New Zealand's brewing industry is growing and now worth $2.7 billion, an increase on the $2.3b it was valued at last year.
According to a new industry report by the New Zealand Institute of Economic Research (NZIER), New Zealand now has 257 breweries, and brewers added more than $630 million to gross domestic product in the 12 months to March 2020.
The industry supports 7000 jobs, employing 2200 people directly, and contributed $810m in GST and exise tax in 2019.
On-licence sales of beer accounted for $1.7b while supermarkets and liquor stores accounted for $1b worth of sales in the year. On-licence premises sales account for 60 per cent of all beer sales by value, but store sales dominate by volume.
An additional 11 breweries have launched over the past year, with the number of breweries per capita the highest since 2000. New Zealand now has more breweries per capita than Britain, Australia and the United States, the report outlines.
While the figures presented in the report were positive and demonstrated a healthy brewing sector, Dylan Firth, executive director of the Brewers Association of NZ, said this was before the Covid-19 pandemic rocked the economy.
The report found that the closure of bars and restaurants alone due to the first Covid-19 lockdown cost the country an estimated $300m in sales.
Firth said he did not expect that number to be so high, and it would take the industry a couple of years to recover, especially if the borders remain closed to tourists.
Tourists spent $400m on beer in the year to March 2020.
"We won't know the true effect until the end of March next year, but it looks like it is going to be a pretty busy summer; Kiwis are out spending money, people are travelling around a bit so there is a bit more of that spend," Firth said, adding that Kiwis were spending up large and would hopefully make up some lost revenue that would otherwise be footed by tourists.
Breweries in regions such as Hawke's Bay and the Wairarapa were experiencing good growth since the end of lockdown, Firth said.
"Looking up until March, we were in a really good position, things were on the right track. Most of this year and into next year will be a tough one for a lot of [businesses] and the sector probably won't fully recover for a couple of years."
The New Zealand brewing industry uses $24m worth of hops annually, most sourced from the Tasman region.
Local brewers purchased $456m of intermediate products from local suppliers in the last year, ingredients accounted for $58m, while kegs, bottles and packaging accounted for an additional $210m.
Craft and lighter beer options have been the fastest-growing beer segments over the past five years, and low and no-alcohol beer has grown 240 per cent between 2015 and 2019.
Low and no-alcohol beers have grown 256 per cent over the past five years.
Young adults are now drinking less, in line with global industry trends. Ministry of Health data shows there has been a 6.5 per cent decline in alcohol consumption by people aged between 18 and 24, 4 per cent decline in those aged 25 to 35 and 2.3 per cent decline among those aged 35 to 44 since 2015-16.
"Some of the interesting things that we've seen is the changing behaviours of consumers; people are looking for different products and new styles," Firth said.
"We thought the growth of low and no-alcohol beers was pretty big last year but again this year the growth is showing an upward trend - that's not just people deciding that they want to come into the market, it's people changing their habits, consumers saying that they want to go for a lower alcohol option, and I think that will continue to grow."
This is a global trend reflected in a general movement of consumers being more conscious of their alcohol consumption, largely driven by the younger and millennial generations.
On Friday brewing and hospitality company Moa Group reported a net loss of $415,000, an improvement on the $1.6m loss the previous year, in the six months to September 30.
In the six months, the group, which owns and operates restaurants and bars across New Zealand and Moa-branded beverages, reported unaudited operating earnings of $686,000, up from $333,000 in the same period a year earlier. This year's earnings come off the back of total revenue of $9.9 million.
The group said trading had continued to improve heading into the Christmas period, with sales beating expectations.
Moa Group executive chairman Geoff Ross said 2020 continued to provide significant challenges.
"While the hospitality industry is one of the more at-risk sectors, the board are confident in the cautious approach management have taken, while taking advantage of the opportunities and upside where available. We remain committed to delivering value for shareholders and continue to explore growth opportunities in the hospitality sector."
Moa continues to explore "strategic options" for expansion. "The solid trading performance for the six months, in spite of the difficulties in the brewing business, demonstrate that the underlying operations of the group are well established and provide a good base to allow the group to take advantage of other opportunities where they arise," the company said.