Something’s brewing in NZ’s craft beer market

The first-time Beervana pilgrim gazed around the concourse apprehensively then voiced what many were surely thinking: “Where do I start?”

Promoted as the Kiwi craft brewing sector’s biggest annual beer hug, the 2016 Beervana expo reached the highest state in its 15-year history.  For the first time, it achieved a perfect circle; an unbroken, seemingly infinite loop of beer heaven with stalls spanning the entire 650-metre oval concourse under Wellington Stadium.

"For those who can overcome the growth challenges, success in terms of sales and profits will be lucrative."
Pete Barnao & Linda Townsend, BlueNotes contributing editors

The same venue which days earlier became the home of the southern hemisphere’s Super Rugby champions was now hosting a record line-up of top brewers – no fewer than 60 of them, serving up 300 beers – and the crowds returned in droves to enjoy them.

Something’s brewing in NZ’s craft beer market

The record-breaking Beervana reflects the sector’s wider fortunes. New Zealand’s craft beer industry is raising a glass to another year of success barely imaginable a few years ago.

Sales from across New Zealand’s 160-plus breweries are up 35 per cent in a year, according to new research from ANZ.  A seemingly unquenchable thirst for big flavour beer has seen craft’s share of the New Zealand beer market grow to an estimated 15 per cent, from 9 per cent three years ago.

Geoff Ross, CEO of Moa Brewing, reckons this is just the beginning. “Craft is at 15 per cent of all beer in the US,” he says.  What’s stopping New Zealand getting to 30 per cent, or more? We have the beers to get us there.”

Click image to zoom Tap image to zoom

The rising quality and sheer variety of beers on offer are behind the rapid rise in sales to increasingly discerning consumers, who are seeking out flavoursome brews at beer festivals, at the cellar door, online or at new venues, from the local bar to the airport.

“Brewing in New Zealand has continued to grow into an innovative, sophisticated and valuable sector,” Brewers Guild of New Zealand President Emma McCashin says.

“Our breweries are producing beer with a uniquely Kiwi flavour and vision that is increasingly sought out by drinkers worldwide.” 


Last year’s ANZ craft beer report revealed a third of brewers were already exporting, with a further third eyeing future exports. Data now shows that exports of higher alcohol beers (typical of craft styles) have grown from $A1 million five years ago to $A4.5 million last year.

John Bennett, ANZ General Manager Central Region for Commercial & Agri, says the bank’s research has charted a story of exceptional growth over the past three years. Fast-growing local demand and rising international interest is resulting in diverse opportunities for firms across the industry, he says.

But behind the spectacular growth rates it’s not all beer and skittles. 

“For some brewers, such heady business expansion can feel like holding a tiger by the tail. Increasing competition comes with plenty of challenges,” Bennett says. “With more than 1,500 brews now jostling for consumers’ attention, a space race is emerging on the nation’s retail shelves.”

“Brewers can also find themselves bumping up against constraints in resources such as staff, manufacturing capacity, ingredients and working capital.”

Large and small brewers alike have been forced to confront a lack of scale, he says.

“Solutions are emerging. For some, it means developing business capabilities to attract investment to build plant. For others, licence or toll-brewing is attractive for consistent quality and known production costs, allowing the brewer to concentrate on product development and marketing.”

Some are eyeing a planned multi-million dollar state-of-the-art brewing and packaging facility, whose location close to the port in the NZ’s North-Island city of Napier will minimise costs associated with logistics, freight and production.

But the question on many people’s lips is whether the sector can continue to grow at the spectacular rates of the past few years. 

“Our perspective is yes, and no,” says Bennett. “’No’ because it’s reasonable to suggest at some point as the sector matures the overall rate of sustainable growth will soften.

Click image to zoom Tap image to zoom

“That said, we have no doubt that brewers who can successfully tackle the emerging growth challenges will sustain high growth for years to come.

“Craft beer is a sector of agile and creative founders. For owners seeking sustainable growth the key is to concentrate on the driving vision and answer some strategic questions: Where do you see yourself in 10 years? How will you get there? What does your business need more of and how will you get it?

“We’re impressed by the passion, innovation and collaboration the Kiwi brewing community brings to building its future. For those who can overcome the growth challenges, success in terms of sales and profits will be lucrative.”

Pete Barnao and Linda Townsend are contributing editors at BlueNotes

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

editor's picks

09 Aug 2016

Heavy traffic detour for NZ truckometer

Sharon Zollner | Chief Economist New Zealand, ANZ

An abrupt 5.7 per cent fall in ANZ’s Heavy Traffic Index in July runs counter to almost all other economic indicators and anecdotes, warning an economic slowdown may loom.

08 Aug 2016

A tale of several cities (in NZ)

Sharon Zollner | Chief Economist New Zealand, ANZ

The Reserve Bank of Australia cut the cash rate to a record low last week but banks passed on only half of it at a retail level. A similar outcome is likely in New Zealand this week should the RBNZ follow suit, with bank funding costs having risen sharply this year.

11 Aug 2016

IN PICTURES: One family, one farm and 150 years

Sarah-Jane Bashford & Marise Hurley | BlueNotes contributing editors

It’s a rare and remarkable thing - a farming family who can claim a century on their farm thanks to an ancestor who also played a major role in developing what is now New Zealand’s largest bank.