New Zealand’s craft beer sector is having to operate in a difficult space at the moment — inflation is high and cost pressures are continuing to grow. With cost absorption no longer a financially sustainable option for most, it means breweries and bars are being forced to put beer prices up.
For the craft beer drinker, with the cost of living not getting any easier to cope with, that means having to make some tough decisions.
Sean Golding, owner of one of Wellington’s most popular beer bars, Goldings Free Dive and several other bars and restaurants in the capital, says he’s seen a change in habits from Wellingtonians in his venues. “The cost of living impact on bars is much softer and slower than on restaurants,” Golding says.
“For example, if you come to the pub, you know a pint’s about $13. You’ll do six or seven of those transactions, you might buy a round. That’s much easier for people’s psyche, instead of when they go to a restaurant … they know they’re going to be laying [out] over $100.”.
Golding says he’s seen a 20 to 30 percent decline in business to his restaurants, but sales at his bars have grown by that amount. Despite the increase in bar trade and revenue being up on pre-Covid levels, he says his business costs have gone up significantly – more than 40 percent.
Golding has recently closed one of his restaurants, Shepherd, which he co-owned with Wellington chef, Shepherd Elliot.
As for what bars need to do to counteract increasing costs, Golding says the only thing businesses can do to survive is increase what they charge. “If you can’t sell something for what it needs to be, then you probably shouldn’t be doing it,” he says. “So I’ll keep pushing the prices up to where they need to be and when that stops working, then the bar isn’t working. It’s as simple as that really.”
“I suspect there’s been a few people who have come in and seen $16 and $17 pints and thought, “what is this, 2030?”. But to be honest, we sat at $10 to $13 pints for so long in this country … and I suspect there’s enough people out there who will still appreciate an experience and will pay [for that].”
Bars across Wellington have also been reducing the size of their pint glasses. In some countries ‘pint’ is a traditional measurement; a British pint is 568mls and an American pint is 473mls. But in New Zealand, ‘pint’ means ‘the largest glass size’ and ranges from about 400mls up to that 568ml UK measurement.
The switch to smaller glass sizes for some bars has not necessarily been cost-driven, though. Major glassware providers in Aotearoa have been unable to source the 425ml boston glasses common in Wellington bars and are instead offering a 410ml version of the same style, which look and feel the same. Jumping to the US pint 473ml size is also an option for businesses needing to replace their 425ml stock, but it is a costlier one.
Sprig & Fern Berhampore – like all the Sprig & Fern taverns across the motu – serve their beer in British pints. But they also offer customers the option of a ‘city pint’, which is a typical Wellington 425ml size.
The bar’s owner and operator, John Sommerfield, says the option is not primarily about offering a more cost-effective option. “Adding the city pint to our menu was a bit of a cheeky way to show customers the value they’re getting in what we call a ‘proper pint’.
“We had a few people comparing our prices to other pubs in the city, thinking ours were a dollar or so more expensive – once we could show them what the cost was for an equivalent size, they realised they were getting pretty good value here!”
Sommerfield says the rising cost in living hasn’t had much of an impact on the number of customers at his Berhampore tavern, nor on how much they’re spending. But he says Sprig & Fern’s Master Brewer, Tracy Banner, has seen a global trend towards lower ABV beers, which he expects will follow here – and help curb costs.
But further south, the general manager of Pomeroy’s Old Brewery Inn in Christchurch, Ava Nakagawa, says she has noticed a change in the spending habits of her customers. “We have noticed things like our lower cost items being our bigger sellers,” she says. “People will come for a pint and wings now rather than a pint and a steak – still [coming for] the pub experience, but lowering their spend.”
Nakagawa, who also owns Beer Baroness brewery, says that was the main reason Pomeroy’s decided to move from the British pint to the US pint as their standard serving size. “The average keg price is so much higher than what it was, and we couldn’t in good conscience expect someone to pay $18 for a pint. We felt by introducing a lower cost option, it meant people had a choice and a good amount of change from $20.”
But she says the decision to switch their primary serving size was not an easy one. “So many people are nostalgic for the English pint but we decided that we had to slow rising costs down and find a better way.”
While Nakagawa says the shift to smaller servings will mean punters will continue to get reasonable change from a $20 note for longer, back in Wellington, Sean Golding doesn’t think the days of the $20 pint are actually that far away. “I think the $20 pint will be here next year. Maybe I’ll do it first, just to get it out of the way!”