International consumers are continuing to expand their palates for American-style craft beers.
As craft beer exports present consistent growth opportunities for American producers, internationally-distributing companies such as Grand Rapids-based Founders Brewing Co. note that overseas markets are making up an ever-increasing portion of their sales.
“Without a doubt, we see the export side of our business growing substantially,” said Founders President Mike Stevens. “There’s a thirst for American-style craft beer, and it’s on a global level. The youth of the U.K. isn’t as interested in drinking real ale or the basic ales their parents or grandparents grew up on. They’re bucking the establishment, and you’re seeing that across Europe.”
In a report released this week, the Boulder, Colo.-based Brewers Association said total craft beer exports last year grew to $116 million, the equivalent of 446,151 barrels. That’s a 16.3-percent increase from $99.7 million, or 383,000 barrels, in the prior year.
While Canadian consumers took in the lionshare of the volume for craft beer exports in 2015, Western Europe posted the largest increase (33 percent) in American craft beer imports, according to the report.
At Founders, total export volume grew approximately 40 percent between 2014 and 2015, Stevens said. Founders currently exports roughly 5 percent of its total production volume, but Stevens expects exports will double within the next four years, especially given the growing interest from regions such as Western Europe.
The Brewers Association also noted export growth in Mexico, where new laws now allow U.S. brewers to send their products south of the border. This is according to Mark Snyder, export development program manager for the nonprofit industry trade group.
Improving access to foreign markets served as one of the primary drivers behind Founders’ decision to sell a 30-percent stake in the company to Spanish brewery Mahou San Miguel Group, a deal that closed last year. So far, Founder’s partnership with Mahou San Miguel has “come in handy” for its global distribution, Stevens said. The Spanish company operates seven breweries in Spain and one in India.
While Founders has discussed producing its beer at Mahou San Miguel’s international facilities to serve local markets, the brewing company does not have plans to shift production overseas anytime soon, he added.
In addition to the growth in exports, Founders also is in the process of completing several expansion projects. The brewery recently leased a 190,000-square-foot specialty brewing facility and warehouse located at 900 Hynes St. SW in Grand Rapids, according to Stevens. Founders expects to produce between 200,000 and 250,000 barrels of beer at the new facility, which is scheduled to be completed in August 2016.
Founders also plans to break ground in April on an addition to its existing brewery. The new space will occupy the remaining undeveloped corner of the city block on which Founders is located, near Finney Avenue SW and Bartlett Street SW. The site’s most recent occupant was a Pacific Pride gas station.
The brewery will use the new space for additional fermentation and packaging equipment, Stevens said.
NAVIGATING INTERNATIONAL MARKETS
As breweries continue to push their products abroad, the Brewers Association has increased its educational efforts to members, particularly regarding quality control, Snyder said.
“The export market is definitely large and mostly untapped,” he said. “(But) the biggest thing is getting beer to consumers no matter where they are in the world, in the best condition possible.”
To that end, the Brewers Association has published a Best Practices Guide to Quality Craft Beer that lays out information regarding how long beer can be shipped at certain temperatures and other quality control tips for exporters.
Concerns regarding shipping beer overseas have led Founders and other breweries to increase their use of aluminum cans, which provide more protection than glass bottles when transported over long distances. While Founders still sends more bottles overseas than it does cans, Stevens said that trend is “rapidly changing,” especially as canning technology continues to improve.
Founders currently cans its All Day IPA, Centennial IPA, Dirty Bastard and Rubaeus brands.
Beyond quality concerns, breweries must also wrestle with a host of legal and regulatory challenges that come with the shipping of products to international markets, according to industry sources.
Each market has different regulations and nuances that make it challenging to craft a one-size-fits-all approach to exporting, Stevens said, citing the benefits of working with an experienced partner in Mahou San Miguel.
“They’re able to help us navigate our global beer distribution,” he said. “It’s a bit of the wild wild west. You have to hit the reset button on every market you open up and really understand the regulation and legal side. It can be complicated, but the consumer is there and they’re interested in what we’re doing.”