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Inside Ale Street
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| Export American Craft Brews Catching on Abroad |
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| Written by Michael Venters | ||||||
| Thursday, 31 January 2008 | ||||||
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One of the factors that launched craft brewing in the US was homebrewers emulating the variety and complexity of beer they had discovered abroad. Over the intervening years, American brewers and their award-winning beers have become the emulated ones. Coming full circle, several breweries are exporting their beers to the very countries that once influenced the craft brewing movement.
The Brewers Association, the trade association for craft breweries, has been fueling international demand for American craft beers through its Export Development Program (EDP). According to Bob Pease, VP of the Brewers Association and EDP committee member, the EDP’s goal is to “raise awareness of American craft beer throughout the world.” While some breweries were already exporting and beers had been sent to Europe for various festivals and events, the EDP was created when the BA Board of Directors suggested that the Association apply for federal grants to promote international trade. Currently, the BA receives two grants from two programs under the US Department of Agriculture: the Market Access Program (MAP) and the Emerging Market Program (EMP). The money is used to promote awareness of American craft beers as well as build relationships with importers and distributors abroad to facilitate “matchmaking” with domestic breweries. In 2006, 600,000 gallons or over 19,300 barrels of American craft beers were shipped abroad. While 2007 figures aren’t available yet, Pease expects total volume to eclipse one million gallons, easily surpassing the 15 percent growth goal. Growth in 2008 could be fueled even more by the weak US dollar, which ironically will make imported hops and malts more difficult to acquire. For some breweries, such as Rogue Ales, which has been exporting its beers for more than 18 years, the export market is a small percentage of its business, but, now, part of who they are. Jack Joyce, founder and Chief Wisdom Officer felt that “if we’re going to have world-class beers, we should find out…” That sentiment led to international competitions, which led, ultimately, to Rogue exporting to Japan. Now the brewery has customers in seven countries and continues to look at other potential markets, such as Mexico. Joyce actually sees the exportation of his beers as serving two purposes. Beyond the obvious goal of creating new markets, he sees success overseas as good business domestically. While some beer drinkers have been slow to embrace domestic craft beers, they see imported beers as a mark of sophistication and status. Rogue is now able to position its beers, not only as a craft beer, but a world libation, comparable to anything and everything on the store shelves. For Eric Wallace, founder of Left Hand Brewing in Colorado, there is another level of satisfaction in exporting his beers. After being “the kicking boy of the universe” for years in the world beer industry, American craft beers are now influencing brewing in other countries. “Seeing a porter being brewed in Germany is pretty cool,” notes Wallace. Although he thought the idea was strange at first and making it a reality took years, Left Hand began exporting in 2007. Even with just a partial year under its belt, two percent of Left Hand’s sales are already sold outside the US. Wallace expects that figure to grow to three percent in 2008 and looks for the market to continue to grow. Although the EDP works to fuel demand for American craft beers, each individual brewery is responsible for negotiating logistics, prices, etc. with importers in other countries. This requires a serious commitment on the part of the brewery, just like expanding into new markets domestically. According to Garrett Oliver, brewmaster of Brooklyn Brewery, “If you’re not going to take it very seriously, export is just an expensive waste of time.” Brooklyn exports to nine countries with volume approaching 10 percent of overall production. As a result, Oliver is in Europe several times a year for brewing projects and Brooklyn beer events. Beyond supporting companies currently exporting and helping those who want to, the EDP continues to use the grant funds to find new markets. In 2005, the EDP launched a research study on the Chinese market. The work culminated in February of last year when a mixed case of craft beer from Rogue, Brooklyn and North Coast Brewing Co. was shipped. Additional shipments included beers from Gordon Biersch and Kona Brewing. Re-orders from China have been large enough to fill full containers from each brewery. Bob Pease expects demand in China to continue to increase, making it one of the largest export markets for American craft beers. One of the best marketing techniques used by brewers and the Brewers Association to promote their brands is entering beers into international competitions. In 2007, American breweries won eight medals at the Stockholm Beer and Whiskey Festival and 22 medals at the European Beer Star Competition. The largest market for craft beers is currently Sweden, followed by Denmark, the UK, Canada, and Japan. While Japan has had American craft beers for some time, the EDP is just beginning its efforts there. However, strict importation laws and red-tape hurdles will probably keep growth in Japan modest. Bob acknowledges that the program and craft exportation in general are still in their infancy. However, the success so far is fostering momentum. The grants the EDP uses to fund its programs must be renewed each year. There are also strict guidelines in how the money can be spent. However, in 2008, the money given to the EDP through the EMP increased over 100 percent from 2007. Funds from the MAP are expected to be consistent with last year. The increase shows not only the impact the program is having, but the faith that exists that the demand for American craft beers will continue to grow. Still, the EDP has considerable room for growth. The Wine Institute also applies for funding and in 2007 received approximately $7 million versus the $250,000 EDP is planning for 2008. Craft brewers in the US have always been pioneers. In less than 30 years, they have turned what was basically a hobby into the fastest growing alcohol segment in the US. In the process, they have garnered international recognition due to an impressive array of great beers. Now, a fearless few are embarking on the next leg of the craft beer journey.
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