Local craft brewers are taking their products offshore.
Several Western Australian craft brewers are seeking opportunities beyond the saturated markets in the eastern states and instead targeting expansion to the north.
For a growing cohort of local breweries, South-East Asia is proving fertile ground.
Eagle Bay Brewing Company general manager Keith Warrick said Singapore and Hong Kong represented a more accessible market than the broader domestic scene.
“We see that the eastern seaboard is highly competitive and very much price impacted,” Mr Warrick told Business News.
“So going to export, as opposed to trying to compete in the east, was a way of growing our overall volume and distribution and being able to achieve a premium for those sales versus having to work on discounting models to build a market in the rest of Australia.”
As well as ease of access, South-East Asia’s climate provides production benefits for Eagle Bay.
“In the traditional year, our volume low point is the winter [in Perth],” Mr Warrick said.
“We thought that selling into South-East Asia would balance our volumes where [Asian sales] would peak in our winter, being their hottest time of the year.
“We thought that would be a nice correlation in terms of keeping our production volumes consistent from month to month.”
Hamish Coates, founder and managing director of Rocky Ridge Brewing, has high hopes for Singapore, which is currently bringing in $35,000 in revenue per month, with Hong Kong bringing in the same every two months.
The Busselton brewery’s five-year target is to hit a $100,000 monthly revenue benchmark, but Mr Coates said that could be hamstrung by the pandemic.
“It’ll likely depend on where COVID takes us over the next six months, because being on the ground in those markets makes a huge difference to your brand presence, so I think it’ll largely hinge on our ability to travel,” he said.
The initial costs of entering the Singaporean and Hong Kong markets mean margins on the exports are still small for Rocky Ridge, but Mr Coates said it was a long-term strategic investment in growing the brand.
“A lot of it has come down to the fact that we’ve spent more on customer acquisition than we probably would have in Australia and that’s led to it being a cost-neutral exercise,” he said.
“That’s slowly but surely changing as brand presence grows. And the cost of customer acquisition decreases as more and more people start to actually get into the product.”
Distance was also a factor behind Rocky Ridge’s move into Asia.
“Geographically, it’s far easier for us to go into South-East Asia than … the east coast,” Mr Coates said.
“The east coast is actually quite a hard market to access, simply because freight routes from west to east aren’t the best and they’re very expensive, whereas shipping routes to South-East Asia, from Perth specifically, are quite easy to access and also very good and reliable.”
Bassendean-based Nail Brewing Australia has been in the Singaporean market since early last year. Nail beers are on tap in five venues, and the business has plans to expand its brand presence.
A state government Access Asia grant is allowing Nail to invest in building its on-premises brand presence via neon lightbox displays, which provide eye-catching in-venue marketing capability.
It’s an expensive idea borrowed from Hawaii’s Kona Brewing, and wouldn’t have been possible without the grant, sales manager Brendan Grima said.
“You need to be mindful of the commercial pressures for the importer so the beer lands at an affordable price for the consumer,” Mr Grima told Business News.
“With those pressures, going for larger permanent point of sale activation is tough. The grant had been able to give us great presence along with solidifying our relationship with our buyer.”
Nail’s beers, much the same as those of the other breweries, are a premium product and sell at around the same price point overseas as they do at home.
“There’s always going to be a market for cheaper beer out there, but I really believe craft beer plays a pivotal role in that exploratory market, and it’s alive and well in Singapore,” Mr Grima said.
