New Zealand rediscovers thirst for beer as consumption returns to pre-pandemic levels

Beer consumption in New Zealand has returned to pre-Covid levels, according to figures from Statistics New Zealand. The data for the first six months of 2022 reveals beer consumption increased by 7.5% on the corresponding period in 2020, when enforced lockdowns closed the country’s hospitality business for long periods. The rebound “reflects the hard work undertaken by businesses to return to normal trading”, said the country’s Brewers Association executive director Dylan Firth. He added that it was a common misconception that drinking had increased during the periods of lockdown. “What we saw over the last two years was when lockdowns were announced there were some short bursts of retail activity, where consumers would stock up,” he said. “But over the course of these lockdowns, people would in fact be drinking less overall. This very much goes against the narrative that some were portraying of New Zealanders drinking to excess over this period.” Statistics New Zealand also revealed consumers were gravitating towards stronger beers, with a 30% increase in sales of beers of 4.5% abv and over (since 2020). This reflects the growing influence of craft and premium brands in the market, according to Firth. “Consumers are looking to focus on quality and premium brands when they chose to enjoy a beer,” he added. New Zealand craft brewer McLeod’s Brewery suggested the rise could be down to an increase in ordering beer online for home consumption. “When people drink socially they tend to drink less or at a lower abv, so they can get home safely and stay productive,” said head brewer Jason Bathgate. “When drinkers buy for ‘at-home’ consumption I believe they would be more likely to buy something stronger and with more flavour.” Despite the increase in consumption, threats persist for the industry in the form of tax increases and cost input inflationary pressure. Firth warned government proposals to introduce a mandatory container return scheme would hit brewers with additional costs of NZD8 (US$4.85) on every 24-pack sold. “With a range of other costs already increasing, brewers have little or no capacity to incur this extra cost and will likely need to pass it on to consumers,” he said. “With New Zealand in a period of high inflation and resulting cost of living pressures on our customers, the government looking to add such a significant extra cost onto the price of our beer is extremely concerning.” “The sector is extremely diverse and the largest to smallest breweries have really worked hard with major shifts in how they do business to pull back from a hugely difficult 2020 and 2021. While we are seeing some positive trends, there is no doubt difficult times ahead.” Bathgate also echoed the concerns over rising input costs, adding his own brewery was facing rises in ingredients, transport, packaging and utility costs. “The brewing industry is in the big squeeze at the moment,” he said. “All, literally all, of our ingredients, transport, packaging and utilities have all gone up 10-30% in the last few months. Then on top of that excise just took a 7% increase to stay in line with inflation… “We are not sure how to make this work. Consumers don’t want to spend more but we make little to no profits annually.” Earlier this year, Australian beverage firm Mighty Craft signed a deal with Heineken’s DB Breweries, which will introduce its Better Beer brand into the New Zealand market. The brand will launch next month, targeting New Zealand’s busy summer period. During the initial roll-out, Better Beer will be produced in Australia, with production moving to New Zealand at the start of 2023. Hop-loving brewers need to remember beer drinkers matter