Craft Beer Bubble In New Zealand?

Over the last week or so, some interesting conversations have happened for me around where craft beer is at and going in New Zealand.

I’ll roughly outline some of the points and ideas that have been raised. Not saying I agree with them all, or that there is any specific measurable information available to prove any of the following.

2013-03-07 16.52.09Three Lamps craft beer bar closing. Rent was too high? but the possible main point was they couldn’t get enough customers through the door to buy craft beer, in one of the most affluent parts of New Zealand. Location, parking, rent, passion? may have been contributing factors.

House on Hood (plus the other two bars) sold in Hamilton. Sky Sports Grill for sale/on the market. Why are craft beer bars being sold? cause they are(n’t) viable businesses? profitable? or location? or owners cashing up? These bars plus Three Lamps could see the loss of up to 100 craft beer taps back to the large breweries in Hamilton/Auckland.

Supermarkets and bottle shops, finally rationalizing the range of craft beers on their shelves, as the market continues to become more competitive. The slow-moving beers are being dropped, or just not re-ordered.

Prices dropping, as new players come into the market and try to win market share. They are sacrificing margin for volume. Is this a good move? Is it sustainable?

It seems there have been a lot of breweries open in the last year, whether through building a brewery or starting a brand and contract brewing. There is now a feeling in the market that supply has now outgrown the growth in demand from the customer. Has the growth in the number of new drinkers for craft beer in NZ slowed?

Sky Sports GrillOn the back of this possible slowing of new drinkers, comes the elephant in the room, beer quality. There is a number of beers in the market that are problematic and just not that good. This was highlighted when I had a story relayed to me about a guys friend saying he has given up on trying craft beer cause “you can’t be sure if it is going to be good or not”, “best to stick to the known brands”

Also the recent New Zealand summer was patchy at best, and not a shade on the previous summer which delivered some incredible growth for the beer market.

All in all things in the craft beer market in New Zealand have gotten a whole lot tougher in the last 6 months. Time for a reality check. Improve quality, sharpen prices, offer better value (not necessarily dropping prices), better service and maybe creating some interest in the beers. (many opportunists flooded the market in the last couple of years, offering beers masquerading as craft but really weren’t much more than Crafty Beggars).

Has the shine started to come off craft beer in New Zealand?

Is the craft beer bubble about to burst?

 

 

UPDATE: always good to read the feedback on Facebook after I post a rant. It gets me a little more focused.

I forgot to mention the Sprig & Fern closing in Auckland (more craft beer taps lost)

Maybe my focus should be on the number of craft beer taps lost in Auckland & Hamilton in the last 5 years (or is it 7 years since the Cock & Bull got bought out). We are looking at approx. 100 craft beer taps being lost. But we have gain possibly as much. So maybe for the region we are where we were for craft taps as we were in 2007. The new operators seem to be more passionate about craft, and offering a wider and better(?) range of beers on tap.

UPDATE II: my reference to bubble is more about a correction vs “craft beer is dead”. Kind of like a property bubble or an IT bubble. It bursts, there are casualties, but it doesn’t goes away, and the survivors are stronger, and the growth continues.

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