Partners in life and business, Lee-Ann Scotti and Michael O’Brien specialise in esoteric Belgian-style beers. 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. Photo / Waitaki NZĬraftwork is an incredibly small brewery and bar set in Harbour St, the heart of Oamaru’s Victorian precinct. Owners and brewers Michael O'Brien and Lee-Ann Scotti from Craftwork Brewery, Oamaru. Along the way, it has forced big breweries to re-evaluate their own offerings. 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.ĭriven 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. To some extent, Covid delayed the onset of an overdue rationalisation, and now the tougher economic times have pushed many to the limit.īut this is also part of a journey for an industry that is morphing from a revolutionary subculture into the mainstream. 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. 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. 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. A post-Covid hangover, and its lasting impact on hospitality, coupled with rampant inflation, have combined to put unbearable pressure on those margins.įor 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. 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.īeer is an industry that trades on tight margins and demands high volumes for assured success. 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. 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. In an increasingly crowded and colourful market, frequented by promiscuous consumers wanting new experiences, Epic struggled to keep pace. Founder Luke Nicholas was the leading hop prophet and many followed his mantra of “need more hops”. 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.
The most striking failure in recent times was Epic, going into liquidation in July.
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. 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.
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