THERE ARE CURRENTLY around 50 microbreweries operating in the Republic of Ireland, following something of a surge in the last 24 months.
And — although we’ve been hearing quite a bit about the ‘explosion’ in Irish craft beer in the media — in terms of employment there are currently just over a hundred full time jobs in the sector here (116, according to the latest estimates).
However, that’s set to increase steadily over the next six years or so…
A report commissioned by brewers predicts a five-fold increase in that time-frame.
“Employment in craft brewing has almost doubled since 2011,” notes economist Bernard Feeney, who conducted the in-depth report for the Independent Craft Brewers of Ireland.
“At current rates of growth, a five-fold increase in production could be achieved in about six years.
Even allowing for a decline in employment intensity, as firm size increases, the total direct workforce in micro-brewing could reach 500 within that time frame.
Tracing the beer boom…
The growth in the sector in the last few years has been driven by a range of economic and social factors. The pattern reflects similar booms elsewhere in the the world — most notably the US, there there are now over 3,000 craft-brewing operations.
And while the practice first emerged in Ireland the 1980s and 90s — many of the early pioneers didn’t survive beyond that period (notable exceptions include the Carlow Brewing Company, the Porterhouse and the Franciscan Well).
After an excise tax rebate was introduced in 2005, a number of other players joined the scene: the likes of Galway Hooker, Galway Bay Brewery and Trouble Brewing.
However, the real expansion has occurred since the start of 2013 — as demonstrated in this graph, from the ICBI report…
Small beginnings…
While there’s been a proliferation in the number of breweries coming on stream, the average size of the various facilities, as yet, remains on the small side.
Of the 20 breweries operating in 2013, seven were producing less than 500 hectolitres per year (St. James’s Gate, by way of contrast, produces about 7 million hl every 12 months).
And, again — even though feature sections of newspapers (and popular news websites) have been giving plenty of coverage to the microbrewery boom — the craft beer sector still accounts for only a tiny fraction of the market… It’s estimated it will account for just under 1 per cent of the total beer production in Ireland this year. In terms of beer consumption, the figure is around 1.2 per cent.
Future growth?
Finance Minister Michael Noonan had some unexpected good news for the sector in October’s Budget, when he announced that the excise relief ceiling for microbreweries is to be increased.
Coming up to next year’s announcement, brewers will be asking for further changes in the system — with many newer entrants complaining the way it’s currently structured hampers cash-flow, and that a changes to a ’non-rebate’ basis would be better for business.
Elsewhere, there’s plenty of room for growth in the next few years.
As so many are new to the market, the existing microbreweries in Ireland are operating, on average, at only 50 per cent of their production capacity. Some of the more established players are also trading-up, and selling off their older, smaller-scale equipment to newer companies.
Production is likely to be ramped-up significantly in years to come as demand increases, according to the ICBI’s forecast.
International experience also points to future growth potential… In New Zealand, the craft beer share of the consumption market is estimated at up to 3 per cent. And in the USA, the sector continues to surge: in 2013, craft brewers made up 7.8 per cent of the total beer market, stateside — up from around 6.5 per cent the previous year.
NOTE: TheJournal.ie will be taking a look at the craft beer sector in a series of articles this week. Keep an eye out for them,
To embed this post, copy the code below on your site
have your say