By James Atkinson

Access to capital to create new brewing capacity is the single biggest challenge facing Australian craft brewers as they seek to grow their share of the total beer market to five per cent and beyond, says Stone & Wood co-founder Jamie Cook. 

At the recent Craft Beer Industry Association (CBIA) conference, Cook said it will take a lot of extra brewing capacity for the sector to continue to grow its share beyond its current three per cent.

“When you look at the numbers, you can easily roll off the tongue from three per cent to five per cent, it just sounds like a little number,” he said.

“When you actually look at the volume it’s about 85 million litres that people in this room are going to have to produce to get there.”

“If you use the old formula of $1 per litre, in terms of investment, that’s a lot of money to invest in an industry to get that 85 million litres,” said Cook.

He pointed out that there would have to be 400 small brewers producing 200,000 litres a year to create 80-plus million litres of new brewing capacity.

Meanwhile, he said the major brewers can easily switch from brewing something else to producing more craft beer, without any additional capital expenditure.

“They’ve actually got the capacity to produce it and we don’t, yet. They’re really the hard cold facts,” he said.

“Getting it together to be able to attract investment to be able to build that capacity is the largest challenge we have to face.”

Craft brewers upbeat despite challenges

In spite of any challenges facing their businesses, Australia's craft brewers are generally positive about their future prospects, according to a recent Roy Morgan Research survey, commissioned by the Craft Beer Industry Association (CBIA).

CBIA members believe there are opportunities over the next few years for them to increase their market share, explore export opportunities and continue to improve consumer awareness of craft beer.

Aside from capital constraints, the brewers nominated excise duty, rising costs and tough competition from multinational brewers as being among their chief concerns.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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