence of errors that may arise during the manufacturing process. We are strong believers in helping smaller brewers, which is why we embarked on building Australia’s most ambitious $35 million brewing project, set to launch in September 2018.”
IBIS World’s research suggests brands need to produce more personalised and non-traditional offerings to appeal to the public, Szpitalak agrees.
“To succeed in this increasingly saturated market, brands need to look at offering innovative flavours, packaging options, collaborations and limited editions. For example, we have used our new capability set to put products into different packaging options – such as coffee in cans and kombucha in kegs – and we’ve found it works extremely well. Millennials are a strong driving force behind this need for this differentiation and personalisation. Research by Nielsen revealed recently that millennials, in particular, have an ‘appetite for new and exciting products’ and almost one-in-two Millennials like to try new or different beers.
Brand extensions can also be an effective way for brewers to grow, by leveraging their existing reputation and customer loyalty to introduce tweaked new products.
“We have found that consumers are becoming more health conscious, and are becoming increasingly drawn to trendy ingredients. A recent report revealed that Kombucha drinks have grown 7 times in the last 2 years in the Australian market. By capitalising on trends and getting first to market with extensions that are unique yet within a similar market, this can facilitate long-term growth,” he says.
Of course. ensuring your brand maintains high standards is another essential.
“Brands need to ensure that their products have the integrity to keep up with evolving distribution. Small brands often suffer when moving from short supply chains to long supply chains – however, a good partner can reduce some of these growing pains.
“Artisans value partners that focus on the integrity of their brand and have experience in quality assurance and key manufacturing certifications. Recognising this importance, at Tribe, we set out to create the most well-evolved quality control and assurance program in the Australian craft beer industry.
Anton concludes, “As brewers, we have witnessed well-known large brands encounter problems when trying to scale at a rapid pace and ultimately fail in accommodating increasingly complex consumer demands. In a time of rapid growth, artisans looking for opportunities to share their creations should not be discouraged by the daunting task of production.
Partnerships with reliable breweries can assist in scaling up and keeping up with demand and can do so without stretching existing resources.”