2017 was another big year for the Australian Craft Beer industry with:
- 61 new craft beer breweries opening
- 16 closing and being removed from our Brewery List, and
- 4 selling out to Corporate Craft or larger businesses.
This pushed the total number of breweries on our Brewery List to 528.
New Craft Beer Breweries
Of the 61 new breweries, there were:
- 21 in Queensland
- 14 in New South Wales
- 12 in Victoria
- 5 in Western Australia
- 5 in South Australia
- 2 in Tasmania
- 2 in the ACT
The 61 new breweries represents an 13% increase in the total number of breweries and continued the trend of the past 3 years of a new brewery opening every 6 days. A rate of growth that still shows no sign of changing.
Of the 61 new breweries:
- 15 were contract, or gypsy brewers
- 38 were small breweries. These are the nano and pub breweries
- 8 were medium size. These are the micro-breweries producing between 50,000 and 300,000 litres per year.
We removed 16 breweries from our Brewery List last year. Of these, one re-opened under a new name and ownership whilst the others ceased trading.
This failure rate is 3.5%. A very small failure rate for any industry sector, where, on average, the failure rate in the first year is 20%.
The reasons for closures seem not to be related to a lack of demand for the beers, or anything related to increased competition from all the new breweries but to two main factors: contract breweries that did not want to continue and expand either due to lack of finance or time/interest of the owners, and individual business management reasons that resulted in the failure and closure of the business.
The end of the 2017 saw some big announcements and additions to our Corporate Craft Beer Breweries list with 4 Pines and Pirate Life Brewing both selling to ABInBev, and Feral Brewing selling to Coca-Cola Amatil. Vale Brewing also sold to the local Bickfords drinks company, shortly after they’d opened their own brewery.
Will 2018 be different?
- With a new brewery already opened this year, and the trend of a new brewery opening every 6 days been constant for the past 3 years, there is no indication that the number of new breweries opening this year will be any less than 2017. As part of updating the Brewery List we maintain a list of upcoming breweries and this remains at over 100 looking to open in the next 6 months.
- There may, however, be an increased number of closures as there are quite a few for sale openly, and privately. But any increase will still see the local craft beer industry failure rate only rise a small amount about the current 3.5%, and is highly unlikely to hit the business average of 20%.
- Having said that, it is more likely that these breweries will be bought by new owners and some reopening under new names. We suspect most of these breweries for sale will take on new investors to maintain and expand their operations, rather than see them close permanently.
- There will likely be a few more that sell out to corporate businesses as we predict in our recent “Who’s Next Now” feature. Not just to ABInBev or Coca-Cola but to other large multinational companies in the brewing industry that do not currently have a presence in the Australian Craft Beer market.