Contract brewing is a popular and accessible way for many New Zealand breweries to get their beer to a wider audience, but are consumers aware where the beer in their glass is being made?

As a non-native working in the New Zealand beer industry, one of the most surprising things I noticed upon arriving here last year was the availability of good beer in supermarkets. Walking into a New World for the first time in September last year, I was astounded to be met by a healthy selection of vibrant and colourful cans and bottles from some of the country’s finest brewers.

Such was the scale and spread of good beer in New Zealand supermarkets, I developed an exaggerated perception of how big craft beer was in the country. “These breweries must be absolutely huge,” I thought to myself as I perused the shelves with utter glee, picking up cans of Behemoth, Garage Project and Epic as I pleased. After all, how else could they possibly be making enough beer to service every supermarket from Auckland to Invercargill?

The answer, as I have of course since discovered, lies in contract brewing. By outsourcing the production of core range beers to specialist facilities, or other breweries with spare capacity, craft brewers are able to hit the sheer volumes of beer required to meet supermarket contracts, and focus on brewing limited releases and experimental beers in-house.

Contract brewing is certainly not unheard of in the UK. Indeed, Yeastie Boys – one of the pioneers of the model here in New Zealand – have continued to utilise contracting since decamping to the UK, producing its beers at BrewDog, West Berkshire and, most recently, Fourpure Brewing Co. in London. However, it is nowhere near as widespread in Britian, which naturally left me wondering, why is it so popular here? And are customers aware of where their beer is being made?

One of the reasons for the initial popularity of contract brewing in New Zealand was the relative cost of importing stainless steel to a country far from the rest of the world, according to beer writer and Pursuit of Hoppiness editor, Michael Donaldson.

“Certainly in the early days to import a brewery system from the United States or Europe would have been hideously expensive, and people just couldn’t afford it,” he says. “With the relatively low volumes involved in New Zealand as well, it would be a huge investment in stainless steel, especially if you were just wanting to tip your toe in the water.

“A lot of the early pioneers in New Zealand were using repurposed dairy equipment because the cost of an actual physical brewery was so high. The big breweries had cleared the landscape and there wasn’t any of the infrastructure to make that kind of equipment here,” Donaldson says.

In the last 10-15 years, equipment costs have fallen thanks in part to the availability of cheaper Chinese brewing systems, but the contract model has still persisted. Donaldson estimates there are currently around 30 contract-only breweries (that don’t own any stainless steel of their own) in New Zealand, as well as a whole host of others – such as Fortune Favours, Garage Project and Fork Brewcorp – outsourcing to varying extents in order grow their brand without having to invest in expensive new equipment and hire additional brewing staff.

The contract model can also be hugely beneficial to larger producers looking to utilise spare capacity. Deep Creek Brewing Co, on Auckland’s north shore, brews beers for a number of other breweries, including contract-only brand Behemoth Brewing Company. Deep Creek’s co-owner and sales and marketing manager, Scott Taylor, says that the possibility of contract brewing was a key factor when deciding how large to build its new brewery.

“I think it is a personal thing for every brewery to decide, but there are definite benefits to doing it,” he says. “You can generate funds by using your spare space and there’s no point having stainless steel that is just sitting there when you could have someone else helping to pay it off.

“Of course, the flipside is that the brewery you are doing it for has the potential to grow, so you have to ensure you are leaving enough capacity to grow your own brewery as well. We are getting pretty much to our capacity right now, and so while we are being approached by more potential customers all the time, we are just don’t have the tank space and are having to turn people away,” Taylor says.

Indeed, the contract model is so lucrative that production facilities that used to specialise in wine are now converting to beer. In 2017, B-Studio, a contract wine-maker from Napier announced plans to build a huge, purpose-built brewery. Completed later that year, the site features a highly efficient Krones brewhouse, alongside top-of-the-line bottling and canning lines.

“We got involved in the wine industry when it was in the middle of its evolution here in New Zealand,” explains B-Studio director Simon Gilbertson. “The attraction of getting into craft brewing was that we could be getting in on the ground floor, because it hasn’t really been around that long, particularly here. We felt there was an opportunity for us to help shape a certain part of the market.”

Gilbertson is at pains to stress that B-Studio encourages breweries to be present throughout the contracting process, will not aid with recipe development, and is best used as a service provider for high-volume, consistent, core-range beers.

“We aren’t the company you go to in order to put crayfish tails and grandma’s underpants and 15 different sour yeast varieties into your beer with,” he says. “We are about making reliable, high-quality everyday beer for our customers.”

Wellington’s Garage Project was one of B-Studio’s cornerstone customers, and the brewery now uses the facility to produce a number of its core-range beers. Co-founder Jos Ruffell says he didn’t initially intend to use contracting, but that by working with the Hawke’s Bay facility, the brewery has been able to invest in more ambitious projects, including research and development in yeast and hops.

“It would have been a lot easier for us when we were starting out to have used a contract facility, as a lot of other breweries were doing at the time,” he says. “But instead we chose to spend a great deal of time, effort and care into converting an old garage in Aro Valley to produce beer on a tiny 50L kit because that was how we wanted to approach it and what was important to us.”

However, having grown very quickly in a short space of time, Garage Project soon found that demand for its core beers was restricting what it was able to produce at its small Wellington site. Rather than turn to equity crowdfunding, or sell out to a multinational, the brewery chose to partner with B-Studio, and even helped with the design of the production brewery.  

“Working with the guys at B-Studio has enabled us to focus on some really exciting stuff like our Wild Workshop, the Hapi Research Project and exporting our beers directly to Australia, which we think ultimately is what our customers are more interested in,” Ruffell adds.

Not everyone agrees, however, that contract brewing is the way forward. There are some in the industry who believe that the arrangement goes against the values of authenticity and transparency that craft beer drinkers cherish – and could lead to a lack of accountability across the supply chain. In 2016, the reputation of Nelson brewery Townshend was severely damaged after a brewing and distribution deal with Tuatara went sour, leading to numerous customer complaints and the former bringing all of its production back in-house.

Speaking at the time, brewery owner Martin Townshend stated he felt he had put too much trust in his contract partner, but called for tighter regulations showing where, when and by whom beer was being produced. 

“Even though that beer has got my name on it – we didn’t have a single thing to do with it,” he said. “I think contract brewers should be required to show where the product is made, by whom and when.”

To avoid accusations of a lack of transparency, Garage Project labels their beers as either AV (Aro Valley), WW (Wild Workshop) or HB (Hawkes Bay) so consumers know where the drink in their hand was brewed and packaged. They also maintain a regular presence on site at B-Studio to oversee the production of its beers there. 

“I don’t think there is a transparency problem unless someone is trying to not play it with a straight bat,” says B-Studio’s Simon Gilbertson. “That said, as a service provider we work best when a natural home for the brand already exists. Someone like Garage Project has a natural home for the brand [in Wellington], so if consumers want to go and talk to Pete [Gillespie – Garage Project head brewer] about a beer that is made at B-Studio, they can do that.”

The debate over contract brewing in New Zealand resurfaced once again earlier this year, when the Society of Beer Advocates (SOBA) announced Behemoth Brewing Company as its Brewery of the Year for 2018. Privately, some brewers expressed their disbelief that a brewer currently without a physical brewery, and which doesn’t make its own beers, could possibly be awarded the title.

Gilbertson, however, defends the decision. “For as long as I have known Andrew Childs [at Behemoth], he has been desperately seeking a home for his brand,” he says. “If you look on the back of a Behemoth can you will see our address on there. As long as you are telling people, I don’t think there is an issue.”

Behemoth is currently crowdfunding to finally create a physical home at the top of Auckland’s Dominion Road, but are likely to still contract brew their core range.

As an outsider, coming from a country where the concept of a local brewery and – by extension – the local is embedded in the DNA of our drinking culture, I have to admit to still finding the idea a little jarring. Donaldson, however, doesn’t think most New Zealander’s are particularly bothered by who is brewing their beer.

“Behemoth is brewing half a million litres and a lot of that is going to people who are buying it off supermarket shelves,” he says. “They love good beer but they are not deeply invested in the business, and they certainly wouldn’t be able to tell you where it is brewed.

“You have to separate the real craft beer geeks from the wider beer consumer, but I think as a rule most New Zealanders don’t really care.”

A version of this article originally appeared in’s Ferment Magazine, and has been reproduced here with their permission.

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