Microbrewing in Ireland

Transcription

Microbrewing in Ireland
Micro-Brewing in Ireland – Collette Corish, Niall Hoey
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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
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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.
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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.
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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
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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.
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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
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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.
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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.
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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.
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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
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