Independent Brewers Get Seal of Approval

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INDEPENDENT BREWERS GET SEAL OF APPROVAL News of an independent brewers seal that will be used on beer packaging to identify the origin has sparked conversation within the industry of late. Questions have been raised about the amount of sway being ‘independently owned’ has on trade and consumer buying decisions, and whether or not the seal could become associated with quality, threatening to take away from the quality of the beers that are made by the bigger brewers and their subsidiaries.

By Hannah Sparks

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Photo by Thomas Picauly

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eeing a need to be a voice for independent brewers, in June this year, the Craft Beer Industry Association renamed to the Independent Brewers Association (IBA) and made some significant changes to its constitution. The most notable alteration was to its membership criteria, which restricted representation to breweries that sell less than 40 million litres of beer per year and that are less than 20 per cent owned by the larger breweries, removing names such as Little Creatures, Malt Shovel and Mountain Goat from its representation at the time.

In another move intended to better represent independent brewers, more recently the IBA has been developing a seal (or logo) for its 200 members to use on their packaging and marketing assets to showcase the ownership of their beer.

Chairman of the IBA, Ben Kooyman, who is also the Founder of Endeavour Vintage Beer Co., an independent brewery based in Sydney, explained that the seal is part of a wider campaign to create a stronger awareness amongst the industry and consumers of what an independent brewer is and to identify independent brewers in Australia.

He says, “Consumers in everything want to know more. They go to a restaurant, and they want to know where the meat is coming from, where the coffee beans are sourced, and this is no different in beer. People want to know where it is brewed, what’s in the beer they are drinking and who the people behind the company they are supporting are, and we aim to educate that with the seal and our campaigns.”

Awareness forms one of the IBA’s four pillars, in addition to regulation, quality (ensuring consumers are guaranteed quality beer from its members) and value, which together feed into the IBA’s overall target to reach 15 per cent market share of Australian beer volumes by 2025.

While better quality and improved sales for independent brewers are part of the IBA’s strategy, Kooyman stresses that the seal is not intended to be linked to either and that the launch of the seal will be backed by a campaign to educate consumers on what it signifies. As to exactly when that will be, however, is unknown, with the IBA still working through its development.

“Each member brewery is producing beer on different scales and production levels, so it will be a challenge to implement the seal around the same time, so you’ll see some discrepancy with that,” Kooyman added.

“Many have reinforced that the seal must be linked to origin only, and not to quality, to protect the larger and non-independent brewers that won’t be able to use the seal.”

Similar seals have been created by the equivalent associations in the UK and US. Paul Gatza, Director of the US Brewers Association, commented on why it had launched a seal there: “Big [brewers] hide their ownership in a handful of smaller brands they have acquired. Beer drinkers know that there have been deals, but have a hard time identifying which beers come from truly independent brewers. The independent craft brewer seal is a great tool for the beer drinker. Today, 2,284 independent craft brewers have licensed use of the seal, covering 70 per cent of craft brewer volume.”

The UK’s Society of Independent Brewers (SIBA) Chief Executive Mike Benner had a similar message: “The growth in popularity of beers from independent craft breweries in recent years has been a huge positive for the beer industry, but this growth has not gone unnoticed by the global beer companies that have begun buying out previously independent breweries or launching their own products marketed as craft beers.

“SIBA’s ‘Assured Independent British Craft Brewer’ seal makes it crystal clear to consumers that the beer they are buying was made by a truly independent brewery and has proved hugely successful, adopted by hundreds of breweries across the UK on their pump clips, bottles, can labels and websites.”

Supporting the introduction of a seal for independent brewers are the results of the recent 2017 Australian Craft Beer Survey by speciality craft beer retailer Beer Cartel. This is the largest, publicly available study of Australian

craft beer drinking trends, with participation of 17,000 craft beer drinkers.

The results are well worth a look at and can be found online at www.beercartel.com.au/ blog/2017-australian-craft-beer-survey-results/ Of particular interest to the launch of the seal is the strong sentiment shown by the survey that consumers consider the origin of a beer in their purchasing decision. The majority of respondents, 64 per cent, said that they want to know who owns the beer they’re drinking, and in addition, 99 per cent indicated that they are happy to buy craft beer from an independent Australian owned brewery. This is in comparison to just 23 per cent that said they would buy craft beer made by a large multi-national company, and 32 per cent from supermarket owned brands.

Backing up the IBA’s new initiative even more so, was the 82 per cent of respondents that indicated that an independent brewers seal would have a medium to large impact on the craft beer they purchase.

BROADER INDUSTRY VIEWS There is also relatively strong support for the introduction of the seal from the beer industry more broadly, with people seeing it as a good piece of innovation to identify independent brewers in the market. However, many have reinforced that the seal must be linked to origin only, and not to quality, to protect the larger and non-independent brewers that won’t be able to use the seal.

One of those, for example, is Coopers. For

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“If the independent brewers are going to that level of effort with their labelling, then they should also look at making their labelling compliant. Research conducted by the Department of Health in 2014 found only around 15.9 per cent of craft brewers were meeting their obligations.”

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six generations, Coopers has been Australian made and Australian owned, and yet despite its position as an independent brewer, because of the size of its volumes - which exceed 40 million litres per year - it is ineligible for membership to the IBA and use of the seal.

Coopers, Lion, and Carlton & United Breweries, which also will not be able to use the seal, are all represented by the Brewers Association. CEO, Brett Heffernan, says he doesn’t think that the introduction of the seal will make a difference; that most consumers don’t care who makes the beer, just that it’s good beer. However, he does raise the argument that independent brewers should consider the regulatory compliance of their existing labels before focusing their efforts on creating an additional seal.

“If the independent brewers are going to that level of effort with their labelling, then they should also look at making their labelling compliant. Research conducted by the Department of Health in 2014 found only around 15.9 per cent of craft brewers were meeting 26|drinks trade

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their obligations.”

Heffernan claims his members are 100 per cent compliant; this includes the symbol warning of drinking during pregnancy, as an example.

Danielle Allen, Co-Founder of Melbourne based Two Birds Brewing, which is a member of the IBA, is supportive of the seal but maintains that it needs to be backed up with a strong campaign to educate consumers on what it really means and stands for.

She comments: “I’m definitely supportive of it [the seal], but I would like to see the consumer campaign that goes along with it, as I think it’s critical to get the messaging piece right.

“If breweries all start placing a seal or logo on their branding without the backup of a consumer campaign, and actually explaining to consumers what it means, it will be an expense that will be difficult to justify.

“The marketing campaign needs to be carefully crafted so that the average consumer can understand the campaign and how this relates to their purchasing decision. Hopefully, it will be positively received by consumers,

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and this will help sustain the ambitious growth targets for the industry and Australian owned craft breweries.”

From a retailer perspective, Richard Kelsey, Director of Beer Cartel (the business behind the Australian Craft Beer Survey), feels that the seal will help to distinguish an independent, Australian-owned brewery from one that is owned by one of the bigger corporates.

Kelsey does, however, reiterate the concerns that consumers may see the seal as a symbol of quality.

“There is a consumer perception that small, independent craft brewers are about using the best ingredients and processes to make the best beer possible. The perception is that these breweries aren’t about selling a beer that is based around marketing, but one that has great flavour and quality.

“In contrast a belief exists, whether rightly or wrongly, that when a big brewer buys a little brewer, the quality goes downhill because they are then trying to cut corners (and costs) to line the pockets of their shareholders.

“From a retailer point of view, the seal may also cause us to rethink how we layout our stores maybe in the future there will be an Australian independent beer section that exclusively stocks independently brewed beers.”

“An example of this is with Little Creatures, who people frequently say doesn’t taste the same as when it was independent. Personally in that instance (with Little Creatures), I don’t think the quality has changed, it’s more so a fact that consumer tastes have evolved and what was once a bold pale ale doesn’t really stack against other pale ales that are now on the market.”

Kelsey also brings to the forefront an intriguing suggestion that the roll out of the IBA seal may spur retailers to create a solely independent section for consumers.

He says, “From a retailer point of view, the seal may also cause us to rethink how we layout our stores - maybe in the future there will be an Australian independent beer section that exclusively stocks independently brewed beers.”

Victorian-based Mountain Goat Beer has also heard similar comments since being acquired

by Asahi Premium Beverages, but what many customers and consumers don’t know is that Mountain Goat was already producing some of its beer at Asahi’s Laverton brewery before the acquisition to support volumes. Mountain Goat

was upfront about this from the get-go, including a note on the label of the beers brewed at Laverton that stated: ‘Brewed offsite under the close watch of Goats’.

And even under the ownership of Asahi, Mountain Goat has continued to produce award-winning beer - three Australian International Beer Awards trophies, one for Best New World Pale Ale and two for Best IPA, and all of the core range of beers have been recognised with medals.

Mountain Goat General Manager Mick Bentley’s views are that the introduction of a seal is positive, but also expresses the potential downfalls of linking the independent seal and term to beer quality.

“It’s a great initiative,” he says. “The craft beer category in Australia should celebrate the diversity of the breweries that make it up. If independent breweries wish to promote the IBA on their packaging, hopefully, this clarifies that on every other measure we are all craft breweries and we can now work together on the other challenges our industry is facing.”

However, Bentley also reiterated that “Independence cannot possibly mean better quality beer. Only brewing techniques, ingredients and professional development of our brewers can impact quality (or lack thereof). To associate independence with quality is risky for our entire category, and the IBA must be aware of its role in helping to develop all of its smaller members that don’t have access to the same facilities, ingredients and equipment of its larger members.“ Education around the meaning of the seal will be central to its implementation and the IBA will be working on the supporting campaign over the coming months, ensuring that its communication is directly linked to the origin and not quality.

Two Birds Brewing’s Danielle Allen adds to this point: “It’s not a mark of quality - multinational breweries can also produce great beer - it’s a device to simply point out to the consumer which breweries are independently owned.”

As for the impact that its presence will have on independent beers sales, time will only tell once the seal has had a chance to make its mark.

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