Craft beer is at a crossroads.
As a 10-year boom cycle reaches a plateau in a tightening economy, there’s been a spate of liquidations, closures and sales since the advent of Covid. These are the problems of a maturing market — and beneath the headlines there’s a confidence that craft beer can continue to bring innovation and change to the wider beverage sector.
The most striking failure in recent times was Epic, going into liquidation in July. The brand is synonymous with the craft revolution at the start of the 21st century, creating industry-leading beers such as Armageddon IPA and Hop Zombie. Founder Luke Nicholas was the leading hop prophet and many followed his mantra of “need more hops”.
In an increasingly crowded and colourful market, frequented by promiscuous consumers wanting new experiences, Epic struggled to keep pace. The brand has survived, the liquidators selling it to a joint venture between Hancock’s Wines & Spirits and The Russell Group, a construction company, but its near-demise is a cautionary tale for others.
Just days after Epic went into liquidation, Auckland brewery and bar chain Brothers Beer went into voluntary administration, sparking fears others might fail in a distressed industry.
It’s not a new story. Last year, Dunedin’s New New New closed after the owners couldn’t sell the brand, while previously Funk Estate went into liquidation and was picked up by Brand House, a business that also saved Renaissance when the highly-regarded Blenheim brewery hit the wall.
Beer is an industry that trades on tight margins and demands high volumes for assured success. A post-Covid hangover, and its lasting impact on hospitality, coupled with rampant inflation, have combined to put unbearable pressure on those margins.
For breweries, the price of everything has gone up: ingredients, freight, packaging, carbon dioxide and excise tax, while consumers are spending less thanks to inflationary pressures and higher interest rates. Like a game of chicken, many breweries have tried to absorb costs, not wanting to move first and give their competitors an edge in an industry where price is more important than brand loyalty.
They say beer is recession-proof, and largely it is, but craft beer remains a luxury item and when the perfect storm hit, sales dropped — down around 10 per cent over the past year.
On top of that there are underlying structural problems — there are simply not enough outlets, in the form of taps in bars and supermarket shelf space — for all the new breweries that have come online in the past five or six years.
To some extent, Covid delayed the onset of an overdue rationalisation, and now the tougher economic times have pushed many to the limit.
But this is also part of a journey for an industry that is morphing from a revolutionary subculture into the mainstream.
The past decade has been marked by unprecedented growth, with the number of breweries in New Zealand growing from around 70 to more than 200.
Driven by great flavour, amazing artwork, good back-stories and strong connections with a growing army of beer fans, “craft” — while still ill-defined — has grown its market share from about 5 per cent to 20 per cent. Along the way, it has forced big breweries to re-evaluate their own offerings.
At the height of the boom, Lion bought Emerson’s for $8 million in 2012 and paid three times that for Panhead in 2016, while DB bought Tuatara for $30m.
At the same time, keen punters have collectively poured more than $15m into crowdfunding campaigns for the likes of Behemoth, Parrotdog, Renaissance and Yeastie Boys, as well as the Port & Eagle brewpub in Kaiapoi, which was owned by the now defunct Eagle Brewing.
As the craft market settles into its fourth decade dating back to the creation of Mac’s in 1981, it continues to be the driver of innovation — pushing boundaries around flavour, packaging, processes and authentic story-telling — but adding layers of long-overdue business acumen to passion projects.
In the second part of a series on the alcohol industry these are the players who have either defined craft’s recent history or are setting out the road ahead.
Read also: NZ’s top liquor retailers
Craftwork is an incredibly small brewery and bar set in Harbour St, the heart of Oamaru’s Victorian precinct. However, their influence extends well beyond the Steampunk capital and they have ties right back to the early days of craft beer in New Zealand.
Partners in life and business, Lee-Ann Scotti and Michael O’Brien specialise in esoteric Belgian-style beers. From wild-fermented lambic-styles (think tart, funky, earthy, effervescent) through to elegant, spritzy farmhouse ales and texturally rich quadruples, they are dedicated to the types of beer beloved by nerds and other brewers.
They are micro, niche, and low-key but their influence on the wider craft beer scene in New Zealand is reflected in the fact that O’Brien, a bookbinder by trade, was an inspiration for Emerson’s classic session ale, Bookbinder, which was made for the Oamaru Victorian fair in 1995.
O’Brien and Scotti started brewing in the basement of Scotti’s Oamaru house in what was nothing more than an elaborate homebrew operation. They now “own” tank space at Rhyme X Reason brewery in Wanaka for the beers that don’t rely on wild yeast for fermentation.
As the craft geek’s tourism destination of choice, and adored by their peers in the business, Craftwork are one of Oamaru’s — and beer’s — key tourist attractions.
State of Play is the first New Zealand brewery brand to be totally focused on non-alcoholic beer.
Launched quietly in April 2022 with a non-alcoholic IPA brewed at bStudio in Napier with recipe input from the team at Wellington’s Fortune Favours, the brand is the brainchild of Grant Caunter, who spent 25 years working for DB and Heineken, but who reassessed his life during the pandemic and decided to give up alcohol to lose weight.
He spent four years with Heineken based in Amsterdam working as their head of craft and specialty beer. Before he left Heineken he’d worked on a non-alcoholic beer for prominent California-based brewery Lagunitas, now owned by Heineken.
The pandemic changed a lot of things for Caunter, one being the decision to drop his excess weight. Tipping the scales at 145kg, he realised his life needed to change and losing weight “meant more than having a beer”.
Giving up booze while living in Europe wasn’t too hard, he says, because “the zero section in Europe is three times bigger than the craft section” and he was able to find plenty of good non-alcoholic beers. Towards the end of 2021, he was 45kg lighter and no longer suffering from sleep apnea. The change in lifestyle also helped him decide to make a huge leap of faith in his work life, leaving Heineken and returning to New Zealand to set up State of Play.
Since then he has become a one-man ambassador for the “lifestyle” of not drinking, talking about his health goals as much as he talks about his beer.
The lead brewer and co-founder behind the ever-growing Hamilton chain Good George, Brian Watson is a key figure in the New Zealand industry.
He’s a respected judge, president of the Brewers Guild of NZ, the industry body that represents all breweries in New Zealand, and with a successful side business called Smart Brew.
Watson was the driver behind Good George in 2012 when he returned from overseas and convinced Hamilton hospitality stalwarts Jason Macklow and Darrel Hadley to start a brewery and taproom.
Named for the old St George’s church in which they set up shop, Good George has added more than a dozen venues to its chain, mostly in the Waikato-Bay of Plenty region, but they have two bars in Auckland and have just opened in Napier. The brewery has grown to such a size that former TVNZ boss Kevin Kenrick is now the chairman.
Watson, who started out at DB many years ago before working around the world, created Smart Brew — an automated fermenting system that allows bars and restaurants to create their own beer without having to worry about the most complicated and time-consuming aspect of the brewing process, making the wort (raw beer, pronounced wert). Smart Brew systems ferment the wort to a finished product on-site and are self-cleaning, taking care of the other most tiresome aspect of brewing: cleaning.
Richard Emerson almost single-handedly changed the way craft beer was perceived in New Zealand, pushing true-to-style flavour-driven beers in the early 1990s at a time when “craft” didn’t exist — back then it was “microbrewing” and small breweries were often doing small-scale imitations of what big breweries made, loosely classified as yellow, amber and black.
Born profoundly deaf after his mother contracted Rubella while pregnant, he’s the only brewer in New Zealand to be considered worthy of his own biography, with Penguin Random House publishing The Hopfather in 2019, which details the battles he had to overcome on a personal and business level to create Emerson’s.
He started Emerson’s in 1992, backed by his parents Ingrid and George, and a phalanx of friends and family who chipped in as shareholders. The brewery was sold to Lion in 2012 to secure its legacy and to reward those loyal shareholders for their contribution over the previous two decades.
Emerson had a deal to stay on for at least five years post-sale but shows no sign of leaving, and is the ultimate brand ambassador, giving credence and mana to Dunedin’s second-biggest brewery. Since the sale, Emerson’s has grown to be one of the country’s leading craft brands and Emerson himself remains its defining face.
Self-styled as @mamabeer on Instagram, Tracy Banner is the mother of the brewing nation, being one of the country’s most experienced brewers with 40 years in the game this year.
Born in England, Banner started her career with two of Britain’s biggest breweries, Greenalls and Bass. She came to New Zealand in 1994 and worked for Lion Breweries, Mac’s and Speight’s, where she was that brewery’s first female head brewer. At Mac’s she brewed the first recognised fresh hop beer, Mac’s Brewjolais.
She started Nelson-based Sprig & Fern with husband Ken in 2005 and the brand has built its reputation and volume on a series of taverns through the Nelson region as well as in Wellington and Christchurch. Each of the 14 taverns is individually owned but is imbued with a similar spirit.
Banner is probably New Zealand’s most recognised judge internationally, and this year was invited to judge at the final stages of the world’s most prestigious competition, the World Beer Cup.
She’s closely connected to New Zealand’s renowned hop breeding programme and is often the first to brew beers with new varieties of hop ahead of their commercial release. In 2019 she was made an honorary fellow of the Brewers Guild of New Zealand — the highest individual honour in New Zealand brewing.
Scott McCashin is the son of Mac’s founders Terry and Beverley McCashin and while he hasn’t been in the beer industry for life, he’s lived adjacent to brewing for most of it.
In 1981, Mac’s was the first independent brewery to break the Lion-DB duopoly that had dominated New Zealand beer in the postwar period. When Mac’s was sold to Lion in 1999, the family had their hands tied for 10 years until Lion relinquished its lease on the Stoke brewery and the family re-started it as McCashin’s, brewing a new brand, Stoke.
Scott McCashin worked in the original Mac’s brewery during the university holidays and when the family returned to brewing he came back to work alongside brother Dean and sister-in-law Emma. He stepped up to managing director in 2018 before taking over full ownership of the brewery and the Stoke brand in 2022.
Not only does McCashin’s power out a lot of well-priced Stoke beer, but they also brew under licence for Moa, producing most of the beer sold by that brand. But the icing on the cake for McCashin’s is the joint venture with “That Guy” Leigh Hart and his Wakachangi lager.
In total, the brewery pumps out between 7 and 8 million litres of beer per year, making it one of the biggest “craft” producers in Aotearoa — comparable to the likes of Emerson’s or Panhead but without the fanfare.
There’s an in-joke when it comes to the annual New Zealand Beer Awards: that the Sustainability Award should be renamed the Sawmill Brewing Award given how many times the Matakana outfit has won the gong.
As New Zealand’s only B Corp-certified brewery, Sawmill have a lot to boast about. B Corp certification is a rating conferred by global organisation B Lab which measures social and environmental performance against a rigid set of criteria.
Sawmill is the only brewery in New Zealand to achieve B Corp status and is one of just 5700 certified companies across 185 industries in 85 countries. As such they set a standard for others.
Sutherland and McKay bought Sawmill in 2010 after the brewery was started inside the Leigh Sawmill Café by Peter Freckleton. They have since moved it up the road, closer to Matakana, and transformed it into an example of sustainable practice. So much so, they were selected by the Energy Efficiency and Conservation Authority (EECA) as a pilot brewery to investigate the potential for energy and carbon reduction for the brewing industry as a whole.
Beyond being good people, they make top-quality beer with a focus on New Zealand products, and won a trophy with their XPA at the New Zealand Beer Awards in August.
Set up in Kingsland just six years ago, Urbanaut has become one of the fastest-growing little breweries in the country thanks to its uncanny ability to tap into a Millennial / Gen Z audience that many other breweries can’t talk to.
The self-styled “party” brewery was founded by three friends who grew up together in Marton.
Bruce Turner is the one with the beer trade experience, having worked for one of the world’s most respected breweries, Fuller’s, in London before moving onto Meantime in Greenwich, one of Britain’s most influential craft breweries.
Thomas Rowe and Simon Watson come from an entrepreneurial background, having made news when they ran property development company Evoke Property, which was most famous for buying a so-called “hovel” in Grey Lynn, doing it up and selling it for more than $2.8m.
The trio are pushing boundaries at Urbanaut with some of the most creative offerings in the craft beer scene, including their popular “beer blender” series which wraps two different cans into one sleeve with the idea of creating three drinks, one from each can and then the two blended together.
They’ve made a success of 250ml cans for big ABV beers and are pioneers of super-tasty “low carb” offerings such as their Miami Brut Lager and Copacabana Brut IPA.
Behemoth know how to get seen, heard — and most importantly, tasted. The kings of haze, fruit and cultural references have traded on their huge popularity by going to the crowdfunding well three times in the space of three years (2019, 2020 and 2022).
Founder Andrew Childs is a literal larger-than-life character, standing almost 2m tall with a penchant for TV shows, movies and politics. Behemoth gained global attention for their Dump The Trump IPA, a beer that saw their Facebook inundated by angry American conservatives. From The Simpsons to Friends to Pulp Fiction, there’s no entertainment from the late 20th century safe from a Behemoth label.
Childs started his brand when he was one of four winners of the Wellington In A Pint competition which asked home brewers to capture the essence of Wellington in a beer. Child’s homage to the then-mayor was called Celia Wade-Brown Ale and it set the tone for literally hundreds of puns that have followed in the subsequent decade.
The other half of Behemoth is Hannah Miller Childs, who before she married into the beer business had built her own popular brand, A Lady Butcher. The pair have created Churly’s, the spiritual home of Behemoth, at the top of Auckland’s Dominion Rd and have other bars inside food courts in Titirangi, Auckland and Willis St in Wellington. Together they are the most powerful husband-and-wife team in beer.
Mike Neilson is the envy of just about every other brewer in the country after he sold Panhead Custom Ales to Lion in 2016 for a total of $25m ($15m upfront and more contingent on performance over the subsequent four years). The asking price trebled what Lion had paid for Emerson’s in 2012.
Described at the time as a “runaway train” by Lion’s then-managing director Rory Glass, Panhead had an uncanny ability to cut across demographics and create passionate fans from hipsters and tradies alike. That was driven off precisely executed “petrolhead” branding married to excellent beer, with Panhead Supercharger American Pale Ale the defining craft offering of the mid-2010s.
Neilson, who learned his craft at Tuatara, took an aggressive approach to pricing with Panhead, offering his core range in clearly defined six-packs at a price few other breweries of a similar size could match. Supercharger (the orange one), Quickchange XPA (blue) and New Zealand’s most-awarded beer, Port Road Pilsner (yellow), redefined the craft offering in the supermarket in a way that still resonates today as supermarket aisles are filled with well-priced six-packs of super-flavoursome beer.
Panhead continues to thrive in the Lion years and while Neilson is not as visible as he once was, he casts a giant shadow across the industry.
While craft beer is often associated with the words like “hip”, “cool” and “urban”, Wellington’s Parrotdog have cornered the market in “nice” and “suburban”.
They’ve been able to stay at the cutting edge of independent brewing while creating a vibe of carefree Sundays on the lawn with friends and a few bevvies.
Where other breweries are delivering a peacock’s tail of colours and intensity to the shopping aisles, Parrotdog are pared back and unassuming. And yet they’ve managed to turn themselves into a giant among the independent craft breweries, second-only to Garage Project in terms of the volume of beer put into shopping carts.
The key to their success is no one thing, but they certainly caught a large wave with their Birdseye Hazy IPA, which they launched during the Covid pandemic and borrowed from the Panhead playbook by pricing it aggressively in the six-pack format, just as Panhead had done with Supercharger.
That beer found itself at the confluence of three trending rivers — hazy, six-packs and price. It got so big it became more than half their production, and that in part drove their third crowdfunding campaign which raised more than $2m in 2023 as the brewery invested in further growth.
With a tight core range, clear branding and inherent likeability, Parrotdog reach far and wide with a gentle touch.
Garage Project is the ultimate craft beer brand. In the 12 years since they started in an abandoned petrol station in Wellington’s Aro Valley, they have become a globally-recognised brand, adored equally in Aro St and America.
Their brewing business is divided across three sites: the original former petrol station handles the new and innovative traditionally-fermented beer; a massive contract brewery, bStudio, some 300km away in Napier looks after the high-volume, core range; and their Wellington central Wild Workshop produces wild-fermented ales, barrel-aged beers and natural wine.
Craft beer in cans? They weren’t the first, but when GP moved to cans, the rest of the Kiwi brew scene were dragged along in their wake. Amazing artwork on cans? They were ahead of the curve and now everyone follows suit.
They weren’t the first craft brewery to produce a non-alcoholic beer, but their Tiny gets disproportionate attention and has increased the noise in the non-alcohol space. They have led the market in collaborations — pairing with popular chocolate maker Whittaker’s, Proper Crisps, the New Zealand Ballet, theatre groups, festivals ... and they are responsible for an entire city’s worth of restaurants making burgers during the Wellington on a Plate festival. They’ve also released their own book, The Art of Beer, featuring their can art and posters.
While they are marketing geniuses, they are also brewing gods. At the recent New Zealand Beer Awards they were crowned Champion Large Brewery for the third time in a row, beating Lion, DB and Asahi (formerly Independent) for that title. They got a medal for every one of the 26 beers entered, which given the often fickle nature of beer judging is beyond phenomenal. They are the only Kiwi brewery to have won two medals at the world’s toughest beer competition, the World Beer Cup.
And on the Untappd social beer reviewing app, they provide nine of the top 10 highest-rated beers in New Zealand.
They are the very definition of craft beer in this country.
The industry faces challenges but hopes to bring newcomers and veterans together.