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ABCo turns contract brewer as Asahi scales back

August 13, 2015
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The Australian Beer Company (ABCo) now has a sideline business in contract brewing, while Asahi Premium Beverages is no longer actively pursuing the segment.

ABCo – the Coca-Cola Amatil and Casella joint venture – has quietly picked up a number of contract customers, including retailer Woolworths for its John Boston private label brand.

ABCo general manager Derek O’Donnell declined to comment on the move into contract brewing, which highlights the excess capacity at the Yenda, NSW facility, even though the Yenda brand is reportedly ahead of its sales targets. ABCo also brews Coors there under licence, with Samuel Adams Boston Lager likely to follow.

Multi-beverage supplier Asahi Premium Beverages, meanwhile, is scaling back its contract operations.

“We’ve just decided to focus more on the growth of our own brands that we are having success with,” chief operating officer Scott Hadley told Australian Brews News.

“Where we have existing commitments, of course we will honour them, but we are not looking to expand in this area.”

But there will be no shortage of capacity in the market, with Icon Brewing’s 150 hectolitre contract facility having opened in Prestons, south west Sydney early last year.

“We’ve got over 20 customers now and we’ve produced at least 60 different beers. We’ve picked up some big names recently,” Icon director Chris Lee told Australian Brews News.

Among Icon’s known customers are Balmain Brewing and Young Henrys, which recently announced it would produce cans there. Lee said some of the others prefer their contract dealings to remain confidential.

Icon Brewing's Prestons facility in south west Sydney

Icon Brewing’s Prestons facility in south west Sydney

Meanwhile, WA-based Australian Quality Beverages is actively working to secure additional contract production, parent company Gage Roads said last week.

And Melbourne’s Hawkers Beer is expanding its brewing capacity, in part to cater for its growing roster of contract customers, co-founder Mazen Hajjar told Radio Brews News.

The established player in the contract segment, Brewpack, has continued to add capacity at its Smeaton Grange facility in south west Sydney, with a second brewery in Goulburn to follow.

“If we didn’t see a future in it, we obviously wouldn’t be designing and specifying and buying land to build large facilities, but we’re quite lucky because we hit the ground pretty hard with a pretty solid block of clients,” Brewpack CEO Anton Szpitalak told Australian Brews News.

However, while the broader craft segment continues to grow at around 20 per cent a year, Szpitalak said the reality is that there are very few independent brands of a scale that an entire business can be built around them very quickly.

“There’s an enormously large number of companies that are in the embryonic stages of growing their brands. Those guys don’t need 8000 cases of one SKU, they need 600 cases of a SKU to get them started,” he said.

“You have to nurture a lot of young brands. I have one client today who did their first run with me 18 months ago and it was a 50 hectolitre batch of beer. That was the first packaged beer they‘d ever made. Today they do 200 hectolitres every two weeks.”

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