The Growing Market for US Craft in

By James Smith Founder of The Crafty & Festival Director, Good Beer Week Overview

✤ Why am I here?

✤ Beer in Australia - the past, present and future

✤ Opportunities for US craft beer in Australia

✤ Q&A

Brief in Australia

Year ✤ Early beginnings 1800 1 1830 30 ✤ Growth to peak number of breweries in late 19th Century 1860 178 1890 294 ✤ Homogenisation of the 1910 157 20th Century 1920 77 1950 26 ✤ A new explosion 1980 20 Today c. 150 The Birth of Craft Beer

✤ The Sail & Anchor & Matilda Bay

✤ The Rise & Fall of Craft Beer

✤ The Second Wave - late 1990s onwards Craft Beer in Australia Today

✤ Rapid growth – both local and imports – yet still small

✤ Improving quality and innovation

✤ The Third Wave

Facts & Figures

✤ Total Australian beer market is ~AUD$10bn per annum

✤ Craft beer sector makes up just 3%

✤ Major brands are experiencing falling sales

✤ Per capita beer consumption hit 65 year low in 2012

✤ BUT craft sector is booming Craft Sales - Nielsen stats Craft Beer’s 3%

✤ Independent craft breweries responsible for less than 1%

✤ Remainder brewed by Lion (Little Creatures & Malt Shovel) and SABMiller (Matilda Bay)

✤ Only ~10 of the smaller, independent breweries currently operate on a scale where they can significantly expand the sector

✤ Two national associations launched in 2011

✤ Larger one - Craft Beer IndustryAssociation - aims to “Protect, Promote & Grow” craft beer in Australia Retail Reality

✤ Like brewing, the market is dominated by two major players: Coles & Woolworths - between 70-80% total liquor sales

✤ Both have growing range of Australian & International craft beer

✤ Both have launched their own “craft” ranges in recent months: brewed under license and given prominence in their stores

✤ Growing number of small bottle stores with wide ranges and knowledgeable staff. Market share small but punch well above their weight in terms of craft beer sales Imports

✤ Quality imports played a key role in the early awakening of Australian palates

✤ Initially Belgian, German, British, etc

✤ US craft beer a more recent phenomenon, alongside Kiwi, Japanese, Scandinavian, Italian

✤ Much early US craft beer arrived via grey / parallel importing Getting Beer Into Australia

✤ Two main routes

✤ Direct to the major chains

✤ Via a beer importer & distributor

✤ Labelling, tax, transport costs?

✤ Keg versus bottle in Australia

✤ Case studies

Finding an audience

✤ Festivals

✤ Australian International Beer Awards

✤ Key craft venues - most favour kegged product

✤ Collaborations / partnerships

✤ Key media contacts The View from Down Under

✤ Drinkers: growing numbers excited about craft beer. Many proud of local scene but chasing top US, Kiwi, European too.

✤ Venues: quality imports encourage local industry to raise their game. But price point of some US makes it tough for locals to compete

✤ Brewers: some opposition to rise in imports, including elements within national associations. Part of protecting local industry

✤ Environmental concerns / respect for US brewers resisting approaches from importers The “Risk”

✤ “The biggest risk for Australian craft is US beer” - Ian Kingham, ALH (Woolworths)

✤ Many US brewers more established, commercial, organised, financed and with capacity to spare

✤ Australian craft beer market is still in its infancy - many breweries still finding their feet Wrap Up

✤ Craft sector will continue to grow - and fast

✤ The revolution is yet young

✤ Untapped potential remains for quality craft beer in Australia

✤ For longevity, the local industry must be strong too

✤ How do you want to be viewed?

Cheers!

✤ Any questions? Contact details

✤ James Smith

✤ e: [email protected]

✤ p: +61 450 369 718

✤ w: craftypint.com

✤ t: twitter.com/TheCraftyPint

✤ f: facebook.com/TheCraftyPint