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Home / Business

Cold chain or ambient? NZTE weighs in on beer-nerd debate

Chris Keall
By Chris Keall
Technology Editor/Senior Business Writer·NZ Herald·
6 Apr, 2019 08:25 PM7 mins to read

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Photo / NZTE.

Photo / NZTE.

Beer is the opposite to wine - the fresher the better.

While wine often benefits from years of cellaring, beer will usually taste at its best within three to six months of its brewing date (the exact timing depends on the variety).

That goes double for craft beers, which are often aggressively hopped. The "hoppyness" fades after a few months.

There's a second qualifier: consistent temperature. Don't buy beer out of a fridge then let it go back to room temperature then chill again. Wrecks the taste.

And on a related point: a new report by NZ Trade & Enterprise on the craft beer market notes that in the US, notes a "polarising industry debate" over "cold chain" or "ambient" (room temperature) shipping.

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"Lagunitas, one of the top US craft breweries, demand a door to door cold chain with their in-market distributors before signing a deal," it tells budding exporters in New Zealand's increasingly crowded craft beer market, which now includes around 200 labels.

"Refrigerated containers (reefers) are an absolute must for most of the New Zealand craft brewers we spoke to."

The report says keeping beer chilled at every step of the export and delivery chain will be expensive - costing around a $1 per case - but be worth it for preserving freshness

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Alas, it's easier said than done. While parts of the US are cold chain-obsessed, a lot of distribution centres in Australia are ambient.

And "Multiple brewers with experience in China have told us that you can almost guarantee the 'last mile' will be in the back of a very hot van," the report says.

Then there's the ambient faction.

A number of more established New Zealand craft breweries are shipping their beers ambient, the report says.

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"There is an emerging school of thought that consistency is the most important temperature factor in keeping craft beer in a good condition – that it's actually the large variances in temperature that can damage the quality of the beer."

It advises exporters to get resistant containers and specifying where you want your container positioned on the ship - for example, away from the boiler, below deck - can provide a consistent ambient alternative to the expense of shipping cold.

"Your product will get to market at a lower cost, and some say arrive in just as good
Condition.

This is a relatively new theory for craft beer, with the prevailing school of thought still being that it's the length of ambient time which spoils the beer. That is, keep it cold for as long as you can."

A third way

So what's the best option?

It could, in fact, be the third option: brewing-offshore in your target market.

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NZTE's hero case study here is the Wellington-founded Yeastie Boys, who decided to brew "in-country" - setting up shop in the UK, initially through a partnership with local outfit BrewDog.

One-time Z Energy business analyst turned Yeastie Boys co-founder Stu McKindlay. Photo / Mark Mitchell.
One-time Z Energy business analyst turned Yeastie Boys co-founder Stu McKindlay. Photo / Mark Mitchell.

Exporting from Wellington would have meant it took anything up to four to six months to get its bottles into the hands of UK craft beer drinkers (although at least the Brits have broader expectations of when beer should be drunk. NZTE's report quotes research that found Kiwi drinkers think that craft beer has a shorter shelf life – a median of six months, versus eight months for Australian drinkers and 12 months for UK drinkers).

The move proved so successful that Yeastie Boys, which now describes itself as a Wellington/London company, is likely to achieve UK sales 20x higher than its NZ turnover by the end of this year.

Contract partners need thorough vetting for quality control, in any industry.

In brewing, Yeastie Boys also found that brewing in the UK meant having to comply with local rules, and there are a lot of them. For an extended period, the Kiwi startup had to spend around 20 hours a week grappling with compliance issues.

If McKinlay seems more focused on business modelling than your average craft beer enthusiast, it's no accident.

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He did a management degree at Victoria before embarking on a corporate career that saw him become a business analyst for Z Energy before going full time with his startup.

Repeating model in Australia, US

"When I arrived in UK, four years ago next week, the independent bottle stores were bursting full of imported products. I'd estimate that 50-70% of the beer on most of these stores shelves were overseas," Yeastie Boys co-founder McKinlay tells the Herald.

"These days there are a few that have none at all and most are in the realm of 10%. Taps in pubs and supermarket shelves have moved in a similar direction.

"Everything is becoming more local. We now have more of Yeastie Boys' locally-brewed beer on Tesco shelves than all American breweries combined."

The 11-year-old Yeastie Boys exported up to 70% of its beer in its early days, but noticed a similar pattern across all markets: "We'd start off with a hiss and a roar, flatten off after a year or two, and then go into a gradual decline," McKinlay says.

"With this in mind, we put off sending beer to UK for a number of years, despite a lot of interest). Then we put together a plan to brew in-market rather than export.

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"The idea here was that we could have fresher beer, at a sharper price and better margin, and be more adaptable to the needs of customers in the local market.

"If we needed an extra twenty pallets of Bigmouth - our Session IPA - we could have that ready in four weeks. From New Zealand that would take at least 10 but probably 12."

Photo / NZTE.
Photo / NZTE.

McKinlay adds, "When the UK started looking like it could be a success, we started looking at doing the same thing in Australia - which had eased off to a quarter or less, by volume, as what it had been at its peak. That concept developed from a joint venture contract brewing operation into a brew-under-licence model. We grew 12x in the first year of this model."

Yeastie Boys now plans to use the same model to get into the US market.

Forget exports and bring the drinkers here

Beer Nation blogger Michael Donaldson says NZTE's report is solid work, but he also cautions that it's hard yards ahead for anyone who wants to export.

"While New Zealand produces amazing hops there's nothing necessarily unique about our beer. Other countries have access to our hops so can brew similar beers to New Zealand Pilsners and IPAs," Donaldson says.

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"There's nothing we can do with beer that someone else can't do on the other side of the world - unlike Marlborough Sauvignon Blanc, for example.

"And shipping beer is bad for the beer. It seems a tough ask to invest in export and I know many breweries have pulled away from it - but then again, if the demand is there, someone may as well make a buck."

Beer Nation blogger Michael Donaldson: NZ beer doesn't have any globally unique styles - in constrast to say, Marlborough sav blanc in the wine world. Photo / Michael Craig.
Beer Nation blogger Michael Donaldson: NZ beer doesn't have any globally unique styles - in constrast to say, Marlborough sav blanc in the wine world. Photo / Michael Craig.

Yeastie Boys' McKinlay puts it more bluntly. When contacted by the Herald, he was working on a keynote speech for an industry conference.

"It will be based around my hypothesis that export is dead. It's not dead, of course, but it is dying and it is almost certainly unsustainable," he said.

Donaldson thinks a better use of government dollars would be encouraging beer tourism - "to get people to sample the beer in its best environment".

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