Imported craft beers may be a more profitable way of differentiating yourself from the chains than via wine or price discounting, suggests ShopAbility. For National Liquor News Magazine.
Having a partner who is hugely into imported craft beer has opened my eyes to the size of this opportunity for independent bottleshops in Australia. Let’s have a look at some key facts and why this is a good opportunity for some of you.
DEMAND FOR IMPORTED CRAFT BEER IS GROWING – BUT FOR WHOM?
It’s not just domestic microbrews that are growing. It’s a truism that trends in the onpremise tend to drive what happens in the offpremise. So really the imported beer trend has been on the horizon for a while. Not the ‘mainstream’ imports like Corona and Stella but Belgian, German and lately US, NZ and Danish beers driven by the growth and interest in Belgian Beer Cafes and Bavarian Beer cafes and more lately specialist beer offerings from venues like The Local Taphouse in both Melbourne and Sydney; the Pumphouse, Harts Pub and Murrays at Manly all in Sydney; and the Wheatsheaf Hotel in Adelaide to name a few. Let alone the various microbrewery pub/restaurant sites such as 4 Pines and the new-ish Australian Brewery, to name a few Sydney examples.
Increasingly more product from Europe, North America, NZ and Japan has been showing up in Australia via distributors over the past 18 months. Part of the reason for the demand is the strong Aussie dollar, which is buying self-described ‘Beer Geeks’ more bang for their buck.
Beer Geeks are a growing type of consumer who take their beers seriously as a hobby, not just something to quaff. If you were going to rank them on a 10-point scale where 1 is someone happy to live on, say, Tooheys New; 3s are Corona or Stella drinkers and a 10 is someone who only drinks hard-to-get craft imports; these guys probably start at 5. A strong word-of-mouth community, they network and ‘talk’ via specialist beer social media sites such as Beer Advocate and check out beer ratings and releases on websites such as RateBeer, The Crafty Pint, Aussie Home Brewer, Australian Brews News and Microbrewing.com.au. Beer and Brewer magazine is a ‘mainstream’ read for these guys (and they are nearly all guys).
They are prepared to drive up to 2 hours to a store that ranges stuff they are interested in and they are willing to pay top dollar for it based on scarcity. Which brings me to stores that are currently in on the imported craft beer act.
WHO’S WHO IN THE OFFPREMISE IMPORT CRAFT ZOO
A select but increasing number of stores are offering or specialising in imported craft beer:
- Victoria and particularly Melbourne is the competitive ‘home’ of imported craft beer retailers. Two years ago Slow Beer and Purvis were the main two players but now they have at least a half a dozen competitors in Melbourne alone
- Perth, being the ‘home’ of domestic microbrewing, also has a strong (relatively speaking) imported craft beer offer with International Beer Shop, Cellarbrations Carlisle and Mane Liquor being the main contenders.
- In Adelaide there’s Adelaide Bier Shop
- In NSW the main players are probably Platinum Liquor, Porters Balgowlah, and more recently Beer Cartel as well as Warners on the Bay but imported craft beer is in its relative infancy here
- Queensland struggles due to its licensing laws … this is an opportunity for somebody!
There are probably a couple more but my point is that imported craft beer retailing is still fairly immature in the Australian market (unlike imported wine or spirits, which is pretty saturated). The fact that the chains (Dans and First Choice) are starting to range imported craft beers like Sierra Nevada is an indicator of the market … but the chains are restricted by volume requirements (not all breweries can make to the quantities the chains require) and/or who will supply them (a number of craft beer distributors won’t).
KEY BREWERIES AND STYLES TO LOOK FOR, AND HOW TO GET THEM
It makes sense that in a ‘land of lager’ (or lake of it) such as Australia that the Beer Geeks are looking for non-lagers. Specifically what’s been in demand the past 12 months are IPAs, Double IPAs, and Pale Ales with Belgian styles and Farmhouse/Saison to a lesser extent. At the Geekier end of the scale there is a shift to anything barrel aged, and barley wines.
Key brands that have been showing up in Australia the past 12 months include:
NZ: Epic, 8Wired, Renaissance, Moa
Denmark: Mikkeller, Beer Heer, Norrebro Bryghus
USA: Bear Republic, Moylans, Green Flash, Rogue, Brooklyns
Japan: Hitachino, Baird
UK: Brew Dog.
Going via distributors is your best bet as it’s they who are bringing it in (rather than grey market). Use the distributors that won’t deal with the chains and/or range the in-demand or scarce low-volume products. This way you’ll get depth of range eg something like Brew Dog Punk Monk in a can (yes, Beer Geeks like beer in cans); seasonal beers; and better assurance that the stock is fresh.
WHY RANGE IMPORTED CRAFT BEERS
Some very clear simple reasons:
- You’ll make far better margins out of it than you will out of most wine (and it’s hard to differentiate yourself based on a wine offering anyway) … some US beers are coming in cheaper than domestic microbrews, and at higher ABVs
- It’s a growing market
- The consumers are loyal, not particularly price sensitive (although they know their stuff and what a fair price is, but there are ‘bragging rights’ attached to getting hold of scarce beers irrespective of cost) and their frequency of visit will create store traffic for you not only from themselves but from their mates via word of mouth.
The opportunity won’t last forever though, this will be the quick or the dead before the market is saturated. What are you waiting for?