INDEPENDENT BEER: PROUD INDEPENDENCE

Proud independence

There are several things driving the strength of independent brewers of all sizes in AustraliaBrydie Allen investigates what the sector has to offer retail.

We’re pretty lucky in Australia to be home to such a vibrant array of independent producers in all of our drinks categories. Our local independent distillers, winemakers and brewers are internationally recognised for their commitment to quality and innovation, with their products raking in accolades the world over.

When it comes to the beer category (one of the consistently biggest categories overall for liquor retailers in Australia), supporting independent brewers has never been easier. The sector features a never-ending amount of choice, with new and limited releases keeping drinkers interested from all angles. It’s easy to access, with a wide range of wholesale and distribution partnerships to suit different customers. And, last but not least, it’s got an engaged and loyal set of consumers that is ripe to grow.

The power of independent beer is leading to a lot of movement in the sector. In 2021, beer giant Lion bought independent brewer Stone & Wood. Just last month, Australian Liquor Marketers (ALM) announced it had acquired successful independent brands Doss Blockos and Lick Pier.

But the precarious nature of independent beer has also been in the spotlight recently. Earlier this year, Tribe Breweries announced it was going into voluntary administration, and Ballistic Beer Co was saved from liquidation by a consortium of investors.

In this environment, especially with predicted caution to come from consumers this year, it’s vital liquor retailers stay up to date about what drives independent beer and how best to support it.

Key consumer loves

According to independent brewers of all sizes in Australia, there are a few key things that local consumers are loving about the sector.

On the smaller side is Kaiju! Beer, where Chief Boss, Callum Reeves, noted that shoppers are looking for something a bit extra to improve their experiences with brands.

“I think consumers love that independent craft brewers are doing the heavy lifting in terms of product and marketing innovation,” Reeves said.

“With craft beers much more mainstream and socially acceptable there is a larger group of drinkers who are proud to get behind their favourite breweries and their local brewpub. It’s that sense of knowing the people and the place where your beer comes from.”

At the other end of the scale is Coopers, the largest independent Australian-owned brewery in the country. General Manager, Michael Shearer, agreed that the nation’s beer drinkers place great value on where their brews come from.

“Our drinkers are proud to know they are supporting an authentic Australian-owned and operated brewery and their loyalty has seen us continue to punch above our weight in the national market,” Shearer said.

“Producing a great tasting Australianowned and made beer in a market packed with internationally-owned brands allows us to really stand out to consumers.”

Coopers remains a family business and is now in its sixth generation. Shearer said the team still regularly gets praised for this, after avoiding a takeover bid in 2005.

One value that is important to these drinkers when it comes to independence is trust. Consumers want something they can believe is genuine and authentic, but that can also consistently deliver on their expectations of quality and taste.

“Consumers are continuing to be drawn to brands they can trust, with quality, consistency and value more important than ever.”

This was something emphasised by John Hoedemaker, Managing Director of another large independent brewer in the local market, Good Drinks Australia.

“Consumers are continuing to be drawn to brands they can trust, with quality, consistency and value more important than ever. They’re also committed to brands that they can connect with,” he said.

Connection can come from shared values, like the family-oriented one of Coopers, or from complementary lifestyles, like for Gage Roads Brew Co, a brand from Good Drinks.

“Gage Roads Brew Co is really all about championing that coastal lifestyle that so many of us enjoy, so it’s great to see more consumers getting a sense of that coastal holiday, fishing trip or surfing adventure, every time they crack open one of our beers,” Hoedemaker said.

The trends driving indie beer

Within the independent beer sector, there are a few key category trends that are driving interest amongst consumers at the moment.

Reeves tipped his top styles, and said: “Hazy beer styles still seem to have a way to go in terms of growth capacity but a really well-crafted West Coast style can sell through faster than you can make it as well.”

Shearer’s views were that “lager, and specifically craft lagers, continue to gain popularity particularly among flavour conscious consumers.”

Coopers is set to grow its appeal with these trends, thanks to a new 3200 litre microbrewery, which will be a key component of the $50 million development currently underway at its Regency Park site in South Australia.

“This microbrewery will allow our brewing team to develop more craft-style beers in the future and I know they are very excited about that prospect,” adds Shearer.

Another key trend is one that seems to be impacting all categories at the moment - the ‘better for you’ movement. Reeves noted that this seems to be creating growth at the entry level end of the independent beer sector, while the previously noted trending styles seem to be impacting more of the premium side of the sector.

“We are noticing a shift towards ‘better for you’ across beer and beer-adjacent beverages, which aligns somewhat to trading down to more entry level craft beer, which is generally lower in alcohol and has other health callouts,” he said.

“It’s almost like that k-shaped trend, where the midlevel is giving way to both more premium and more entry level growth.”

Coopers has seen this too, with demand continually strong and growing for Coopers Mild, Coopers Dry 3.5 (a mid-strength low carb lager) and Coopers Ultra Light.

Gage Roads Brew Co is also experiencing the ‘better for you’ impact, seeing great results with the Side Track All Day XPA (mid-strength), and Yeah Buoy non-alcoholic XPA.

But across all these trends and more, Hoedemaker said there is a key theme seen throughout.

“Across the board, consumers are seeking out flavour. We’re seeing that on both sides of the ABV ledger,” he said.

In its 2022 Australian Craft Beer Survey results, Beer Cartel noted that all of these trends were important within the craft beer industry. Lager and hazy/New England IPA styles saw significant positive growth compared to the 2022 Survey, while the no and low alcohol segment has seen tremendous growth.

#AskForIndieBeer

In 2017, the Craft Brewers Industry Association (CBIA) changed its name to the Independent Brewers Association (IBA), in order to better reflect its support for the smaller independent breweries. It was a time when ‘craft beer’ was booming, and larger beer companies (including multinationals) had expanded their portfolios to include it accordingly.

IBA’s goal to raise awareness and support for independently owned breweries has given rise to the campaign, #AskForIndieBeer. It includes the Independence Seal, which members of the IBA can apply to use to educate the trade and consumers about independent breweries.

There are a number of activities planned around this campaign in 2023, to boost recognition of the Seal and all it stands for. This includes the just-announced first direct to consumer education campaign entitled ‘Behind every great Aussie indie’, designed to explain exactly what independence means, to tell the stories behind the beer and to provide information on how and where to find it.

IBA CEO, Kylie Lethbridge, said: “We are really trying to creating a consumer-based social movement to drive further understanding of what being independent really means.”

For more information on the Seal, IBA or how you can get involved, head to the IBA website: iba.org.au

Getting behind the sector

With the rising cost of living, consumers are going to be more conscious of how they spend their dollars. However, this does not mean that they’re not going to be willing to pay a little extra to support independent beer. It does mean though, that the industry will need to be more targeted in their approach to the segment.

Shearer said: “There is no doubt our industry faces its challenges in the year ahead. With cost of living increases we expect consumers will become more price and value sensitive. We believe Coopers is well positioned in this environment as we have a portfolio of highly recognisable products that deliver consistently great taste at an accessible price.

“At the same time, we are investing significantly in targeted marketing campaigns, sponsorships and promotions that keep our brands front of mind with consumers across the country.”

Reeves believes that the news of breweries going into administration shows there has been a level of overcapitalisation during the pandemic. But retailers seem to still see the great value within the independent beer sector, which is what will keep the industry afloat during hard times.

Our drinkers are proud to know they are supporting an authentic Australian-owned and operated brewery.

- Michael Shearer, General Manager, Coopers Brewery

“Retailers seem to be recognising the healthy margins and innovations that supporting independent brewers brings. We want to see more and more fridge doors dedicated to independent craft beer and retailers getting on board with the Independent Brewers Association’s initiatives like #AskForIndieBeer,” Reeves commented.

As Hoedemaker concluded, independent breweries are invested in creating win-win relationships. He highlighted the Good Drinks strategy to be easy to do business with, focusing on evolving supplier and vendor relationships rather than relationships based in strategy.

“It’s really important for us to help our customers by providing a range of products across several categories, that deliver strong margin,” he said.

“Get rid of the long tail of contracted space with declining brands that aren’t turning over, and do a deal with a vibrant business out there that wants to create win/ win scenarios.”