Samantha McCaughren: 'Is the rise and rise of the craft beer craze starting to go flat?'
No trend has unsettled the giant beer companies more over the last five years than the rise of craft beers. The likes of Diageo, which owns Guinness, has reacted by developing new beer brands that aim to capture that market and indeed the success of its Hop House 13 beer has helped buoy sales in its beer category in Ireland.
It's not just the brewing giants which have piled in to get a sup of the action. In 2012, there were 15 microbreweries in Ireland. Now there are 75.
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This has made it an intensely-competitive field but, on the face of it, the trends are encouraging.
In 2017, Irish beer consumption fell 2.1pc but consumption of craft beer rose 12.7pc, which looks like strong growth, albeit from a low base. However, a new report for Bord Bia and the Independent Craft Brewers of Ireland has found a number of microbreweries have failed over the past year or so.
According to its author, economic consultant Bernard Feeney, 10 microbreweries opened over the 12 months to the middle of this year. However, this was offset by the closure of five microbreweries, making it the lowest net increase in numbers since 2012.
Feeney reports that seven independent microbreweries have gone out of business in the past two years with the rate intensifying more recently.
Beer output by independent producers is on the increase as new entrants join the pitch. It was up 10.7pc in 2017, but this is actually a significant reduction in the rate of growth seen in recent years - in 2015 output grew 56pc and 2016 it grew 31pc.
Another interesting figure from Feeney's report shows that craft beer businesses are having extremely varied fortunes.
Those bubbling to the top of the sector are enjoying turnovers of more than €1m - but this applies to only one in five players. Others may be struggling to make sustainable businesses from craft beer. A third had turnover of less than €100,000 and, at the bottom of the barrel, one in six had a turnover of less than €50,000.
So 12 microbreweries had sales of only €300,000.
Ireland has a lower number of microbreweries per head of population than many other countries, a rate which is currently less than half of that in the UK or Czech Republic. So, in theory, there is plenty of room for expansion.
But, as Feeney points out, the failure of a number of microbreweries is a cause for concern. The issues facing craft beer producers are many.
As mentioned earlier, the large drinks companies have managed to capture some of the market through either their own innovations or by offering a bigger range of choice. These companies have massive marketing budgets, so when they throw their weight behind a brand it is extremely likely it will win some market share.
Meanwhile, international craft beers are also competing in this market, while distribution and marketing costs are a heavy burden for Irish companies, some of which have modest turnovers.
The sector employs more than 500 people and perhaps feels that more government measures should be introduced.
There are already tax incentives in place for microbreweries. However, based on some of these numbers perhaps Ireland has simply reached peak craft beer.
Like the next generation of an extremely wealthy family, Kerry Co-op has a problem many of us would envy - what to do when you inherit the fruits of tremendous success. Kerry Co-op owns around 13.7pc of Kerry PLC. Over the years the Co-op has distributed these shares to its members, allowing them to cash in on their extremely lucrative holdings.
Many farmers have over the decades made several hundred thousand euro from their stakes in Kerry. It is that type of wealth that has been generated by no other dairy co-op in the world and is a testament to the transformation of Kerry Group into a global ingredients giant.
However, for a new generation of farmers who may have inherited the family farm but have never enjoyed the cash windfall from the PLC, the rationale for the co-op holding a stake now worth around €2.2bn no longer stacks up.
If the shares were distributed among co-op members, the average pay day would be €165,000. For some bigger farmers and larger shareholders, the potential windfall is much higher, equating to several hundred thousand euro.
It appears the co-op is looking at spinning out a chunk of shares but will that be enough for the Kerry Co-op Shareholders Alliance, who are advocating for a sale of the stake? Probably not.
Sunday Indo Business