Crafty crowd brewing up a new beer market

It’s many people’s idea of living the dream: throw in your job and open a brewery.

Dave Padden, co-founder and head brewer of Riverside Brewing Company, is living that dream.

It’s not as idyllic as it sounds – “I’ve never worked harder in my entire life,” the 39-year-old says – but in business terms he seems to be on to a good thing.

Riverside is one of dozens of craft brewers, creating small-to-medium batches of hand-made, specialised beers, that have sprung up around Australia in recent years.

Craft beer accounts for just over three per cent of a $4.7 billion Australian beer market that is dominated by the giant, foreign-owned, Foster’s and Lion breweries.

But while the mainstream beer market is in long-term decline and beer consumption is at its lowest level in more than 50 years, craft beers are a growth story.

A recent IBISWorld report said there are more than 150 craft and boutique breweries around the country and forecasts the sector will account for five per cent of the Australian market within five years – a small but healthy share.

Higher-margin craft and premium beers – including imported brands – are expected to drive revenue growth in an increasingly fragmented market over the next five years.

Mr Padden and co-founder Stephen Pan opened Riverside in mid-2012, near the start of a growth period for niche brewers that is following in the wake of a much bigger boom in the United States.

Stephen, the owner of a plastics factory, met Dave, then working in IT sales and marketing and brewing in his backyard, when their children attended preschool together.

The idea behind Riverside grew, appropriately, from discussions over a few of Dave’s handmade beers at backyard barbecues.

“We had been drinking his beer for a couple of years at least,” Mr Pan said.

“Dave said `I’d love to do this full time’ and I said `why not, why don’t we do it?’.”

Both men threw in start-up money and Mr Padden worked part-time while establishing the business in an industrial premises at Parramatta, in Sydney’s western suburbs.

Riverside now produces about 10,000 litres of beer a fortnight and demand from pubs and bottleshops is increasing.

Mr Padden recently quit his sales and marketing role to work on Riverside full time and the pair are contemplating a move to bigger premises.

They are getting serious attention too, with approaches from big retailers Dan Murphy’s and BWS about stocking their beers.

“We’re trying to create beers that are as good or better than the market currently has,” Mr Padden said.

Mr Pan, 46, is not a brewer but calls it good timing that Dave was thinking about brewing full time just as he was thinking about another business investment.

“Talking to Dave and drinking his beers, I could see this business working – I had no doubts and still have no doubts,” he said.

“My belief is any small business, if you run it well, you can make money.”

“We started making a profit nine months in.”

Saturday marks the start of Sydney Craft Beer Week, a showcase for dozens of brewers, Riverside included, that will attract curious consumers and craft brew obsessives to events around the city.

Home brewing still has its amateurs making a kit up in the garage for a supply of cheap beer – but handmade beer has become a serious business.

Home Beer Brewing

Leave a Reply

Your email address will not be published. Required fields are marked *