Epic in liquidation: how did it happen?
Auckland Beer Week kicks off. Kristen Bell's stunning claim about her kids' love of non-alcoholic beer. Sapporo's Stone-cold audacity. Inside the rise and fall of Bud Light.
It’s a somber Friday beer friends, as we digest the news of Epic Brewing’s liquidation.
July 26 — the day the brewery went into liquidation — should become a landmark day of sorts; like the day we learned Emerson’s had been sold to Lion. It marks a tectonic shift, if not in the industry itself, at least in our (my) thinking about it.
I wrote only three weeks ago about the pending … damn, have to say it now … armageddon and wondered why the brewery closures hitting the wider global craft world hadn’t hit New Zealand.
Scroll down in the post below for that take…
Admittedly, with Epic they had a plan — but it required a giant leap, Evil Knievel-style across a ravine to a soft landing on the other side. But the ravine widened mid-air and they didn’t make it. Theirs was a spectacular, and sudden, crash but others will be edging, hanging on by their nails, to the same spot.
While the goalposts moved for Epic, the underlying truth is they were probably underpowered to start with. The fact their would-be investor was helping them with cashflow is indicative of the wider problem that is touching every supermarket players in this business, especially those who contract brew.
Just the day before the Epic news broke I was talking to another brewer who said he’d been doing the numbers and that it was now “impossible” for a brewery of their size (not small, not big) to put beers into six-packs at the price that will sell in supermarkets.
As Epic found, putting prices up resulted in plummeting sales. People are spending less, the cost of making beer is going up astronomically (thanks excise, CO2, freight, malt, packaging …) and prices are staying the same. I expect more breweries will be having the same cashflow problems Epic faced — if they are relying on those supermarket aisles.
But it’s the contract brewing model that has proved too hard. Contract brewing at the big outfits (Steam, bStudio) requires minimum orders and that means huge outlays for beer that you can’t sell all at once, so it has to freighted, be cool-stored, freighted again. Cash out is a wave, cash-in is a trickle.
There’s lots more to say about this and the wider industry, but the bottom line is that it’s a moment to pay homage to Epic as the brewery that led New Zealand on a journey towards hoppy beer. Like Richard Emerson in the 1990s, Luke Nicholas was a torch-bearer in the early part of the 21st century and his beers were an inspiration and an integral reason why so many of us fell in love with craft/hoppy beer.
The liquidators hope to sell the brand, and if that means Armageddon IPA and Hop Zombie live on, that will be great. Bizarrely, I hope a big brewery like Lion or DB step in, buy the brand and keep it alive, and ensure all those who are owed money are paid, and that the staff (all great people) are looked after.
The taproom in Onehunga is open this weekend and I’m sure it will be slammed judging by what I’ve seen and heard and already.
For my part, I’ll be having this tonight …
Beyond the Pale Ale
Auckland Beer Week kicks off tomorrow and there are some great events on in the coming week.
The highlight for me will be the Auckland Pale Ale Challenge. I’m enthused about it, partly because I had a small hand in bringing it to fruition and mostly because I love a great pale ale.
The competition was dreamed up by publicans Travis Field (Fantail & Turtle) and Ewen Thorpe (16 Tun). While established competitions such as tonight’s Malthouse West Coast IPA Challenge and the Smith’s NZ IPA Challenge, won last month by Parrotdog, have dozens of entries, the APA Challenge is starting small with nine Auckland breweries selected — Epic (yes), 8 Wired, Sawmill, Alibi, Deep Creek, Liberty, Urbanaut, Black Sands and Hallertau.
The breweries’ entries will be poured at six Auckland free houses over the course of the Auckland Beer Week: The Lumsden, 16Tun, Fantail & Turtle, 605 Drinkery, Vulture’s Lane and Birkenhead Brewing.
The winner and the people’s choice winner will be announced at special mini-festival at Fantail & Turtle on Saturday, August 5 as part of Micro Beerfest.
In coming up with a pale ale as focus of the competition, the idea was to create a beer designed for relaxed on-premise consumption — easy-drinking, balanced, sessionable and flavoursome!
And speaking of challenges: It seems a given that the Malthouse West Coast IPA Challenge People’s Choice Awards will go to Epic, right? I’ll bring you all the low-down next week.
Beer of the week No 1
White Stout is making quite an impact this winter! This is hands-down one of the best beers I’ve had this year in terms of the attention to detail in the flavour profile. There’s coffee, courtesy of People’s Coffee, cacao nibs, vanilla bean and the tour de force: some Thomson’s manuka-smoked white whisky. The flavours waft and swirl, with different elements coming to the fore at different times, but the overall effect is a chocolate-coated coffee bean soaked in whisky. Superb.
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