A question of maturity

Opinion

5 Nov

As 2025 draws to a close, Michael Donaldson reflects on a challenging year for brewers but senses a shift in the wind...

We are now in what people are calling a “mature” craft beer market. What does that mean? The explosive growth of the 2010s is definitely over and the market is settling.

I think of that growth era as being like a reverse game of musical chairs... instead of one less chair per round, there was one extra, and breweries opened to fill the demand. Then, suddenly, the game went back to traditional rules. The chairs reduced and we’ve seen players exit the arena.

This year saw some heavy casualties with Fortune Favours and Hop Federation both going out of business. Other small craft breweries have also fallen by the wayside. The question now is have we reached an equilibrium point where we have the right number of players for the available seats?

Constellation Brands, one of the biggest players in the world beer market, recently stated it was cautiously optimistic about the fact it had reached the bottom of the curve. Its CEO Bill Newlands said: “We’re cautiously, and I would stress that word again, ‘cautiously’ optimistic that we’ve hit the bottom here. But the volatility, as I said, is unprecedented, and the results are very mixed.”

“Some breweries continue to do it incredibly tough while others are seeing excellent growth.”

Anecdotally, that’s about the best description I could give about the market in New Zealand – as they used to say in the ads: “results may vary”.

Some breweries continue to do it incredibly tough while others are seeing excellent growth. Case in point this year was large expansion at Urbanaut in Auckland and at Altitude Brewing in Queenstown. What both those breweries have in common are very good taprooms – great experiences – and they’ve made a strong investment in looking after their local area.

There are other similarly positive stories: Brave Brewing in Hastings, Champion Brewery at this year’s NZ Beer Awards, goes from strength to strength and will always note the huge support they have from their locals.

Garage Project took over the Fortune Favours space in Wellington and are the brewery partner for the revitalisation of the band rotunda in Oriental Bay. While Garage Project are a national brand they’re very much a Wellington business, and that local support stands them in good stead. The fact they’ve “doubled down” on Wellington, to use the words of founder Pete Gillespie, suggests confidence despite the state of the capital’s hospo economy.

On that note, it used to be said that beer was recession-proof, but the past few years have told a different story – craft beer, like other premium alcohol categories, is a nice-to-have, and when times are tough people change their spending habits.

With craft beer, the recession came after that period of sustained growth,
so, relatively, it looks like the category is falling off a cliff. That’s not the case, but at the same time craft beer is not immune to the broad market pressures: we are in a shrinking alcohol market as people around the world drink less and less each year – notably the main growth areas continue to be “better for you” beers, such as non- alcoholic and low carb options.

Beer cannot escape the 21st century trend towards better health and wellness, but within that contracting space there’s still a big audience for our most popular cold beverage.

In the expansionist days of craft, meeting the market just meant making more IPA. Now it’s about building a local connection, offering a variety of products (including hard lemonades, ginger beers, non-alcs, low carbs etc), as well as delivering a great on-premise experience and building brand loyalty through reliable, consistent and high-quality offerings on the supermarket shelves.

Having said all that, as one brewer quipped to me recently, as much as things change there remains one constant: “People like drinking beer outside when it’s warm.”

A great summer will make all the difference.