Brewing up a success story out of recession

With craft beer one of the few success stories to emerge from the recession, the Mitchelstown-based brewers Eight Degrees stand out as the brewmasters. And they’re only just getting started, writes Trish Dromey

The beer produced by Eight Degrees Brewing in Mitchelstown, Co Cork, is going down well at a time when demand for craft beer is going up.

“We are fortunate that the business is when the market for craft beer here is growing by 45% although the overall beer market is declining,’’ says New Zealander Scott Baigent, who co-founded the company two years ago with Australian Cameron Wallace.

Their aim was to offer a modern interpretation of traditional Irish ales, made with natural ingredients and without chemicals, additives, or preservatives. The result is an innovative range of beers served with a soupçon of wry antipodean humour.

“Like an Irishman on holidays in the Canaries, this beer has a red tint with a chilled out mellow feel,” is the description given for Sunburnt Irish Red.

Traditionally beer in Ireland has been created for pub consumption, but Eight Degrees is also targeting restaurants with their bottled beer and providing food matching tips.

Established in late 2010, the company is selling to around 500 outlets around Ireland, including pubs, restaurants, and off-licences. Late last year it signed a deal with a distributor in Italy.

Currently operating a brewhouse with the capacity to produce 6,000 litres of beer a week, the company is expanding this by 80% and expects to start exporting to the US, France, and Scandinavia this year.

Baigent says Eight Degrees is currently struggling to keep up with demand and that the increased capacity should allow the company to double sales.

The reason a New Zealander and an Australian ended up brewing beer in Ballyhoura is that both of them fell in love with Irish women and both shared a fondness for craft beer which wasn’t widely available in Ireland. A water engineer and a chartered accountant, they started brewing as a hobby but decided there was scope in the market for Irish craft beer as much of it was imported.

Mitchelstown was chosen because of the availability of a food grade unit at Coolenave which had water perfect for brewing. “The location on the Cork-Dublin road was important because we were going to supply both markets,” Baigent explains.

They began researching the idea in 2009 and by mid-2010 were ready to give up their jobs to spend a few months doing a brewing course in Germany. By the end of the year they had developed the business plan, spoken to banks, leased a food unit, and acquired some second-hand equipment.

“We sold our houses in Australia and New Zealand, got some grant aid from Ballyhoura LEADER, and took out some bank loans. In all, the initial capital expenditure was in the range of €250,000” Baigent reveals.

The fact the first brew in Apr 2011 was a disaster was a bit of a setback. “It tasted terrible and we had to throw it away. But we had invested time and money, given up our jobs, and we were determined to get it right.”

The next batch was perfect and ready just in time for a craft beer festival in Cork at Easter. “We started with Howling Gale Ale, and although we have since brought out four more beers, this accounts for over half of what we sell,’’

Eight Degrees found that word of its beer had spread on Twitter and it started getting inquiries from pubs, off-licences, and restaurants. By the end of 2011 it was selling to 100 outlets.

In 2012 an article by foodwriter John McKenna advocating that pubs start serving craft beer gave a significant boost to the business. “We expected a quiet January but the phone went wild and we were installing five new draught taps a week,” Baigent says.

The growth continued during the year, and production and sales quadrupled. In the summer the company was approached by Tesco Ireland, which is now selling its beers in 100 outlets.

Baigent says legislation which provides microbrewers with a rebate of half the excise paid is one reason craft brewers are able to compete successfully. “Craft beers may well be seen as one of the true success stories of the recession,” he says.

A finalist in the Small Firms Association National Small Business Awards in the emerging category, Eight Degrees is aiming to develop exports significantly this year.

As part of the strategy to tap in to the US market, it has developed a new product, a stout aged in whiskey casks. Currently the company is soliciting suggestions for a suitable name to be included in a range which has Knockmealdown Porter and Barefoot Bohemian Pilsner as well as Howling Gale Ale.