Australia risks having too many brewers plunging into a too-crowded market with too little knowledge, according to the billionaire founder of one of the world’s biggest craft breweries.
Ken Grossman, who started California’s Sierra Nevada brewery more than three decades ago, says the Australian industry is in danger of following some of the US industry’s costly mistakes.
Having watched the US craft beer market boom to the point of oversaturation, Mr Grossman says Australia should take heed.
“We knew there was going to be a reckoning,” says Mr Grossman.
“The growth rate [of craft beer] is slowing — it had been double-digits for more than 10 years, and if you project that out, there’s no way it could continue.”
When he founded Sierra Nevada out of his garage in 1980, there were around 40 other breweries in the entire United States. Now there are more than 5,000.
A similar pattern is emerging in Australia. In the past five years alone, the number of Australian independent breweries has jumped from 200 to 400.
Mr Grossman has no doubts the so-called craft phenomenon is here to stay, but he cautions those looking to dive into the market and make it big quick.
“If you want to enter with the aspirations of being a national brand, I’d think long and hard about that, because it’s going to take a huge amount of resources,” he says.
“Anybody can buy a brewing kit for a few thousand dollars, install it and become a brewer, but what really needs to go along with that is a keen understanding of the science of brewing. People are skipping those steps.
“It’s much easier today to be a knowledgeable, sharp brewer, but I see a lot of entry brewers not availing themselves of that knowledge, not doing the hard work, not investing in the facilities that will allow them to have consistent quality beer going forward.”
He says aspiring brewers’ enthusiasm is too rarely matched by an understanding of the scale and resources required.
“There’s quite a jump between making 5 to 10-gallon batches of beer, to commercially producing beer day in, day out that meets the customer’s needs.
“The pitfalls I see are the lack of attention to detail, the lack of that hard-learned experience that some of the early brewers had to do.”
Brands, peak bodies shrug off ‘craft beer’ label
Australian brewer Jamie Cook echoes Mr Grossman’s concerns.
“This marketplace at the moment is getting pretty cluttered,” says Mr Cook, the co-founder of Stone and Wood Brewery, “so you need to have a strong brand that can cut through that, which drinkers want to engage with.”
Mr Cook started the Byron Bay brewery with Brad Rogers and Ross Jurisich in 2008. All three men were veterans of the mainstream beer industry.
While they wanted to develop something distinct from their former Fosters and Carlton and United masters, they were wary of the “craft” label.
“A lot of brewers tend to brew a handful of beers to style — a pale ale, an IPA, a stout, a pilsner. We didn’t want to go down that road. We wanted to brew something for the experience of drinking beer in Byron Bay,” says Mr Cook.
“We’ve never positioned ourselves as craft. Craft is a term that you can’t own — so why define yourself by something that’s open to interpretation and you can’t own?”
They’re not the only ones turning away from the “craft” label. In the past week, the peak representative body for small-scale brewers formally changed its name from the Craft Beer Industry Association to the Independent Brewers Association.
The idea is to emphasise the provenance of the product and the people that make it.
“People are buying into small, personable businesses,” says Mr Cook.
“The flavoursome beer is an important part of it, but the underlying thing that is driving the trend is people wanting to know who makes the things they eat and drink, and the authenticity behind them.
“They want to make sure when they scratch behind the label, the story that’s there is the same one on the label.”