The Craft revolution is here to stay

Poles, known beer drinkers, are starting to develop a taste for small, craft brews and while these won’t push out lagers from the market, they are enjoying their small, albeit growing share in the sector By Jacek Ciesnowski On a weekend in late April, despite the Polish football league having a break, Legia’s stadium in the heart of Warsaw is packed with people. They didn’t came there, however, to see a game. They’ve come to drink beer. Ale aficionados from all over Poland are strolling through the arena’s most exclusive VIP stand. Yet, they’re not falling down the stairs or mumbling incoherently, they’re discussing a beer’s palate, the nuances in tastes or IBUs (International Bittering Units, which describes the bitterness of the beer). Images like this could be seen at the Warsaw Beer Festival, held twice a year (the next edition will be held in October). Similar events are held all over the country and are attended by thousands. Pubs and shops serving and selling only craft beer are popping up left and right and so are the breweries. Growing by numbers “Currently, there are some 150 companies that brew their own beers in Poland and there’s still plenty of room on the market. In comparison, Germany and the Czech Republic each have 800 such breweries and Italy has 700,” said Tomasz Kopyra, Polish beer pioneer and one of the founders of the Polish Homebrewers Association. He added that in the next decade there could be 300-500 local breweries in Poland. It needs to be pointed out, that the term “brewery” rarely means an actual brick and mortar facility. Most craft brewers in Poland don’t have their own infrastructure and they make their beers in so-called “contract breweries.” They lease space and equipment to make the beer with their own ingredients and recipes. “Building your own brewery is not an easy job. You need tons of paperwork, tons of hassle, financing, etc.,” said Kopyra, adding that many new breweries will be established in the coming years, with only some of them owned by craft brewers. The rest will be strictly contract breweries, making products for others. The beer revolution in Poland started at the same time as the one in the US, which kickstarted the movement all over the world - with IPA (see p.36). In 1975, Anchor Liberty Ale was introduced, inspiring thousands of beer geeks to start their own microbreweries. Forty years later, such companies have 11 percent of the market share in the US. In Poland, it all started with Pinta and its Atak Chmielu AIPA beer. “We knew we hit the jackpot after the first ten minutes of sales. It remains a passion for us though. It’s never a chore,” said Ziemowit Fałat, co-founder of Pinta. In less than five years, the movement reached 4.7 percent of the market according to KPMG’s latest report on the alcohol market in Poland (that figure includes craft breweries as well as smaller and independent breweries, like Ciechan and Amber) and that number should increase between 10-15 percent in the next five years, although projections vary depending on who you ask. “Craft beers have irrevocably changed the Polish beer market and have set many new trends. The future should bring a gradual growth of such breweries on the Polish market, when it comes to sales figures. Such companies are improving their distribution and brand recognition,” said Kopyra. Perfect consumers Beer enthusiasts are young, trendsetting and can afford to spend more on a product than the average beer guzzler. They’re the perfect customer and the biggest breweries in Poland are seeing that. Kompania Piwowarska (owned by SABMiller) sells the Książęce brand, which in the past included a rice lager. Grupa Żywiec (owned by Heineken) is also targeting beer geeks. “Even though lager is still the most popular beer style in Poland, craft is gaining a foothold. All the major players have seen this trend and are expanding their portfolios to include such styles,” said Magdalena Brzezińska, communcations director at Grupa Żywiec. Poland’s second biggest beer producer has its own line of craft-styled beers (sold under the Żywiec brand) and has switched production in one of its breweries to produce only craft beers (sold under the Cieszyńskie brand). Perfect cohabitation Even though craft-like beers made by huge companies are rated lower than their craft peers (on the ratebeer.com site, only one, Żywiec Porter cracked the top 50 Polish beers list), they have much better distribution and lower prices. Still, craft producers are not worried that the biggest players will push them out of the market. “Promoting less-known styles helps us, as it increases customer awareness and turns more people on to real craft beer,” said Łukasz Lis from Doctor Brew. “Big breweries are late to the game, they’re only copying the smaller ones. There’s no newness factor to it,” said Kopyra. He added that such companies have to attract normal consumers, not beer fans, making their products “bland.” Craft beer enthusiasts invest in a business, but also in a story: beer as a local product, produced by passionate local entrepreneurs. The customers are also enthusiastic, love to share their opinion online and can even influence trends. But even when you make the best beer, you still need clients which will keep you afloat. “Beer geeks are a very important part of our consumer base. But making, even the smallest business profitable, you have to find customers outside that niche,” said Fałat. And they hope that by mimicking their products, the biggest companies will help them reach such customers. “Making other, less-known styles popular, by introducing their own versions of them, big players, will increase consumer awareness and more people will seek out new tastes and styles,” said Lis. While not directly threatened by the biggest multinationals, small breweries have limited potential and realize that they will face barriers which they cannot overcome. “The biggest companies on the market have unmatchable budgets when it comes to marketing and reaching the mass clientele,” said Tomasz Wiśniewski, partner at KPMG and added that despite being a relatively fresh market, with many companies being established every month, there is a place for everyone. “Companies that are already entering the mass market with their products based on craft heritage will continue to grow organically. Potential takeovers of smaller craft breweries won’t help them with expansion. Merging smaller craft companies into bigger conglomerates won’t work either, as such companies are relatively small and merging would not give the scale effect needed to increase their size.” International recognition Even though the craft beer phenomenon is a relative novelty in Poland, its products are gaining recognition in other countries as well. Doctor Brew, which was founded last year, was named the second best new brewery in the world by Ratebeer (another Polish one, Birbant, was sixth). In another ranking, of the best lager beers, Steve made by Wąsosz was named the Best Lager in the World. Polish brewers have also started cooperating with other European breweries. In the last months, Polish brewers have produced beer in cooperation with: Norwegian Nøgne Ø, French Brasserie du Pays Flamand, Danish To Øl and many others. They’re also working on new products. Poland is another European country that has joined the so-called “craft revolution.” While the market is still dominated by PLN 3-4 lagers, more and more people are willing to splash out at least twice as much for the latest IPAs. Craft brewers are releasing new brands left and right in astonishing numbers (Doctor Brew in the first year of its existence released 17 new beers). Yet, it’s often hard to find them in stores a couple of days after delivery. With great sales dynamics (15-20 percent growth in sales each year) and optimistic forecasts regarding the future of the sector, craft breweries’ future looks brighter than a good Witbiers’ tint.