20 June 2018
"...We all have an obligation to improve our quality and consistency..."
Slow food and all that follows has afforded an intimately integrated supply chain from farm to fridge, in a paradigm shift of consumerism not seen for generations. It’s been a long time since consumers were so intimately exposed to the organisational vision of their raw material suppliers and all intermediates involved in getting products into their homes. Creating a sense of social responsibility, sustainability and environmental accountability, the slow food revolution has provided a thirst for product differentiation based on the ethos of the companies providing these tangibles. The level of scrutiny applied to organisational dynamics, ownership and corporate providence has never been seen before. In a rapidly saturating market it has also become necessary to differentiate products based on facets that are deemed important by consumers.
Independent beer has followed a similar trajectory, arguably being one of the vanguards of the slow food movement. Consumers do care about the organisational governance of local breweries and some, not all (or even a majority but a growing segment), will base purchasing decisions on these structures. In a crowded marketplace, where everyone shouts “WE ARE CRAFT BEER, ENJOY OUR CRAFT BEER”, regardless of ownership, the water has been muddied. Consumers may be unsure about the important elements of brewing location and ownership when they purchase products.
Recently, the Independent Brewers Association (IBA) has launched an Independence Seal, which is only available for members of the IBA. And the only way you can be a member of the IBA is to be based in Australia, produce less than 40 million litres of beer per year, and not be owned by more than 20% by any brewery that does. This is a really terrific outcome for the independent breweries of Australia and we would encourage you all to look out for the seal as it gets rolled out in the coming months, it will certainly be on our own products.
Just as there are many different ways to craft a pale ale, there are independent brewers with many different ownership structures. From small gypsy brewers, owned by a couple of mates, like Brewtal Brewers, through to global breweries that function independently but also have shareholders and AGMs, like Brewdog. Even that distinction may be important to some. What independent does not correlate with, however, is quality. Even non-independent multinational breweries, owned by an “integrated beverage company”, make award winning pale ales, for example. And indeed, the resources they command make such outcomes easier, from one perspective. So, consumers will even overlook quality (well, at least consistency) for supporting independent breweries. Why would they possibly do that? Well, from Newstead’s perspective, we make beer in Brisbane for the people of Brisbane. We employ 70 people who live in Brisbane and surrounds. We operate two pubs in Brisbane, serving the good folk of Brisbane, seven days a week. All the profits (for the sake of the argument let us just assume there are some) stay in Brisbane, getting reinvested in Brisbane projects. We are involved in the training and education of Brisbane brewers and bar staff. When you enjoy a beer from a global company the revenue does get invested in the local people who placed that beverage into your hands, from bar staff to distribution suppliers to the enthusiast that works at Dan Murphy’s. The profits, however, do not. A small, but apparently important, distinction.
There is a growing fallacy that the beer market in Australia is a David and Goliath type malarkey. The richness of brewery structures is an inherently important facet of our exciting and rapidly expanding industry. Large multinational breweries, that have been operating for decades, have many important learnings that they pass on to nascent breweries. We all have an obligation to improve our quality and consistency and the “big” breweries certainly share insight in how to do that. In conjunction, global beer corporations that have bought previously independent Australian breweries, such as Pirate Life or 4 Pines, have drastically improved their capacity for logistical reach. That simply means there is more of the same great beer they produce available to a wider market, increasing the notoriety of good beer in general. And that is great for all of us.
Ownership is but one factor of many that create the brand and voice of any brewery. It is critically important to some consumers, but not a significant number yet, or at least not in a manner that significantly contributes to purchasing choice. For what it is worth, Newstead is 100% Brisbane owned and brewed. We have four owners; three members of the Howes family and Michael Conrad, all born and bred in Brisbane. We are proudly independent.
Mark Howes, CEO, Newstead Brewing Co.