Can You Have Too Much Of A Good Thing When It Comes To Beer & Breweries?

Welcome back…did you see my Sierra Nevada Pale Ale 60 Second Beer Review last week?

Ever since I left my job with Lion beer and have been working out what my next career move will be, I have had friends and family say “why don’t you open a brewery”.

I know they mean well, but I sometimes wonder if they realise how much hard work goes into opening a brewery, and how you have to pretty much put your kahuna’s, and maybe even your home on the line to get one up and running. It was much safer and easier to start up this blog…but the rewards aren’t as great as producing your own brews!

I live in Tasmania and we have seen a mini explosion of breweries opening up in the last 12 months, there are over 20 now, and a couple more to come. It doesn’t sound like many, but we only have a population of 500,000 and they are spread over almost 70,000 square kilometres! I am absolutely loving the fact that these guys and girls are so passionate about beer that they are putting it all on the line to chase the dream of being a successful brewery owner. But then I stop and think about the reality of the situation they find themselves in and I worry for them.

Let’s break down a few stats for Tasmania and you might see why I am worried:

Total Population: 510,000

% classified as “Working” (15 – 64)*: 64.2%

% of Australians who had a drink last week*: 80%

*Source 2014-15 ABS Survey

For the sake of this example, let’s drop the number of people who might drink alcohol to 60% to remove anyone under 18. We also know that beer consumption is roughly 40% of the total alcohol market and craft beer is around 5% of the total beer market.

Let’s work back those numbers and find out how many Tasmanians might be interested in drinking craft beer…

Total Population: 510,000

Workers: 300,000

Drinkers: 240,200

Beer Drinkers: 96,000

Potential Craft Beer Drinkers: 5,000

Do you see why I am worried? How can we sustain 22 breweries in this state with such a small number of drinkers? It’s easy, I hear you say, can’t they just send their beer into Victoria? The answer to this is yes, they can, but at a pretty considerable cost.

Most new breweries are operating at pretty skinny margins, and they need to pay back their investment in all of that stainless steel. To make is worthwhile, they need to fill the container, which may be a challenge in itself considering that a 20ft container will take 20 pallets of beer. 20 pallets equates to 10,000 litres of beer, which is a hell of a lot of beer to package or keg for a small brewery, let alone carry the cost on the books until it is sold through to a distributor. Speaking of a distributor, there are commissions to pay there, plus the cost of the freight, costs to promote in another state…see where I am heading here?

I had a bit of a look at simlar numbers in the other states and came up with the table below (brewery numbers thanks to craftbreweries.com.au). I applied the same percentages to break down the numbers as I did with the Tasmanian example above.

So what do you think? Do I have cause for concern? I kind of think that I do.

Not only do the mainland breweries seem to have the advantage in terms of pure drinkers per brewery, but they also have more tourists to visit their sites and other options in terms of distributing their beers. I would just about put my kahunas on the line to say that it was cheaper for a Victorian brewery to send a pallet of beer up to NSW by road or rail than it was to get the same pallet out of Tasmanian and into Victoria.

I am not trying to be negative here, more trying to open up the conversation that compared to breweries in other states we may be doing it a little bit tougher, and maybe we need to work together to come up with a strategy to ensure the survival of all of our new breweries?

What is the solution? Well, setting up the new Tasmanian Independent Brewers Association (I just joined as an associate member), and the Tasmanian Beer Trail are a great way to help. We as the public need to make sure we support the quality beer festivals like The Esk & Tas Beerfest (note I left out that horrible swill fest from October last year), and on a more granular level, next time you buy a beer in a bottle o’, or in a pub, why not ask for something brewed locally and find out the story behind the beer? These new breweries that are starting up are producing great beers and have great stories to tell about how they came to be, invest in them so that they can invest in our state and our people.

Look, this is just one blokes opinion based on some pretty rough numbers, but I think there is some merit in the discussion and I am more than willing to help out my home breweries in whatever way I can. In fact, in the coming weeks I hope to speak to a few of the new guys to get their thoughts on this, and other issues. I have also had a chat with my mates at Batch Brewing in Marrickville to get some insight on how much hard work goes into starting a new brewery…look out for that next week.

If you have an opinion on what I have said today, I would love to hear it. And if you have an idea about how we can help support the local breweries, I would love to hear that too!

That’s it for this week…as I post this article, I am about to jump on a plane to Vietnam! I will be taking a short break and back online the week of the 25th of April with a follow up to this story, an interview with co-owner of Batch Brewing Company about the realities of starting a brewery.

In the meantime, why not have a look around the site for anything you have missed. Some of my most popular articles are show below, why not check them out!

As usual, don’t forget to follow me on Twitter and Facebook for all the latest beer news, and check out my YoutTube channel or Instagram feed for more fun. I will be posting on social media while I am away.

What did you think of my new 60 Second Beer Reviews? Look out for my review of Bridge Road Brewers Little Bling IPA this Wednesday, or check out the Classic Edition with Sierra Nevada Pale Ale below.

If you have any feedback for me, I would love to hear it, please leave me a comment or shoot me an email.

Cheers to Great Beers!