The remarkable rise in popularity of craft beer in Australia might be driving mainstream brewery executives to the bottle, but for Glenn Cary, chief executive of the independent Balmain Brewing Company, it is only the beginning.
Figures released this week by Roy Morgan Research reveal that the number of craft beer drinkers has topped 1m for the first time, and come at a time when overall Australian beer consumption has hit its lowest point in 70 years.
According to the market researcher, the number of Australians aged 18 and over who consume local craft beer in any given four week period has almost doubled over the last five years, from 592,000 in the year to March 2010 to 1.04m as of March this year.
Meanwhile, mainstream beer declines
Yet total beer consumption is now below the level it was in 1946, the Australian Bureau of Statistics revealed in April. Roy Morgan’s figures back this up, showing a drop among mainstream beer drinkers from 6.1m to 5.8m between 2010 and 2014.
“We are all very excited by this,” said Cary. “What this shows is that Australians might be drinking less, but they are drinking better.”
Still, while the rise of craft beer is no surprise to Cary, who has been in the craft brewery business for the last decade, it is only just starting to pick up steam.
“This is part of a worldwide phenomenon. While Australia is catching up quickly, we are still a long way behind the US, Canada and other countries. Australia is essentially an emerging market.
“While the figures say 1m people now, the indications are for double-digit growth over the next 10 years, which makes things very exciting for our industry.”
The gains in the local craft market have come at the expense of mainstream beers, said Angela Smith, of Roy Morgan Research.
“The last five years have seen local craft beers fighting the increasing popularity of imported beers. This is good news for the Australian beer market,” she said, adding that young drinkers are the force behind the segment’s growth. In 2010, 7.9% of 25-34 year olds drank craft beer in an average four weeks, but the figure has since grown to 10.7%.
“Today, consumers are more discerning, aware and interested in what they are eating and drinking,” said Cary.
“As a result, they are experimenting with craft beers and finding from a taste point of view that they are better than what our fathers used to drink. They are saying: ‘If I have a beer, I want a really good beer,’ so that’s why they are opting for craft beers.”
Hipsters, Metrotechs and New School Cool
The younger demographic is also the stronghold of the hipster. People from New South Wales—home of hipster favourite, James Squire—and Queensland have taken to craft beer with particular zeal.
Between 2010 and 2014, NSW’s craft beer drinkers grew by 186,000 people, while in Queensland an extra 99,000 developed a taste for it.
In terms of demographics, “young, cultured, clued-in and cashed-up” consumers—known to market researchers as “Metrotechs”—are heavily represented among craft beer drinkers, said Smith.
“Metrotechs’ love of craft beer is unsurprising—their swanky rented apartments in areas such as Spring Hill in Brisbane and Elizabeth Bay in Sydney could be straight out of a premium beer commercial.”
Of all the Metrotechs, the “New School Cool” persona has the highest proportion of craft beer drinkers, with one-fifth of this hip, young, inner-city-dwelling demographic drinking craft beer at least once in an average four-week period, compared to nearly 6% of total Australian adults.
“As quality is typically more important than price for New School Cool, it follows that they’d opt for a craft beer over the more mass-produced mainstream alternative,” Smith added.
As one illustration of this, Balmain has just relaunched its Bock line of 5.5% dark lager, which has been off the market for 30 years, in bottle form. This move will no doubt tap directly into hipster tastes by not only being niche but also having a retro cachet.
But by this token, aren’t craft brewers in danger of ignoring Australia’s growing older population?
Cary sees this as potential: “Back in the ‘Eighties, Balmain Bock was a craft beer before craft was even invented. What you’re seeing now is the older generation are looking to their kids, who are introducing them to craft beers at the family barbecue, for example.
“And what this is doing is awakening their senses. When they go to the bottle shop, they might get a four-pack of Balmain, rather than a whole carton of mainstream beer. They are price sensitive but they know they are paying more for the best that’s available.”