The panel discusses the ‘hybrid’ boom

On Tuesday 29 October 2019, the inaugural Drinks Innovation Summit was held at the Hyatt Regency Hotel in Sydney.

After a talk from keynote speaker Matthew Brennan about the remarkable influence of apps, technology and artificial intelligence in the way that China goes about its day-to-day business, there followed discussions on the state of the alcohol retail market, including a presentation from Julie Ryan, CEO of the event’s co-host Retail Drinks Australia.

After lunch, the event split into three parts, with one ‘stream’ dedicated to all things beer. In total, there were four panel discussions, which talked about different aspects of the brewing industry:

How to capture the Millennial and Gen-Z market with a focus on ‘ehalth and well-being’

This Fireside Chat was moderated by Beer & Brewer editor Charlie Whitting and featured Chuck Hahn, chief brewer at Malt Shovel, Hahn and Kosciuszko breweries, and Clinton Schultz, the founder of Sobah Beverages, a brewery that has a range of non-alcoholic beers.

“For a long time non alcohol products had a bad name,” explains Schultz. “We’ve got a lot of work to do producing nice products to shift people’s trust levels within non alcohol products. The mentality in Australia has been slower to shift, but in the last six months we’ve seen a massive swing. Young people are becoming more health conscious in general. The non-alcohol adult beverage category will become its own space.”

“The whole trend has been to reduce alcohol in beer,” adds Hahn. “We looked at the market carefully and all our craft beers are just over 4%. There was a need for a naturally gluten-free beer in Australia. People are into the healthy side of things. We’re seeing a bit of a change, but it will be a while.”

The craft beer and cider mania hybrid boom

This panel discussion was focused on the growing trend of integration within the brewing industry – whether it’s brewers ageing their beers in whisky or wine barrels, cider makers using hops in their drinks or brewers using wine yeasts in their beers.

It was moderated by James Atkinson, founder of Drinks Adventures. The panel itself was made up of Sam Reid, co-founder and MD of Willie Smith’s Cider Makers; Matt Houghton, founder and head brewer at Boatrocker Brewers and Distillers; Grant Wearin, founder and owner of Modus Operandi Brewing; and Sam Hambour, co-owner and general manager of Hop Nation Brewing Co.

“There aren’t many limitations with what you can do with beer,” said Wearin. “It’s much harder to make a no acid juicy wine that focuses on a particular profile. You have that versatility with beer and the consumer is moving further away from saying ‘I will only drink this style of beverage’, because they’re playing with styles of beer they would never touch before.”

“There are 650 breweries in Australia, if everyone of them is releasing a special release every month, you times that by 650 and it’s no wonder people are confused,” Reid pointed out. ” I think there’s always a place for well made, well thought-out product, made with passion that makes sense and fits into a clear occasion. Look at Aperol. Everyone wants to play in that spritz space.”

“These specialties are great to have a reason to talk about your brand and always be innovative, it’s almost a different segment of your business,” says Houghton. “You can make money if you keep innovating, but you can get lost in it and think it’s more important than it actually is.”

Small Business, Big Marketing

There then followed a conversation between Atkinson and Jamie Cook, executive chairman of Fermentum and president of the Independent Brewers Asssociation. In the talk, the pair discussed how breweries can manage growth and build brands in a way that keeps them ahead of the competition.

“Don’t be seduced by demand,” said Cook. “There’s a lot of interest among beer drinkers to try new things. So you will get tried. But you can spend a lot of money expanding your brewery before you may discover that the ongoing demand may not be there.

“We’re seeing vertical integration – hotel becoming brewers, brewers aligning with retail channels, retail chains having their own brand. The lines have blurred between retail, brewing and hospitality.”

Equity Crowdfunding

The final Fireside Chat saw Cook turn moderator, as he led a discussion on the recent trend of equity crowdfunding and its advantages and challenges. He was joined by Ben Kooyman, founder of Endeavour Brewing Company, and Dan Norris, founder of Black Hops Brewing, both of whom went down the crowdfunding route recently.

“Anyone who’s going to launch crowdfunding, one I think the platform will be more well known and received than when we did it,” said Kooyman. “We had to garner all the interest quickly. They’ll be more widely accepted but they won’t be first mover. They’ll be better off if they’ve got a USP or a different strategy than the usual.

“Even BrewDog needed other forms of finance raising to get to where they wanted. It’s not the silver bullet but it’s a promising marketing platform, but don’t think it’s the road to easy riches.”

“When we raise money I really want to make sure that we value the business highly,” said Norris. “You watch Shark Tank and these entrepreneurs up there that are giving their bushiness away to investors and they don’t know how valuable their company is. It’s really hard to build a brand and so I looked at those multiples and then increased them. You can tell if you’ve priced too high or not high enough. It’s supply and demand like everything else.”

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