Microbrewing in Ireland
Transcription
Microbrewing in Ireland
Micro-Brewing in Ireland – Collette Corish, Niall Hoey 1 Microbrewing in Ireland Collette Corish, Niall Hoey Course: Biotechnology Year: 4 BE401- Industrial Bioprocessing Module Co-ordinator: Donal O’Shea Abstract Micro brewing in Ireland is a craft that has died off in the last 40 years due to increasing competition from large multinational brands. However in recent years a revival of the lost craft, firstly in the US and now in Ireland has seen new microbreweries emerging worldwide. The survival of traditional Irish beers is now tied to the success of modern Irish microbrewers. A study of micro-brewing in Ireland shows three main business models, the microbrewery, the brew pub and the market Beer Company. An investigation of all three, in particular the microbrewery and brewpub, showed that each model could be economical viable in an Irish market. Despite this to ensure the long-term success of a microbrewery, it seems necessary to expand into foreign market places. This is a fact acknowledged by the Irish government, with the recent introduction of a stimulus package for the exportation of micro-beers. The existence and proved success of high profiled Irish microbreweries, ensures the survival of an Irish tradition bordering on the edge of extinction. Micro-Brewing in Ireland – Collette Corish, Niall Hoey 2 What is a Micro Brewery? The term Micro Brewery covers a wide range of breweries that are classed as a small-scale production of beer, such as craft brewers, brewpubs and microbreweries. In essence, these are breweries that have decided to concentrate on the handcraft that is involved in brewing beers and developing speciality brews which are unique to their particular brewery or pub. The Microbreweries are more craft driven with emphasis on taste, quality and balance in comparison with larger breweries, which can be described as being more interested in efficiency of a brewing process and volume of output. Because of the chosen emphasis on taste, balance and quality, the batch sizes for such brewing are decreased in size to allow more ‘attention’ to developing a lager, ale or stout with more character than that of large scale breweries. According to the Brewers and Malsters Guild of Ireland a Micro Brewery can be broadly defined as any brewery that produces less than 30 000 HL of beer annually [1]. When compared with large-scale breweries such as Guinness whose annual output is 1,000, 000 HL then it is easy to distinguish why these breweries are titled ‘Micro Breweries’ [2]. Because of the smaller scale of production and smaller batch sizes, the process becomes more labour intensive as automation of the process, which is the case in the large-scale breweries would ‘impersonalise’ the craft itself which in effect undermines the morals of a micro brewery. Microbreweries also have advantages over their large-scale competitors. The downsizing of the brewing process allows the brewery certain flexibility in adjusting to the marketplace more successfully than large-scale breweries, a marketplace that is becoming more demanding of their beers. The microbreweries offer one more advantage that the large-scale breweries cannot, a niche in the market, a return to classical beers from times gone past. With these factors in their favour, microbreweries and brewpubs have been making a steady return to the Irish marketplace in the past twenty years. Micro-Brewing in Ireland – Collette Corish, Niall Hoey 3 Types of Micro Brewing Micro brewing can be categorised into four different categories. The first being a Microbrewery itself. This can be defined as a premises that produces less than 30 000 HL and packages its product for sale off the premises. Such microbreweries may have a tasting room on the premises for people on brewery tours or site visitors. One such example of this is Kinsale Brewing Company, which will be discussed in detail later on in the report. A brewpub is different from a micro brewery in that it is a fully licensed public house that brews its own beer on the premises. An example of a brewpub is The Temple Bar, part of the Porterhouse Brewing Company, which will also be discussed later on in the report. Microbreweries can also be classified as regional breweries in that their sole produce is supplied to only the local area. Lastly there is what is termed A Beer Marketing Company, who chose to put their label on a product which has been brewed by some other microbrewery or brewpub. This is known in the brewing market as contract brewing. The History of Micro Brewing in Ireland. Micro brewing in Ireland was not an overnight phenomenon. After the establishment of main breweries in Ireland such as Guinness in St. James Gate and Murphy’s Brewery in Cork, micro breweries that had been brewing in the late 1800s and early 1900s slowly began to disappear as competition began to present itself in the form of large scale breweries. During the interim years only the large scale production breweries dominated the Irish beer market. Meanwhile, in the mid 1970s in America, the large scale brewing companies started to consolidate and by the late 1970s there were only 44 large scale production breweries in the U.S.A. Entrepreneurs stateside had begun to realise that the only way to experience worldly beers was to brew them themselves. In the 1980s and early 1990s, the fledgling micro brewing industry in the U.S.A. saw annual production growths of up to 51% [3]. It could be said that it was this boom in the micro brewing industry in the U.S.A. that fuelled the start of a micro brewing awakening in Ireland. In the early 1980s, there was a brief interest in micro brewing with the opening of Dempsey’s Micro Brewery in Inchicore in Dublin, but this revolution was only short lived when Dempseys ceased production shortly after its establishment. Micro-Brewing in Ireland – Collette Corish, Niall Hoey 4 There was no other interest in micro brewing until the establishment of Biddy Earlys in Co. Clare in 1995, a brewpub whose success in production over the past ten years has now led to the export of their product to the U.K., Sweden and Japan [4]. Following the establishment of Biddy Earlys Brewpub in 1995, a further 11 micro breweries and brewpubs have been established. Two more were established in 1995, the Irish Brewing Company in Co. Kildare (Micro brewery) and the Porterhouse Brewing Company in Dublin (brew pub). The year of 1996 saw a micro brewery opened in Smithfield in Dublin, by the Dublin Brewing Company which brews stout, lager, beer and cider. In 1997 yet another micro brewery started producing their own beer, Celtic Brew/Meadows Micro Brewery in Enfield, Co. Meath. Three more micro breweries were established in 1998, Carlow Brewing in Co. Carlow, The Franciscan Well Microbrewery in Cork City and Dwan Tipperary Brewing in Co. Tipperary which has ceased operations since 2003. A famous brewpub also established itself in 1998, a premises on the Liffey in Dublin, Messrs. Maguires pub. In 1999, only one more microbrewery opened its doors, Balbriggan Brewing which has also since then ceased its operations [5]. Yet another microbrewery, Kinsale Brewing Company started its production on its site in Kinsale in 2001. Finally Actons Country Pub is still in the process of setting up a brewery on site, to make it a brewpub but is at present putting their label to beers being brewed for them by contract [6]. Kinsale Brewing Company, Microbrewery – A Case Study. The concept for Kinsale Microbrewery was realised by a Dublin family, Barry Kiely, his brother Albert Kiely and Albert’s son Cathal Kiely in 1997. Its establishment stemmed from the family’s interest in providing unique hand crafted beers, which they felt, was a poorly serviced sector in Ireland. At this stage America was experiencing a micro-brewing revolution, and so the Kielys felt that researching the concept of micro-brewing over in America would be beneficial. It was realised at this stage that there would be a market in America for Irish hand crafted beers and it was on this initiative that Kinsale Brewing Company started producing hand crafted beers in 2001. The reason for its location in Kinsale in Co. Cork is somewhat historical. On carrying out research it was discovered that the ruins of the 300 years old Landers Micro-Brewing in Ireland – Collette Corish, Niall Hoey 5 Malt House was still located there, with a wealth of history in the area. Due to its location, Kinsale was often the last port of call for explorers and travellers travelling to America and so many left this small port with hand crafted beers and home brews. Sir Walter Raleigh was said to have left Kinsale with hand crafted beers as well as Alexander Selkirk (Robinson Crusoe). With all this history and indeed recipes for lagers dating back to 1703 in their possession, the Kielys had an even better marketing tool for the export of their produce. On a trip to the brewery and a tour given by the management, the process was witnessed by the reporters. The process began with the milling of the malt to get grist, leading to mashing and the achievement of fermentable wort. The wort is then passed through the lauter tun and then boiled in the ‘kettle’. When the wort has reached the boiling stage, the hops are added and boiled for an hour. The hopped wort is then chilled and sent to the fermentation room where the primary fermenting process will begin. Fig.1 The 10 HL tank where the fermentation process takes place. The fermentation time varies for the different beverages being brewed; a one-week primary fermentation is allotted to the Kinsale Beer. The next step of the process is transferring the liquid to the maturation room for the secondary fermentation to begin. At this stage the yeast is still fermenting but at much lower temperature. The beer is then filtered and packaged on site. The process plant contains water purifying system, a mill, two boiling/fermenting tanks, a lauter tun, four conditioning tanks and various filtration equipment. Fig.2 The conditioning tanks where maturation takes place. Micro-Brewing in Ireland – Collette Corish, Niall Hoey 6 The brewery is responsible for four different beverages, Kinsale Cream Stout, Kinsale Beer, Wheat Beer and the age old Williams lager. All the products are available in a small pub on the premises but is only open during peak tourist season and is very popular with visiting tourists. The company tries its best to source the ingredients locally but due to moisture problems with local grain they have been importing grain from the U.K. recently, with their hops being imported from Germany. The brewery supplies all the local public houses and hotels with their popular Kinsale Beer, with the three other beverages being exported to America. The brewery’s annual production is approximately 21,500 HL [7]. The Porter House Brewing Company, Brew Pub – A Case Study In 1982 cousins Oliver Hughes and Liam LaHart founded a small microbrewery in an industrial unit in Blessington. The original intention of the brewery was to supply a range of unique lagers and ales to the Dublin area. However after only three years of business the brewery was forced to close as it fell victim to the problems, which are frequently faced by microbreweries. In 1989 the group bought a small run down premises on the sea front in Bray, Co. Wicklow. It was from here that the group began to diversify the range of beers available to the Irish public. While they did not have the ability to produce their own brands, they sought out beers available worldwide and began importing a wide array of bottled lagers. The level of interest in beers other than those readily available in the majority of pubs highlighted a niche market which could be exploited. Having seen the difficulties faced by a microbrewery and having successfully managed to establish a bar, a brewpub seemed an economically sound method to break into the market. In 1996 the group’s second premises, the Temple Bar opened its doors to the public. The centrepiece of this three-story premises was the microbrewery. The brewery began producing 10 products which where sold under the porterhouse label. The restoration of the area and growing reputation of the area as a centre of cultural expression meant that the Temple Bar clients where receptive to the introduction of these products. Following the success of this city centre premises the group opened a bar in London. Soon the demand outweighed the production ability of both breweries and the production was expanded into an industrial premises exclusively for the purpose of brewing. The new facility meant there was now potential not only to Micro-Brewing in Ireland – Collette Corish, Niall Hoey 7 supply their current premises but also new sites, other bars and the possible expansion into the US market. In 2004 the group opened the Porterhouse North in Glasnevin which supplies only its own brand beers, as well a acquiring Lilly’s Bordello and a site on Nassau street. The Porterhouse group now brews 10 different products, three ales, three lagers, and three stouts[10]. Currently the group produces 35,500 pints per week and 250 staff are employed in the production and distribution of the products. The production process is carried out as manually as possible[8]. This includes the manual cleaning of the production equipment. Raw materials are sourced both locally as well as from abroad, with hops being shipped in from the US, New Zealand, Germany and the Czech Republic[10]. The popularity of the brands and the success on the Brewpub model is clearly demonstrated by the annual turn over of €21.8 million, which translates into €3 million in profit[8]. These figures are set to rise with the planned opening of the Porter House Central early next year and concessions in Irish revenue laws. Advantages and Disadvantages differing Micro brewing models As outlined in previous sections there are three different models for micro brewing, microbrewery, brewpub and Beer marketing company. Each of these have there own unique advantages and disadvantages. The most significant advantage of the microbrewery is that the initial investment is less than that needed for a brewpub. In the current economic climate the investment in a premises is one of the largest overheads facing any new business. As the intent of a microbrewery is to produce and supply a product, there is no need for the premises to be accessible to the public. This gives the brewery the freedom to locate in an area were property prices are more competitive. However it is also the lack of public accessibility that is the root cause of many problems facing a microbrewery. To distribute its product the brewery is either dependant on bars to agree to sell there brand or they must invest further in bottling/ canning equipment. With any new product the initial demand will be slow. The profitability of supplying a small number of kegs to a number of different premises is relatively low when the cost of delivery and maintenance of the lines are factored in. This is one of the main factors that is limiting Kinsale brewery’s expansion into the domestic market and one of the contributing factors in the closure of the porterhouse’s original brewery. Micro-Brewing in Ireland – Collette Corish, Niall Hoey 8 While the initial investment in a brewpub styled business is higher than that of the microbrewery, there is a greater degree of stability. There are a number of different advantages to having a bar incorporated into a brewery. Provided the pub is correctly managed and well located, it alone will provide a profitable return year in, year out. The revenue generated by the pub can be used to off set the losses or poor performance of the brewery in the initial establishment of its brands. The main advantage of the brewpub over a microbrewery is that it removes the problem of economy of scale, by providing a channel of distribution directly to the public. A Beer Marketing company would appear to be the cheapest form of micro brewing. There is little investment needed in equipment and expertise as the beer is being produced under contract. While this may seem like an advantage, it is only an advantage in the short term. As the Microbrewery/ brewpub recoup their original investment over time their overhead costs will decrease. As a result the production per unit will become more profitable, unlike the cost per unit of the Beer Marketing Company, which is determined by a separate production company. The successes of all three forms of micro-brewing are dependent on the public acceptance of the brands. The microbrewery and Beer Marketing Company may not generate large revenues until their brands are established. The model of the brewpub seems to be the ideal model for a successful business as it can generate an income or possibly a profit while the brand is establishing itself. Future of Micro-brewing “If you were pub hopping in Dublin in the early 1830’s you would have found a proliferation of brews on offer, as there were over 200 breweries in Ireland at the time. Now most pub goers find a dearth of options on offer when it comes to beer and that is what makes us so unique. We are not just publicans but restorers” Oliver Hughes – Founding member of the Porterhouse Brewing Company[8]. The above quote summarises the need for the microbrewers and why the craft of micro-brewing has to be preserved. Micro brewing and the production of uniquely Irish beers is a tradition that goes back hundreds of years. In recent years the large breweries and beers synonymous with Ireland have come under the control of larger foreign multinationals. As a result the future of traditional Irish beer is tied to the future of the micro brewer. Micro-Brewing in Ireland – Collette Corish, Niall Hoey 9 As the Irish market is relatively small and is predominantly controlled be the larger breweries many microbrewers have broken into other markets abroad. In some cases 90 per cent of these breweries revenue comes form exported goods[7]. In 2004 the government acknowledged the importance of micro brewing in Ireland and laid out a plan to introduce an exemption in excise tax for microbrewers. The reason for the exemption was to allow Irish microbrewers to compete with breweries in other markets. This meant that microbrewers producing less than 10,000 HL per annum would have a fifty percent reduction in the amount of excise tax[7]. A sliding scale method was introduced in the calculation of excise tax, which was capped at 60,000 HL per annum. The benefits of having more microbreweries go further than just securing an Irish tradition. It also creates employment directly and indirectly. According to the Irish Craft Brewers Network (ICBN), microbreweries employ seven times the number of people per hectolitre than multinational breweries [7]. The creation of more breweries may lead to increased tourism in areas not normally visited, especially if brands are international recognisable. A prime example of this is the Kilbeggan Whiskey distillery in Co. Westmeath, who exports worldwide and has a sizable number of tourist visit the distillery each year [11]. Ireland used to be a nation of brewers and over the last 100 years this craft as faded away. In recent years the trend has begun to swing in the opposite direction. The domination of the small market by large multinationals, and difficulties in the paths of distribution mean that a full restoration of micro brewing is unlikely. However the actions of the government, the success of brewers like the Porterhouse Group and Kinsale Brewing Co. and the work of ICBN all raise the profile of micro-brewing in Ireland, and will hopefully inspire the next generation of brewers. Micro-Brewing in Ireland – Collette Corish, Niall Hoey 10 Reference: 1. Irish Excise proposal Document, 17 Oct 2005 2. www.beartown.org/education/craft-history.html, [accessed19 Oct 2005] 3. www.beb.ie [accessed17 Oct 2005] 4. www.beerme.com/breweries/ie/index.shtml [accessed17 Oct 2005] 5. Direct contact made with Actons pub [Date 12 Nov 2005] 6. Direct contact made with Kinsale Brewery [Date 02 Nov 2005] 7. Stimulating Indigenous Craft Industry: Proposal For Changes To Irish Excise Law, Constantin T. Gurdgiev, Department of Economics (Trinity College, Dublin)Policy Institute (Trinity College, Dublin), Available at URL: www.tcd.ie/Economics/staff/gurdgiec/ Content/Policy_Articles/BrewerySubmit.pdf [accessed 14 Oct 2005] 8. The Porterhouse Brewing Company, Ernest & Young, Available at URL: www.ey.com/global/content.nsf/Ireland_EOY_E/2005_finalists_porterhouse_ brewing_company [accessed 20 Oct 2005] 9. Craft breweres want excise cut to boost industry, Niamh Connolly, the Sunday Business Post, November 17, 2002, Available at URL: http://archives.tcm.ie/businesspost/2002/11/17/story130494528.asp [accessed 24 Oct 2005] 10. Ireland Largest Genuine Irish Brewery, The porter house brewing company, Available at URL: http://www.porterhousebrewco.com/ [accessed 20 Oct 2005] 11. Direct contact made with Cooley Distillery, Kilbeggan, Co. Westmeath, 28 Oct 2005. Additional Resources: www.camrawestmorland.org/brewies.html http://home.tiscali.nl/beercoolection/adres/ireland.htm [accessed 17 Oct 2005] www.dublinbrewing.com [accessed 23 Oct 2005] www.kinsalebrewing.com [accessed 02 Oct 2005] [accessed 09 Nov 2005] Micro-Brewing in Ireland – Collette Corish, Niall Hoey 11