Ray Ryan reports that brewers in Ireland are building a better future for themselves by increasing their investment in new product development.

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Brewers building a brighter future in Ireland

Ray Ryan reports that brewers in Ireland are building a better future for themselves by increasing their investment in new product development.

Brewers building a brighter future in Ireland

BEER production remains an important sector within the Irish drinks industry in terms of indigenous manufacturing and the provision of jobs.

It accounts for about half the market, directly employs around 2,500 people, and exports more than 40% of its production.

Exports last year increased by over 10% to around €265m as stronger trade to Britain, other European Union markets and the United States is helping to boost trade.

The craft beer sector in Ireland continues to be a success story, making up an estimated 1.2% of the market, with 40% of microbreweries exporting.

That represents a small portion of the overall Irish beverage exports to 130 markets worldwide last year. However, it highlights a huge potential for growth.

The craft beer industry alone is worth an estimated $12.5bn in annual sales in the United States. New York and Boston, cities with large numbers of people with Irish ancestry and many Irish pubs, are obvious marketing targets.

A number of Irish brewers are already exporting to the US. Some are focusing on on-trade channels while others are connecting with craft breweries and creating partnerships that are potentially beneficial to both sides.

With beer consumption in Ireland now approaching the average level of most northern European countries, the Irish Brewers Association is working to ensure that people are aware of their industry’s contribution to social and economic life.

Over 60 microbreweries now operate in Ireland with 22 of them having started in the past two years. The number is expected to exceed 100 by 2020.

The value added by the overall beer sector to the economy was €1.72bn in 2014. It spends €400m purchasing goods and services including transport and agricultural products.

It raised some €425m in excise receipts. The beer- related contribution to employment represents 44,741 jobs.

A new report by Europe Economics, ‘The Contribution made by Beer to the European Economy’ commissioned by the Brewers of Europe, found that brewing companies in Ireland are responding to the opportunities and challenges they are facing by increasing investment, particularly in product development.

The report says production fell slightly between 2013 and 2014, which it says reflects conditions in international markets.

It also says that the industry exported 2.8 million hectolitres of beer in 2014, and that 64% of beer in Ireland is consumed “in the on-trade”, meaning in restaurants and pubs.

The report also found the total beer-related contribution to government revenues increased from 2013 to 2014, with increases in excise duties and on-trade and off-trade Vat, in particular.

Jonathan McDade, the head of the Irish Brewers Association, said the Irish beer industry is experiencing an exciting period of development.

“As the report states, investment in product development is also up. These trends reflect an increasingly diverse beer sector, with more high-quality Irish beer products for consumers at home and abroad,” he said.

“This is having a knock on effect on employment, up by around 370 between 2013 and 2014 to almost 44,800 jobs,” he said.

Seamus O’Hara, managing director, Carlow Brewing Company (O’Hara’s Craft Beers), is the new chairman of the Irish Brewers Association, the representative industry group for brewers and beer distributors.

He grew up in Bagenalstown, Co Carlow. After completing a master’s degree in biotechnology at UCD, he moved to Britain, where he worked in the pharmaceutical and biotech sectors with firms such as AstraZenca and Glaxo Smith Kline.

It was during this time that he was first exposed to the diversity and flavours of craft beers. In 1991, he moved back to Ireland, where he took up a position with Enterprise Ireland and 10 years later he left to co-found a new venture-capital firm, Seroba-Kernel.

In 1996, he and his brother Eamon set up Carlow Brewing Company on a small-scale part-time basis. In 2011, Seamus made the decision to move full-time into brewing.

The company’s website says there has never been a more exciting time to be part of the craft beer scene in Ireland.

“Craft beer consumers are becoming more numerous, confident and adventurous than ever before leading to demand for a wide variety of flavours and styles.

“Pubs and off-licenses are playing their part too and many now stock a broad range of Irish craft beer to meet customer demand,” it says.

Half of everything that the Carlow brewery produces is exported to more than 25 countries, including the US, France, Italy, Russia, Norway and Croatia.

Mr O’Hara, one of the craft brewing industry’s most recognisable pioneers, told the recent Teagasc National Malting Barely Growers Association conference that the sector is a growing business.

The craft beer products are still relatively small at 1.5% to 2% of the overall beer market in Ireland but with the right momentum there is a potential to grow this to 10%. “It is a great honour to be entrusted with the role of chairperson of the Irish Brewers Association, particularly as the Carlow Brewing Company celebrates its 20 year anniversary this year.

“The Irish Brewers Association, has represented the interest of brewers in Ireland since 1908. Since then the industry has changed drastically and in 2016 we continue to experience exciting developments, with new breweries opening across the country and established players expanding and investing,” he said.

Mr O’Hara said the number of microbreweries operating here has more than trebled since 2012. Consumers have never had more choice. His appointment association chairman was another acknowledgement of the importance of the craft sector to the wider brewing industry.

“I hope that I can use my experience in developing a small but successful brewery within a fledgling industry to guide the Irish Brewers Association over the next two years,” he said.

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