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Podcast Episode 09 - The Australian Craft Beer Survey

Podcast Episode 09 - The Australian Craft Beer Survey

Posted by Lachlan McLean on 29th Jul 2019

For episode 9, I chat to Beer Cartel Co-Founder and Director Richard Kelsey about the annual Australian Craft Beer Survey.

We discuss the history of the survey and the inspiration behind it, the results from previous years, the huge benefits the data gives breweries and consumers and much more.

For those who haven't yet taken the survey and gone into the running to win $500 of craft beer you can take the survey here.

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Full Text Transcript Below:

Lachlan McLean: Welcome everyone to the Inside Word. My name is Lachlan McLean from Beer Cartel, Australia's number one craft beer retailer. In episode nine I chat to Beer Cartel, co-founder and director Richard Kelsey about the annual Craft Beer Survey. We discussed the history of the survey and where it came from, the results of previous years, the huge benefits this data gives breweries and consumers and much, much more. Thanks for joining me today, Rich.

Richard Kelsey: Thanks, good to be here.

Lachlan McLean: So we're here today to talk about the Australian Craft Beer Survey, before we get into the background of it and the history of it and where it came from. I know the current one is out at the moment. How's it been going?

Richard Kelsey: So it's been going great, we've had just over 18,000 people that have taken part so far. So last year we had 18,000 people do it in total and at the moment we're having about 5,000 new people each week, taking part in the survey.

Lachlan McLean: Awesome. So how many do you hope to get to by the end of it?

Richard Kelsey: So it would be great to get over 20,000 this year. So it's one of those things, you kind of do a bit of a wait and see, you never know what it's going to be like until it all goes live and you go from there.

Lachlan McLean: And the breweries are all supporting it and getting it out there?

Richard Kelsey: Yeah. So one of the key things that we do each year, is try and get as much industry support as possible and as always they've been hugely supportive. So thanks to everyone so far, that's given it a bit of a nudge to their customer base and hopefully we get a few more this week.

Lachlan McLean: So it's into its fourth year?

Richard Kelsey: Yep.

Lachlan McLean: Where did it come from? Where the inspiration come from?

Richard Kelsey: So, I'll give you a really long version of it. So going right back to my university days, back in New Zealand, circa 19 or 2000, 2002. One of the subjects I did at university was market research and I did really well in that, I was the first one that I got kind of top grades and I actually topped the class.

Lachlan McLean: Wow, very good.

Richard Kelsey: And so I moved to Australia in about 2004, 2005, but before I did that, I actually worked for a local brewery in New Zealand and did a research project for them and I've got paid in great beer. They made amazing beer, unfortunately the brewery, Lindbergh Brewery's not around anymore, but their head brewer there is now a part of Emerson's down in Dunedin. But so I came over to Australia and then got a career in market research and that's when I worked, met Geoff Huens my business partner, who founded the business with me and so, we worked in market research, we did all sorts of projects. I ended up moving companies part way along my sort a career and then did some work with the likes of Lion Nathan's, I helped do research on One Fifty Lashes when that was about to be launched and so Geoff and I had talked about starting a business and we both had a really big love of beer and so that's how Beer Cartel got started.

Richard Kelsey: And then I was always reflecting on how we could actually do something that would be quite good for the industry and so we were always, I always thought that doing a sort of research survey would be kind of cool, but I could never kind of work out how it'd actually be of use to everyone in the industry. And then one year I was part of this sort of business building program and it hit on me that maybe what we'd do, is actually make everything public and get everyone in the industry to try and get behind it and if we did that, what we're doing is creating something that's going to help everyone that's within the industry.

Lachlan McLean: And you kind of launched that in 2016?

Richard Kelsey: Yep.

Lachlan McLean: How did it go in the first year?

Richard Kelsey: So it went a lot better than I kind of expected, I don't know what I was kind of aiming for at the start, but we had 6500 people take part in the survey and it instantly gave me a kind of thought that we might be onto something here. Followed up next year, we had 17,000 people take part in 2017, then 18,000 last year and hopefully-

Lachlan McLean: Hopefully even more this year.

Richard Kelsey: Exactly.

Lachlan McLean: The breweries obviously are the major driving behind the survey, in terms of getting all the people to do it. What's the benefit to them and why should they get behind it?

Richard Kelsey: So what we do is, because we put, everything goes back to the industry. So we have our public report that we release on our website and that is for anyone and everyone to see it. Outside of that, what we also do is create this industry report and that's, we take the findings from the research and we actually then add in some insights in to say, "Hey, this is what could, how it could actually benefit your business or have a think about this when you're doing things." So one example is, can pack sizes, so last year we had a big focus on limited releases and what sort of vessel size people want those in and from that, one of the big findings was people were after the smaller size vessels. So straight away that's something that breweries can think about and say, "Okay going forward, when I'm doing my Knicks lot of beer releases, then going for the smaller size format could definitely assist."

Lachlan McLean: And going through the years, so we've got three completed reports?

Richard Kelsey: Yep.

Lachlan McLean: Each of them have a different focus?

Richard Kelsey: Yeah. So what we do is, the idea behind the survey and why we created it was, because breweries and everyone else that operates within the industry, they don't have money to do research themselves. So they, everyone gets told that research is a really good idea, but they've got no idea where to start, they've got no idea on or it just costs a heap-

Lachlan McLean: Yeah, it costs a lot of money, a lot of time.

Richard Kelsey: So back, like a simple project when I was in market research full time, cost $30,000.

Lachlan McLean: Right.

Richard Kelsey: So it cost an absolute bucket load and so what we want to do is create something, that each year we're just building on knowledge, so we're not repeating the same thing over and over again, but we do have kind of measurements that say, "Okay, how's things trending?" But the idea is to build on the knowledge base, so that we're creating all this knowledge that people can benefit from going forward.

Lachlan McLean: And what have been those focus areas? What have we taken out of the past three surveys?

Richard Kelsey: You're talking about just the-

Lachlan McLean: What else were the major-

Richard Kelsey: The focus for each year?

Lachlan McLean: Yeah. What have been some of the major takeaways from those years?

Richard Kelsey: Yes. I mean, we've over time had quite a focus on independence and what people think about independence. We actually, I think it was in 2017, put forward a question that said, "Imagine there was a seal that could be used to identify an independently owned beer." And this was before-

Lachlan McLean: Before the seal came out?

Richard Kelsey: Before the seal came out, it was before the US released their seal, it was before the UK released their seal. So we've got kind of lucky there, I guess in foreseeing the future, but so that was really interesting and just seeing what that means to people and how things have changed over time. So if you go back to what was it, in 2018 we had the buyouts of Pirate Life, 4 Pines and Feral, and one of the big things here, so each year we look at what is the best brewery or what do people think are the best breweries in Australia. So 2016 we started with Feral number one, Pirate Life number two, 2017 it was Pirate Life number one, Feral number two and then 2018 after the buyouts, it changed so that Balter was now number one.

Lachlan McLean: So the independence has really come through and the seal, I guess is working?

Richard Kelsey: The seal, yeah it seems to be working. So we'll know a bit more about that, come the results for this year's survey. So when we looked at the seal last year, it was kind of saying, "Okay, what will the seal, what impact will it have on your future purchases?" This year we'll be able to say, "What impact has it had so far?"

Lachlan McLean: And you mentioned earlier that, about pack formats and can sizes and bottle sizes. That's been a major focus, I think last year or two years before, what was the takeouts from that?

Richard Kelsey: So each year we do look at preference for cans versus bottles and it has been a changing thing over time. So when we first started out, bottles were strongly preferred, but it's kind of reflective of what we're seeing, the products that we're getting in our store, it's becoming a lot more skewed now to cans and so I think you're going to keep seeing that preference shift and it could be quite dramatic this year.

Lachlan McLean: I guess on the whole pack formats and the craft beer consumer. One of the questions I know that was in it, I did this years and I think it's been in last year's, was the craft beer spend. Has that changed over time? Have we noticed that people, are people spending more or has it kind of just been consistent?

Richard Kelsey: No, it's been relatively consistent. So a lot of the measures that we do have, so we look at what's the most consumed style, we look at things like gender splits, so are there more males, more females coming into the industry and they've all been relatively static. I think the spend on average is around about $58 a week, something along those lines, maybe $68. I don't have it in front of me, but across a lot of things, things have stayed quite consistent. So I guess, one of the big changes has been that sort of preference, so bottles versus cans, but across things like favorite style, most consumed style, they're all pretty consistent so far.

Lachlan McLean: What was the favorite style? The most consumed style?

Richard Kelsey: So most consumed style, Pale Ale, probably unsurprising.

Lachlan McLean: Yep.

Richard Kelsey: So basically every brewery has a Pale Ale, so as you'd guess that's number one and favorite style, I think it was last year it was about 31%, was IPA and then Pale Ale was number two.

Lachlan McLean: Has that changed over the three to four years or is it just, that's the people that kind of move on from those styles to being replaced by the ever-growing consumer base?

Richard Kelsey: It's been relatively consistent across that time, it hasn't had any major changes. This year we actually added in a separate style category, just being New England IPAs-

Lachlan McLean: See how that goes.

Richard Kelsey: Yeah, I mean because as we know there's been a lot of growth in that over the last few years and it's one that everyone sort of seems to bring out a limited release of.

Lachlan McLean: On the 2018 survey, I know one of the major focus points was the CDS or the Container Deposit Scheme, specifically in New South Wales, but I know that's obviously been expanded to a lot of the other states now. What were the results for that and how did consumers kind of perceive the CDS?

Richard Kelsey: So overall there's very few people in New South Wales that are actually doing anything around the Container Deposit Scheme, so in New South Wales you've got these points where you take your recyclables to and you can take them there and you get some kind of compensation for them. So I think it's round about 5 cents a can, something along those lines and then you get a docket that you can then, I think get credited to your PayPal account or you can spend at certain locations. But when we looked at it, the majority of New South Wales people just aren't doing it, they said "That there's curbside recycling and that goes really well." So for the tiny amount that you'll get from spending your time to grab all your empties, do once a week a trip down to the container deposit point and then trying to put them into the machine and then you get some return, people just don't bother with it.

Lachlan McLean: I know with me, I live in Artarmon and the nearest one are on Sydney's North Shore and the nearest one to me is in Macquarie Center, which is probably what, 25 minute drive at the best and I just don't think people are willing to, you spend more in petrol than you're going to get back, but in South Australia it's been really successful there. Why do you think it's so much more successful there?

Richard Kelsey: I think it was because they started it before they had a curbside recycling scheme and I'm not even a hundred percent sure that they still, they have one now, but it's because of that it just became an ingrained behavior. Whereas here you're starting off with something new, that we know that people generally just have less and less time in their days and their lives. So to try and get them to do something that's out of their standard day, makes it tougher and tougher.

Lachlan McLean: If you are looking for new beers or an old favorite, be sure to check out the Beer Cartel website at If you haven't completed the survey yet, be sure to do so and you'll go into the running to win $500 of amazing craft beer, just hit the link in the bio.

Lachlan McLean: So we've talked about the last few years and I guess, what we took out of it and the questions that were asked and the answers that we got, but this year's 2019 survey, what's the focus area behind it?

Richard Kelsey: So we've got a few different areas. One where we sat down with them IBA, so the Independent Brewers Association and had a chat with them, I spoke to Jamie Cook there, who's the head of it and just wanted to understand what areas they'd like to do. So for them it was understanding better what people think independent beer means to them, so they take some measures that are actually used in a survey in the UK, for the UK Independent Brewers Association and so we've added that in for this year's one.

Richard Kelsey: Alongside that we had to have a focus on just the constant array of new beers that are coming onto the market, so what do people think of it, is it a positive or is it a negative? Is it something that's helping the industry or could it impact it longterm? So that's a couple of areas. Outside of that, looking at pack preferences, so four and six packs, four versus six packs and a case of 16 versus a case 24, so we know that there are different brewers that have these different case formats. A lot of people aren't necessarily using any science when they kind of go with a format, so we know that say for instance, Balter has a case of 16 versus if you were to buy a case of Little Creatures, it's going to be a case of 24. So is there anything around that, that breweries can think about? Outside of that, we also have what makes a great beer festival. So there's a lot of beer festivals out there and just understanding how people can make great beer festival.

Lachlan McLean: You talked about all the pack formats and the fours and the six packs, the sixteens and the twenty fours. Has there been any data in the previous, what we've been doing that's, does it match what we kind of think or does it kind of, has there been some surprises in all the results that we're doing? But I guess, most people kind of have I think, kind of have an idea of what they think should be correct. Does the data usually back that up or has it been some surprises?

Richard Kelsey: Yeah, normally it's been pretty reflective of what we would estimate, but I mean the great thing is that you've got 18,000 responses behind you to kind of accommodate it-

Lachlan McLean: Is it become sample size.

Richard Kelsey: I mean in a standard market research survey, you probably have around about a thousand people that take part in the survey and that's used just globally and it's very consistent. So if you look at political surveys, often they have like a sample of a thousand people. So we've got 18 times that in sample size and yeah, it does definitely help. I mean, one thing that did surprise me when we first did it back in 2016 and this was in part because we don't see it in our store, was just the amount of females that we're craft beer consumers. So when you think about the overall craft beer bar, 80% male and 20% are female and that surprised me, so one in five shoppers are female.

Lachlan McLean: It's definitely a growth area and I think it's something that more effort should be put into.

Richard Kelsey: Yeah, I think so. Definitely and if you go to, so while we aren't necessarily always seeing one in five shoppers being female, if you go to a bar or go to a brewery, then you'll actually see that's where you've got females drinking beer.

Lachlan McLean: There's definitely a lot of kudos to all the high end people in the industry and all the females working in the industry from Two Birds to Pink Boots, to all the people that get around and all that stuff, there's definitely a massive kudos to everyone that does all the work.

Richard Kelsey: I mean I think it's great, it's brilliant that we can now see female role models-

Lachlan McLean: Yes, absolutely.

Richard Kelsey: Because that means that it does provide a, something that people can look forward to and say, "I want to be like that person type thing." So hopefully female proportion over time grows even further.

Lachlan McLean: You mentioned at the top of the podcast, the amount of effort that goes into producing a survey in the market research, you said that "The kind of minimum spend for one of these surveys, for say a thousand people is $30,000."

Richard Kelsey: Yep.

Lachlan McLean: And obviously that takes a lot of time and a lot of effort to do it. Why do we do it? What does Beer Cartel do it? What's the benefit to us?

Richard Kelsey: So I mean-

Lachlan McLean: To you?

Richard Kelsey: So it's a couple of things, we've always wanted to give back to the industry, so the industry's been so great to us. I mean, we started back in 2009, this is going to be our 10th year, at the end of this year and so we've always wanted to give back to those that have supported us and helped us on our journey. So that's part of it and the other thing is, as a business we've always had a outlook on wanting to help be educators, so when people get into craft beer they go on a journey. So you start with, it can be something as basic as James Squire, One Fifty Lashes or Coopers Pale Ale and you see, what we see is people go on a journey and they evolve over time. They go, "I really like this, now I want to learn a bit more about it." And so we've always wanted to be kind of the facilitator of that and so it's in part why we do the survey, it's in part why you do the podcast. We've also got our Facebook group, so all of those things we see as helping people on their craft beer journey.

Lachlan McLean: Absolutely. So we're in our fourth year this year, it's been incredibly successful and that has actually led to a number of awards for Beer Cartel and yourself. What were they?

Richard Kelsey: Yeah, so the first award I think was at the back end of 2017 and it was a global award from the website platform that we're on and it was a cash award, sorry. So we won 3000 US dollars for the best marketing innovation globally on that e-commerce platform, so I think we're up against 80,000 or there's 60 or 80,000 stores on the platform and we managed to clean sweep it there. Then last year we went pretty well, so we won within the online retail space, they have the Online Retail Industry Awards called the ORIAS and each year you see the same businesses take out every single award. So Booktopia in Australia is really big, Kogan takes a lot of awards, Appliances Online, if you're into fashion, Showpo is a big one every year and so we're against businesses that are doing tens, hundreds of millions dollars and we took out best marketing there as well, which was fantastic. And then we won last year at the Australian Retail Awards, we won best marketing, I think it was best marketing innovation again and we're finalists at the National Retail Awards this year for the same thing.

Lachlan McLean: I remember there was a good period that, you have you're award season in Hollywood and whatnot and I think there was a good month or so there where, I think you were going away to Melbourne or wherever for an award every couple of weeks and then coming back with something. So it obviously does really well, I was kind of pressing you for how this one's going. Is there any early results?

Richard Kelsey: So I always a hold far on everything until we get the full data, I don't want to give anything away too early, so it's going to be a bit of a watch this space until all the results been, until all the data's been collected and we've looked through it thoroughly.

Lachlan McLean: On that with the results, when can we expect them?

Richard Kelsey: So typically we do it end of August, so and then at the same time we draw the prize for $500 to spend on craft beer, which is basically anyone that completes the survey goes into the draw to do that.

Lachlan McLean: So we talked about why breweries should do it, we talked about why we do it, but from the consumer point, why should they do it?

Richard Kelsey: So I mean, number one is everyone that takes part, you are helping the industry. So you're providing your thoughts and your feedback on how you think and operate that helps the industry better understand who its consumers are and that's a fantastic thing and I've got to say a huge thanks to everyone that takes part in it each year. Outside of that, we put the results on our website so that everyone can see them, everyone can read them, digest, think about them, talk about them. So we see within the Facebook groups each year after the results are released, that there's a lot of discussion about them and the final thing is, you go into the draw to win $500 to spend on great craft beer.

Lachlan McLean: I think from a consumer point, the craft beer industry in Australia has changed massively in the last, I'll say five years, but it seems every year it kind of ramps up and changes again and the information that you get from the survey, not only kind of helps that, but also kind of evolves it in the way that the consumers kind of want it to go and I think the industry will only grow with it. The survey, like you said, four years now, where can we see it going? What's the plans for it?

Richard Kelsey: So it's just each year to continue to learn and that's what it's all about, so the more knowledge we can get to share amongst the industry, the better off everyone is. So each year, what we do is we actually go out to the industry and say, "Help us, give us any problems, any ideas that you'd like to learn more about." And from that we then construct the questions, so it's an evolving based. What it looked like in 2016 is going to be completely different to what it's like in 2026.

Lachlan McLean: With the ever growing craft beer base, I think it's, you can probably tell me the numbers better of how many people drink craft beer in Australia now, 6%?

Richard Kelsey: Yeah, round about that.

Lachlan McLean: So 6% and that's growing every year, so obviously as that grows, the results in the craft beer survey and the number of people doing it will grow. Have you got a number in your head that you'd like to hit at all eventually?

Richard Kelsey: Longterm?

Lachlan McLean: Longterm.

Richard Kelsey: No, I kind of keep it open. One thing we saw last year, was that it was actually quite hard to increase from 17 to 18,000 because Facebook, which is often the medium that the survey gets promoted, that they made it much harder for businesses to get visibility on their posts. So basically the growth of the survey can be driven by just getting publicized on the social media and then the other thing is, just being shared through people's email databases. So as those grow over time, then more and more will be sharing it and more and more completing it hopefully.

Lachlan McLean: Well thank you so much for joining me today. For people out there listening, the survey will be open for another week or so?

Richard Kelsey: Yep.

Lachlan McLean: So if you haven't done it, go find the link on our Facebook page or I'm sure there's breweries that have shared it as well. If you haven't done it yet, like I said, you can go into the draw to win $500 for the craft beer, it's a fantastic prize every year, but thank you so much for joining me and I can't wait to see the results.

Richard Kelsey: Thank you very much.

Lachlan McLean: The Annual Australian Craft Beer Survey has become the industry standard for market research and consumer insights. If you haven't yet completed it, be sure to do so and ensure that the craft beer industry continues to go from strength to strength. Once again, thank you so much for Richard for joining me today and if you have any questions, please let us know on our Facebook group, Beer Cartel Craft Beer Collective. If you'd like to continue to stay up to date with the latest in the craft beer industry, please hit subscribe at either iTunes podcast, Stitcher or wherever you listen to your podcast. That's it for today, I'll see you next time.