Craft beer exports could face slower growth
Looks like selling US craft beer abroad has become more of a challenge. And it’s not because of unfavourable currency swings. As anyone will know who follows Brauwelt’s newsletter, there is more competition from local craft brewers in many of the markets that US brewers are exporting into.
Growth rates have slowed down in recent years. After achieving a 36 percent hike in 2014 (over 2013) and another two-digit boost (16 percent) in 2015, the increase in US craft beer exports slowed to a mere 4.4 percent in 2016, totalling 465,617 barrels beer (544,000 hl) or USD 121 million. 2017 figures will be released by the Brewers Association (BA) soon.
While many US craft brewers have benefitted from participating in the BA’s export programme, a sizeable amount of beer export volumes must be attributed to just one brewery: Brooklyn.
Brooklyn Brewery says that roughly half of its revenues now come from exports.
Talking to media recently, Eric Ottaway, the company’s CEO, said that they have been able to grow overseas because they were early entrants, so they got a head start on their competition. And they found a cheaper way to transport their beer. Most exporters ship bottles, cans and kegs; Brooklyn ships its beer in 25,000 litre insulated tanks which are subsequently packaged locally, for example by Carlsberg in the UK.
This has its advantages. Shipping in a tank saves packaging weight and, in turn, costs. Also, kegs do not have to be returned to New York.
Mr Ottaway pointed out that the other key to Brooklyn’s export growth has been partnerships with local brewers to make and distribute their beer. Presently, they are working with Carlsberg throughout most of Europe, with Kirin in Japan and with Coopers in Australia.
This could be a problem if local consumers feel duped for not getting the real stuff. Apparently, Brooklyn has not faced such issues, except in Australia, where according to Mr Ottaway a few Australians who tried a Brooklyn lager brewed locally had complained: “Hey, this tastes different!”
His response was: “Well, yeah, now it tastes like it actually should as opposed to beer that’s been sitting on the water for six weeks.” That is a good response … but it may not satisfy the orthodox fringe in Australia that demands to have beer “from its country of origin” – in their eyes, the real thing!
Another obstacle to growing craft beer exports for all is importers’ lack of resources to handle many import brands. With BrewDog and Stone’s beers enjoying superstar status in many markets around the world, importers have had to dedicate most of their resources to handling those brands. This has been to the detriment of other imported craft beers, which suddenly found themselves demoted from an A- to a B-brand.
But talk to any seasoned beer exporter and they will only shrug their shoulders. Selling beer abroad has never been a walk in the park. So why should it be different for craft brewers?
