New Zealand's beer industry worth $2.3 billion

Author
Aimee Shaw,
Section
Business,
Publish Date
Monday, 18 February 2019, 2:40p.m.
There are 218 breweries in New Zealand, an industry report shows. Photo / Getty Images
There are 218 breweries in New Zealand, an industry report shows. Photo / Getty Images

New Zealand's brewing industry is worth $2.3 billion and there are now more breweries per capita than anywhere else in the world.

According to an industry report put together by the New Zealand Institute of Economic Research (NZIER), New Zealand has 218 breweries - more per capita than the United Kingdom, Australia and the United States.

The beer industry contributed $646 million to GDP in the year to March 2018, made up of $331m in GST and $315m in excise tax. The industry employs approximately 22,000 people.

Brewers Association of New Zealand executive director Dylan Firth said the beer industry was valuable to the economy, financially and socially.

Visitors to New Zealand spent $242m on beer last year, and Firth said increasingly tourists were coming to the country specifically for beer-related tourism.

The report shows the country's beer industry has grown rapidly in the past five years, particularly the craft beer and low-alcohol categories, at a rate of 13 per cent each year since 2016.

Sales of beers at on-licence premises accounted for 60 per cent, or $1.4b, of all sales last year compared to sales through supermarkets and bottle stores.

New Zealand has 4.6 breweries for every 100,000 people in the country. Britain has 3 breweries for every 100,000 people, Australia 2 per capita and the United States 1.96.

Some states in the US, such as Washington and Oregon, have higher numbers of breweries per capita, but overall as a country New Zealand has more.

"There's been a big burst of breweries opening in the past five to 10 years ... and a lot are moving to the craft model where a lot of beer is sold on site, to the customer direct."

Growth in the industry had "slowed a little bit" and overall consumption is down slightly but the value spent on beer remained high, Firth said.

"It's a changing market dynamic - people are spending more on less. It's kind of like the wine industry 20 years ago, when people started appreciating spending a little bit more on a [premium product]."

Wellington and Auckland have the greatest concentration of breweries, and increasingly more breweries in Dunedin and Christchurch are popping up.

The craft beer segment of the market has been growing rapidly since 2008 and last year represented 10 per cent of all sales, the report outlined.

"I don't think we've reached peak craft yet. Craft isn't the biggest segment of the market - it's relatively small. We see craft growing and we see other areas growing like the low and no-alcohol beers."

Despite craft's exponential growth, standard pale ales remain the breadwinner of the industry, the report outlined. "Craft will start eating into that a little bit more but it will reach an equilibrium."

Firth said while he did not foresee weird and wonderful flavoured craft beer overtaking sales of the standard brews but said the alternative flavours were an innovative way to get people talking about brands and trying different brews.

"In terms of quality and the beers we produce, I think we're punching well above our weight," he said.

Just 10 per cent of beer produced in New Zealand is exported offshore, compared to 70 per cent of wine produced in New Zealand.

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