Few businesses made it through covid phenomena unscarred, but none were cut quite so deeply as those in hospitality. But behind every bar, there’s beer, and the brewers producing it are next in the firing line when premises close down.
Like most other low-margin production, brewing is only financially feasible at scale, and when a drop in demand forces a brewery under the scale which it was built to operate then it’s on borrowed time. Sadly, that time has long run out for many, more than one in ten over the last five years. However, a small handful were plucked from the fire right as it seemed the end was nigh, and while their stories are definitively an exception to the rule, the fact that they lived to tell them remains a promising sign.
EPIC: The news of Epic Brewing going into liquidation in 2023 was the mother of all wakeup calls for the beer industry. The fact that one of the nation’s oldest and most storied and successful brands could go bust with such little warning was startling proof that nobody was immune. Only a month later a partnership between the Russell Construction Group and Hancocks (the beverage distribution leviathan) bought the brand. Crucially, despite its prominence, Epic was still a contract brewer, meaning they had no brewery of their own. As much as this fact might have been instrumental in their downfall, it now meant that they were less beholden to that critical issue of scale, making them a much safer purchase. While production was reduced, Epic beer never left shelves, and the brand is now steadily rising back to relevance.
HOP FEDERATION: The demise of Riwaka brewing icon Hop Federation was a more arbitrary one. They were under the same pressure from inflation, rising costs and lower demand as everyone else, but still holding on. But owners Kono (the Nelson based food and beverage Māori mega-corp) made the decision to shut down Hop Federation as part of corporate restructuring. Initially no opportunity for potential buyers was presented, the tax write-off presumably looking more palatable than finding a buyer amongst the troubled industry. Eventually, and significantly out of the blue, DNA brewing announced that they had secured the Hop Federation brand and will move production to their Marlborough brewery.
FORTUNE FAVOURS: Brewing beer and selling it directly to customers in the same premises is usually considered the dream scenario for a producer, but for central Wellington mainstay Fortune Favours, this inverted into a curse post covid. With business down 45% over the last two years alone, their established means of throughput (the bar) was operating at a scale smaller than the brewery could sustainably cope with. Anguished plans were already underway to remove the brewing equipment from the building when neighbouring brewing superstars Garage Project offered a lifeline. It’s unclear how much of the Fortune Favours brand will remain distinct under the Garage Project flag, but most employees have been re-hired by the new owners.