An old Air Force hangar at Catalina Bay, Hobsonville Point is about to be reborn as a craft beer hall and eatery.
The cavernous, 1500sq m Little Creatures craft brewery will open on Waitangi Day, February 6, on the heels of a new weekend ferry service which has been partly funded by locals in the tight-knit community in Auckland's northwest. The ferry service starts today.
Lion is spending $20 million on the project, between the fitout and a 10-year lease, says managing director Rory Glass, and it will employ about 100 staff.
A second floor has also been added to the hangar by developer Willis Bond. That will be used as a co-working space in the manner of Generator or BizDojo, who cater to startups and others who want shared office space or a place for meetings. Willis Bond is also developing the 1.8-hectare stretch of waterfront that surrounds the hangar. The area already includes the recently opened Thai restaurant Siamese Doll and Fabric (which the Herald dubbed "one of the most perfectly formed cafes you will find in this city").
Little Creatures features a brewery capable of producing up to 180,000 litres of beer a year - about 90,000 six packs - plus pizza and fish and chip shops and a cocktail lounge with "Italian-themed" shared plates.
Customers will also be able to buy beer to take home - a big deal for locals out west, where supermarkets are dry and the Portage & Waitakere Licensing Trusts directly control pricey bottle stores. Little Creatures' manufacturing licence puts it beyond the trusts' reach.
Lion is also looking beyond beer. Just before Christmas, the brewer bought iconic Wellington coffee roasters Havana, and Little Creatures will open at 7am to sell coffee to locals on their way to the commuter ferry.
"Today you are just as likely to catch up with a friend over a coffee as you are over a pint of beer or a glass of wine," Glass says. (Lion also owns Wither Hills, Daniel Le Brun and recently bought a stake in Foley Wines, which includes Mt Difficulty and Mt Difficulty's step-down brand Roaring Meg in its stable).
"In fact people will often move from one to the other. It made sense for us to develop a coffee offering with a premium, edgy brand that complements our portfolio."
The Havana buyout did draw some sniffs on social media, but Lion says it is letting co-founder Geoff Marsland and his wife Lizzy Marsland run the 30-year-old outfit as an independent division.
The new venue will also sell kombucha from another recent investment, Tauranga's Good Buzz, in which Lion now holds a 25 per cent stake.
There's also a wooden fort inside and sandpit going in outside.
"For parents with young families, it's a chance for them to enjoy an adult experience without leaving the kids at home," Glass says.
"We want it to be family friendly. We want people to come down and catch up for coffee. We want people to bring their kids here to have fish and chips. We've got all-day dining. We've got an Italian bistro, we've got a kids' play area, we'll have a sandpit as well. And of course there's the main dining hall."
"We'll have a community engagement manager. That's very unique," Glass says. In Australia, Little Creatures has dished out grants for community projects. Here, community features will include a wall where local artists can display and sell their work, commission-free.
Head brewer Udo Van Deventer also wants to have regular teach-ins with locals. He'll be brewing Little Creatures' regular lineup, but also brews specific to Hobsonville Point. The first will be "Catalina Bay Ale," launched around March.
Van Deventer plans to follow that up with a gruntier double-hopped IPA (Indian Pale Ale). He says the new brewery is "wildly over-spec'd," so he has a lot of capability to experiment. He can also brew in small batches of as little as 14 kegs, which again will help him to mix things up. He says he's keen for locals to chip in ideas.
Craft beer gold rush
Lion and rival DB have developed a taste for craft beers because it's the fastest growing segment of the market - although that growth is flattening out.
Over New Zealanders are drinking a lot less beer, according to Statistics NZ figures. As a proportion of the total volume of alcoholic beverage available for consumption, between 2002 and 2017, beer decreased from 72 per cent to 61 per cent. But within that, the number of 5 per cent+ alcohol beers has risen.
The rise of five per cent-plus brews has been seen by media as a sign of the rise of craft beer. And it is to a degree. But it's also a sign of the halo effect of craft that has also lifted "premium" beers at that slightly higher alcohol level such as DB's Heineken and Lion's Steinlager. And the picture is coloured by the rise of so-called "session beers" as craft brewers compliment the 8 per per cent hop monsters they were known for with 4 to 5 per cent brews that suit a longer drinking session and are in simpatico with tighter drink-drive laws.
Glass says while mainstream local beers have had only slight growth in recent years, and international beer sales have declined slightly, craft beers have been booming.
"We've seen growth of about 30 per cent, 20 per cent. Now we're down to about 10 per cent growth - but that's still growth. New Zealand is the most developed craft beer market in the world. About 17 per cent of all sales come from craft beer. It's really important that we're involved in that. That's one of the key reasons we're opening Little Creatures at Hobsonville Point."
DB Breweries boss Peter Simons doesn't want to give figures, but says his company has seen a similar trajectory for craft beer growth.
The craft boom has seen both Lion and DB get out their chequebooks.
Recent craft beer deals have seen DB pick up Kapiti boutique beer maker Tuatara for $30.5m, and Lion's $25.1m buyout of Upper Hutt's Panhead, $8m purchase of Dunedin-based Emerson's, and the acquisition of Christchurch's Harringtons in August for a yet-to-be-disclosed sum.
Little Creatures was founded in Fremantle in 2000 by brewer Phil Sexton, restaurateur Nic Trimboli and ad man Howard Cearns, who set up shop in an old crocodile farm - setting a trend of quirky venues in years to come.
In 2012, Lion paid A$256m to convert a minority stake into outright ownership.
Glass says the decision to open the Little Creatures brewery at Hobsonville Point was partly because of the beer's increasing popularity in New Zealand. It is now sold in more than 400 venues.
"Craft has been absolutely fantastic for beer. It's got people interested in beer again. It's got people talking about beer again in much the same way wine did a number of years ago. So being involved in that craft beer market has been really important for Lion," Glass says.
The craft boom has also been good for both the major players' bottom Iines - both through their craft beer acquisitions and by boosting so-called "premium" mainstream beers.
In 2017 (the most recently reported year to the Companies Office), Lion's net profit rose 11.5 per cent to $38.7m on sales that increased 5 per cent to $561m. DB's profit rose 12 per cent to $30.4m on revenue that rose 3 per cent to $514m (Lion is owned by Kirin, and DB by Heineken).
There are just under 200 small breweries in NZ, and some big names are still independent, including Epic, Yeastie Boys and Garage Project. But with growth slowing - an ANZ report calls the market saturated - the appetite for deals could be diminishing.
Glass says he never speculates on possible acquisitions, but does dampen expectations, saying, "I would say given we've just picked up Harringtons and are just about to launch Little Creatures, that we've got a lot on our plate at the moment. So we're certainly not out there looking at anything right now."
Similarly, Simons says DB's short-term focus is on building up Tuatara. In the immediate future, DB has no plans to open an equivalent to the Little Creatures at Hobsonville Point.
Both Simons and Glass say while craft is still hot, healthier options are emerging as the next big thing - low-carb, low-calorie and low- or no-alcohol beers. Simons calls it the "better-for-me" craze.
Every craft beer buyout generates a degree of backlash on social media from the diehards and Little Creatures got its share of flak.
But it's also had support from perhaps surprising quarters.
While some craft beer aficionados look down their noses at the label - whose range is definitely at the more accessible end of the craft spectrum - independent beer writer Michael Donaldson says he has a special place in his heart for one of its brews.
"I have a soft spot for Little Creatures Pale Ale as it was one of the fork-in-the-road beers for me," the Beer Nation blogger and New World Beer & Cider Awards head judge says.
"A friend in Perth introduced me to it back in 2002 and it was a revelation. It felt very hoppy back then."
He adds, "there could be criticism directed at Lion for bringing in a 'foreign' beer to an already crowded market. No doubt Little Creatures will continue be added to tap offerings at some Lion-contracted bars alongside Emerson's and Panhead.
"This portfolio - alongside the traditional Speight's and Steinlager - is a carrot for Lion clients who might have been thinking of going independent in order to offer a broader range of beer to increasingly curious drinkers.
"This is, in turn, makes it increasingly harder for independent, small breweries to access certain parts of the market that are tied to Lion, DB or Independent. And that stifles the diversity on which the entire craft beer revolution was based.
"The flipside is that the Little Creatures bar is bringing good beer to a place where previously there was nothing - so it's a great asset to that community and will introduce a whole raft of people to new tastes and may set many of them on an exploratory trip that will lead to other, independent, beers.
"And the brew bar at Hobsonville is kind of the future of craft (for want of a better word) beer. It's about local, regional, community-based drinking establishments that encourage responsible drinking of flavoursome beer."
Better life after a buyout?
In the tech world, which I usually write about, it's the norm for a multinational to botch an acquisition, ruining both its product and culture.
Glass says Lion lets craft brewers stop worrying about the likes of HR, health and safety and capital raising, and get back to doing what they do best.
Donaldson agrees. He says Lion deserves congratulations for taking a hands-off approach to recent acquisitions Panhead and Emerson's, leaving the founders in control.
Yeastie Boys co-founder Stu McKinlay is on the same page. "I've seen improvements in the quality and consistency of almost all of the breweries I've known well who have sold, from Emerson's and Panhead in New Zealand, through to the likes of Camden in London," he says
"I've seen better working conditions, safer workplaces, and happier employees. It's not perfect but nor is it the end of the world that many people make it out to be."
"While consumers see high craft beer prices, and brewers or owners at beer festivals or other public events, the reality is that it's actually a very low margin game with intensive capital needs and high risks," McKinlay says.
The Yeastie Boys founder is charting an independent course, using crowdfunding to finance a push into the UK.
But he adds, "I have had friends who have sold their breweries and, without a shadow of a doubt, all of them have looked happier after the sale. They've gone from being business owners and project managers - and whatver other hat they might hold in the business - back to doing the things they loved when they got into the game: being brewers."