Sunday, December 17, 2006

Honing the Craft

My New Year prophecy is that ‘2007 will be a defining year in the craft brewing industry.’ The war camps are mustering their troops for a Federal Election and it’s vital for small brewing companies get tax relief. Never in the history of Australian craft brewing has there been a greater need for solidarity or a better time to rally support. I was fortunate enough to have the opportunity to investigate the craft beer industry in America earlier this year. Comparisons between America and Australia are inevitable but well worth mentioning if we are to see any substantial growth. The American craft industry is streaking ahead with annual growth at 11%, and According to Paul Gatza, Director of the Brewers Association in the US “. "The rate of growth in the craft beer segment appears to be accelerating, This is the third straight year we've seen an increase in the craft beer growth rate." Here in Australia growth is less than 3%.

The Victorian Association of Microbrewers (VAMI) compiled a report with the assistance of Business Management Company Street Ryan & Associates which highlights the major areas of concern for the small brewery industry. The report is an extensive look at all aspects of the microbrewing industry, warts and all, and was compiled to assist in lobbying members of parliament to support tax change. For mind, here are the two most significant issues.

Graduated Tax Structure/ WET Tax equivalency.
Microbreweries are small brewing businesses producing 10,000 to 3 million litres of beer per annum and present one of the few opportunities for business development and employment growth within the beer and malt industry. New microbreweries have been establishing at the rate of 30% per annum in recent years. Total employment in the brewing industry decreased at 0.3% per annum whilst employment in microbreweries has increased at more than 10% per annum.

The majority of microbreweries in Australia are diversified businesses, often offering hotel/pub/bar, restaurant/café, or tourist attraction operations in complement to beer manufacturing. Many microbreweries (54%) are located in rural and regional Australia. There were 84 known microbreweries producing an estimated 12.73 million litres of beer with an estimated total economic contribution to the Australian economy of $295.48 million. If there is no change in excise arrangement, we’ll see10.5% per annum growth in 2006 and 2007 and 7% per annum growth during 2008 to 2010, from existing microbreweries, but a re-structured excise environment will see 12% per annum growth in 2006 and 2007 and 20% per annum growth during 2008 to 2010, from existing microbreweries

Estimated and projected taxes collected and paid by microbrewery organisations suggest that the impact of a re-structured excise duty arrangement in 2006 (to introduce an excise minimum threshold of $1.72 million in sales per microbrewery enterprise or enterprise group) would be a total reduction in all taxes, duties and statutory charges of an estimated $6.39 million. However, by 2010 the re-structured excise arrangements would lead to an estimated increase in taxes, duties and statutory charges of $13.22 million (i.e. $72.00 million compared with $58.78 million in 2010).

Provide ‘the complete package’-sound investors, proper business plan, qualified personnel, technical training, quality assurance procedures for operators of small breweries, and a well organised distribution system.

The report goes on to say that many microbreweries are undercapitalised and face ongoing cash flow strain. Benchmarking results show that most microbreweries have average to poor long term credit risk ratios and poor efficiency ratios. There is a need for business skills, technical training, information, and quality assurance procedures for operators of small breweries. Few microbrewers have a background in the industry; their involvement often stems from a passion for brewing (perhaps generated from home brewing) or through a desire to diversify from an existing hospitality based business Some microbreweries are operating as hobby or lifestyle businesses (similar to many vignerons and wineries), with the production volumes below the extremely low level of 30,000 litres which is the excise duty threshold. Microbrewers believe that excise duty re-structuring, in line with wine companies, would have an immediate impact on these breweries, encouraging them to scale up to full time businesses; expanding production volumes, sales and employment

Visiting microbreweries are becoming “sought after” experiences of international visitors, particularly European backpackers. Guided bus tours from some operators now include microbrewery visitation as a key selling point. Many regional microbreweries are included in tourism brochures and emerging food and wine trails. Domestic consumers and tourists are keen to taste the product at its source, “meet the brewers”, and experience unique product in restaurants and bars. Sales of beer to the “food service industry” (restaurants, licensed cafes and wine bars) is another significant market segment. Often this market is accessed by appointed distributors who also supply to the third main domestic market segment; liquor stores and licensed supermarkets

So here are a few microbreweries that are leading the way and offer a benchmark for other small operators to emulate.

The Redoak Brewery deserves the title of best small brewery in Australia. Redoak has had outstanding success in the past three years. They achieved 18 awards at their inaugural Australian International Beer Awards 2004. This was then followed by the attainment of 35 awards at the 2005 Australian International Beer Awards - nearly doubling their results from the previous year. In 2006 won the Grand Champion Trophy at AIBA 2006 for the highest scoring beer judged against 974 other beers. Redoak was the most awarded brewery for the second year running at AIBA 2006 against strong local and international competition. They won the prestigious Grand Champion trophy at the Australian International Beer Awards 2006 and also won 2 Gold medals at the World Beer Cup 2006 in Seattle, U.S.A. against over 2000 international beers. At the local level, Redoak won trophies for their India Pale Ale and Christmas Cheer at the Australian Beer Festival in Sydney this September.

The Redoak Brewery currently brews a staggering 40 premium beers, of which 20 are available at any one time at the Redoak Boutique Beer Café on Clarence Street in Sydney. In addition to premium quality beers, brother and sister team Janet and David offer a menu of exquisite gourmet cuisine, developed together with Head Chef Richard Park as the perfect accompaniment to the Redoak beer range. The stylish boutique beer café offers a unique difference in many ways to any other drinking or eating establishment in Sydney or across Australia. Every aspect has been put together with the upmost detail. For example, the bar tops are made from 700 year old jarrah timber sourced from West Australia’s famous Redoak has also created a beer appreciation course to take customers through the brewery history, process and special qualities and characteristics that define a premium beer. Customers can then enjoy the fine cuisine complimented by a Redoak beer, while being taken through the individual flavour and aroma profiles of different beer styles. The Café also offers unique Tasting Boards – the first of their kind in Australia. The Tasting Boards each hold four canapé style dishes that are matched with four different Redoak premium beers.

Potters Hotel & Brewery is located in the NSW wine region of the Hunter Valley. The heritage listed ‘Brick Beehive Kilns of Nulkaba’; and Australia’s first Destination Spa offers the largest range of spa treatments in Australia. The elite Destination Spa is equipped with the latest technology, professional treatment beds, wet rooms and Spa. Every treatment room has its own climate control to ensure maximum guest comfort during spa therapy. The boutique accommodation features variety of hotel, villa and spa suite options. While maintaining a sense of privacy, guests can enjoy the best of the outdoor and indoor extensive leisure facilities including; swimming pools, kids playground, lollie shop, day/night tennis, spa, massage room, billiards and historic kiln tours. According to Marketing Manager Daniela Fosci. “Our boutique microbrewery is the Hunter’s first ever microbrewery. Our beers were Bronze Award Winners at the 2005 Australian International Beer Awards and our beers are brewed on site daily,” Potters Hotel & Brewery features an authentic German Bier Hall, a fine restaurant the Old Brickworks Brasserie named the Lower Hunter’s Best Restaurant for 2005; and a lively beer rendezvous, the Potteries Lounge Bar.

Moorilla Estate is dedicated to the enjoyment of life. Moorilla has evolved into a cultural haven that draws visitors from around the world to sample award-winning wine, food, accommodation and the Moorilla Museum of Antiquities (now closed to the public for re-development). The latest addition to Moorilla Estate is the state of the art ‘Moo Brew’ Micro Brewery. The estate is located 12 kilometres from Hobart, and the trip takes less than 15 minutes by car. or of you choose you can cruise to Moorilla Estate on the high speed catamaran ‘Excella’ departing daily from the Brooke St Pier situated within the Hobart Dock area.

Moorilla Estate is the birthplace of Tasmania's modern wine industry. Although earlier pioneers had attempted to grow grapes and make wine, it was Italian business immigrant (textiles) Claudio Alcorso who managed to blend the first successful combination of viticulture and marketing and put Moorilla on the map in the 1962. In Claudio's Words:” One kilometre long and almost as wide, its shape is not round, the isthmus is broad and the land rises up gently and then drops towards the river in steep banks covered by native casuarinas, the beautiful green-grey she-oaks… This was the land which became the focus of my life and my anchor to my new country.”

The Moorilla logo is quite unusual and is derived from a Chinese symbol. The unbroken lines and icons depict the constant change and influence of the four seasons. Moo Brew is brewed according to the German Purity Law of 1516, which proclaimed that beer must contain only the essential ingredients: malt, hops, yeast and water.

To ensure the best flavours the brewing involves no preservatives or additives and Moo Brew is unpasteurised. Moo Brew currently produces four styles. A German Hefeweizen (Wheat Beer), an American style Pale Ale, a Czech Pilsner, and an American style Dark Ale. Moo Brew Pale Ale and Wheat Beer are both currently available in Victoria and New South Wales and all four styles are available at selected outlets within Tasmania.

The Mildura Brewery is unlike anything you've seen before, and its beer is equally as memorable, producing four permanent naturally brewed beers, along with unique specialty brews, from inside the former Astor Theatre in Mildura's restaurant precinct, the Mildura Brewery creates beers that are inspired by and named after local produce, landmarks and themes. The unique Mildura Brewery has held on to its former glory as the Astor Theatre with a grandiose refurbishment of the magnificent art deco building, but also includes a new 30hl DME three vessel brew house and bottling line, that is on full display to punters drinking or enjoying a meal in the Brewery Pub.

The Mildura Brewery Pub began life as the Astor Theatre, which was once the most popular theatre in town. Opening in late 1924, the Astor Theatre was one of many in the district, but after a complete remodelling in 1937, the theatre boasted a seating capacity of 914. The Astor enjoyed its heyday during the 1930s and 1940s, however the advent of the drive-in theatre in the 1950s spelled the end for the popular indoor theatre and it closed in the late 1960s. The disused theatre came with the Mildura Grand Hotel when the hotel was acquired by Don Carrazza and his family in 1989. For a long time the former theatre was used as a laundry, car park, and a workshop, with some of the front shops leased, but Mr Carrazza always felt it would be a shame to destroy the building. To honour the glory of the former Astor Theatre, the brewery has retained certain design elements, and today uses the projector room as conference venue, while the theatre's screen is situated among the brewing vats and remains in use.

Since the first beer rolled out of production in late 2004, the Mildura Brewery has taken beer-drinkers by storm. At the 2005 Australian International Beer Awards, Mildura Brewery beers won 18 medals and Sun Light was voted Best in Category.
Mildura Brewery's Head Brewer Stephen Nelsen has beer in his veins. He was introduced to beer by his father, Lyndon Nelsen, who worked for the South Australian Brewing Co. for 34 years. At the South Australian Brewing Co., and would often take his son to work on weekends. It began with sampling beers in the tanks and flourished into a love affair with beer. Stephen completed a Bachelor of Applied Science in Chemical Technology 1992 and then travelled to Europe to do a personal study tour of breweries, working in craft breweries in England to produce real ales (cask conditioned hand pumped living beers).

Stephen returned to Adelaide to brew at the Port Dock Brewery Hotel, Stephen took the challenge of re-commissioning the brewery and developing their beers. He produced 5 beers including the strong Old Preacher, and award winning Milk Stout. The Fosters Group then hired Stephen to set up and run the Gunn Island Brew Bar in Middle Park, Melbourne where he produced three multi-awards winning beers called Shot Fox, Duck's Nuts and Cut Snake, and he gained knowledge of beer design and brewing practices from the product development people in Abbotsford. Stephen heard about the new Mildura Brewery and became involved through brewing consultant Brian Watson and today; he is just as passionate about his beer as he has ever been.
"I am motivated by the fact it's a three-vessel brew-house (in Mildura), giving the flexibility to produce any type of beer, from the diverse range I have experienced in Asia and Europe," Stephen said. "I'm extremely passionate about beer quality, technically and artistically."I also love the location on the river, as I am a keen water skier and fisherman. And I love the city because of its sunny climate, fresh produce, relaxed lifestyle and convenience.

The Mildura Brewery is the newest addition to the Mildura Grand Hotel Group. The Group includes: Mildura Grand Hotel, Stefano's award winning restaurant, the new Spanish Bar and Grill, Avoca Seafood Restaurant, 27 Deakin Stefano's Good Food Store, and Mario's sports Bar.