Survey on Polish beer market - contract brewers - rationale for their activity - spring 2019 - presented at Beeronomics 2019

1. THE ROLE OF CONTRACT BREWERS
IN POLAND’S BEER REVOLUTION
BARTOSZ WOJTYRA ADAM MICKIEWICZ UNIVERSITY, POZNAŃ
ŁUKASZ GRUDZIEŃ POZNAŃ UNIVERSITY OF TECHNOLOGY, POZNAŃ
JAN LICHOTA UNIVERSIDAD NACIONAL DE EDUCACIÓN A DISTANCIA,
MADRID, SPAIN
SZRENIAWA, 2018
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2. INTRODUCTION
Position of Poland in the European beer market
According to the 2017 production data, Poland
ranked 3rd in Europe, behind Germany and the
Great Britain.
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Considering the consumption of beer per capita,
Poland takes the 4th place, behind the Czech
Republic, Austria, and Germany.
The Brewers of Europe 2018

3. INTRODUCTION
Position of Poland on the European beer market
3

4. INTRODUCTION
Dynamics of beer consumption in Poland
Since the economic
transformation in the early
90s the beer sector in Poland
has experienced the highest
dynamics of beer
consumption in Europe.
➢ The effect of the
successful restructuring
process
➢ The marketing practices
have been changed
➢ The beer quality standard
has risen
➢ Beer became the most
popular beverage, not
vodka (!)
➢ Increasing incomes and
standard living
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5. INTRODUCTION
Modern history of Polish beer market
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1945 1989 2010 2011 2017 2018
Brewing sector
centralisation
Disappearing of many
breweries as direct
consequence of the war rage.
Long economic reconstruction
of the country, with the brewing
industry being highly
centralised by the state.
Consolidations, expansions,
and the privatization
of global beer corporations
After 1989, small breweries
collapsed, were taken over, or
incorporated into larger brewers.
Product standardisation period.
Homebrewers
Polish Association of
Home Brewers was
formally established in
August 2010.
Hop Attack by Pinta
The Polish beer revolution
officially began when the
Pinta Brewery brewed the
first batch of beer in the
style of AIPA.
Rapid growth
Above 300 brewing
entities on Polish beer
market follow Pinta’s
success.
Taxation
Reviewed
thresholds for
excise duty
reduced taxation
rates.

6. RESEARCH
Aim and scope
➢ Characteristics of Polish contract brewers'
activities and identification of their importance in
the context of the craft beer revolution.
➢ Active contract breweries established after 2011
➢ Entities operating in 2018
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7. RESEARCH
Methodology – Survey
➢ The online anonymous diagnostic survey for contract breweries’ owners in Poland
➢ April – May 2019
➢ The interview form with a standardized list of closed and open questions
➢ The survey was sent to all 119 breweries which were identified as operating on the market in
2018. In fact, 30 companies were inactive, suspended temporarily, or permanently closed in
as early as in 2018 or at the beginning of 2019
➢ 56 contract breweries (63% out of 89) took part in the survey
➢ The first part of the survey included general questions about the brewery and concerned:
the year of origin, the number, age, and gender of the founders, production and sales
volumes in 2018, the portfolio structure, the range and direction of distribution, the location
of hired stationary brewery and marketing forms. Other questions focused on the company's
development strategy,
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8. RESEARCH
Other sources
“The Beer Map” was used
as a starting material for
identification, of changes
in the number of breweries
and their locations. The
map was funded by a
group of Polish
“beergeeks”
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The data was verified through
Internet sources (ratebeer.com,
brewery websites, main social
media channels, etc.)
Further information comes
from the Polish Association
of Home-brewers and
interviews with people
associated with Polish
breweries.

9. CONTRACT BREWERIES
Typology of breweries in Poland
Two tax thresholds valid until 2018 are the basis for the unofficial classification of breweries into
three basic groups:
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1) small – annual production of up to 20,000 hl,
2) medium – annual production at the level of
20,000 hl up to 200,000 hl,
3) large – annual production at the level above
200,000 hl.
The fourth group are
contract/client breweries.
Wojtyra and Grudzień 2017

10. CRAFT BREWERIES IN POLAND
Definition problem
There is no official definition of a craft brewery in Poland, nor is there a definition
of craft beer.
In 2018 the Polish Association of Craft Breweries attempted to define a craft
brewery:
An entity that produces or orders beer production which at the same time:
➢ puts the product quality first; in the beer production process, mainly traditional
brewing, raw materials are used: water, malt, yeast, hops and the best and
most current brewing knowledge,
➢ is known for people making beer, a brewer or person responsible for
production are known by name and surname, and are reachable for the end
customer,
➢ is innovative; through constant work on developing recipes and production
technologies it contributes to the development of brewing knowledge,
➢ is independent; it is not personally or by capital connected with another
producer of beer (alcoholic beverages) which is not a craft brewery.
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11. CRAFT BEER IN POLAND
Craft or not craft?
For the purpose of the “Kraft Roku”, the biggest
commercial craft beer contest in Poland, the
definition of craft beer was created.
Craft beer must be brewed commercially in an
amount not exceeding 5,000 hl per year and by
a brewer known by name.
This definition has existed for several years and so
the craft beer environment have accepted it.
However, due to the fact that once small
breweries are now too big, it is difficult to include
them in it.
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12. CONTRACT BREWERIES
Definition and typology in Poland
A contract brewery is a brewing initiative, an enterprise producing beer using production
capacities hired from a stationary brewery with brewing installation. Contract breweries have
their own brewers who develop recipes and prepare beer independently. This definition
corresponds to the meaning of contract breweries in the world (Garavaglia and Swinnen
2017).
Contract brewing is an initiative which results in mutual benefits between a stationary
brewery, which does not fully use its production capacity and can rent it, and people who
want to share their brewing ideas with a wider group.
A specific form of the contract brewery is a client brewery. In the established nomenclature,
it is a company trading beer produced on commission by an existing brewery. A client
brewery orders the production of beer in a brewery and sells it under its own brand.
This type of contractors often meets with open criticism of the brewers' environment (Carroll
and Swaminathan 2002, Acitelli 2013, van Dijk et al. 2017).
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13. ➢ Resource partitioning theory, an
oligopolistic structure of polish beer
market, more and more homogenous
products (Carroll and Swaminathan
2000)
➢ The most often produced and sold type
of beer was and still is the International
Pale Lager
➢ The creation of a niche market for beer
brewed in different styles
➢ Anti-mass production movements –
variety needs (Hayagreeva 2008)
➢ Globalisation, justifying the penetration
of markets, products, innovations,
➢ The development of Internet and other
alternative communication channels
➢ An increase in consumers’ income,
➢ Millennials generation, they use the
opportunity to choose, look for flavours,
or experiments
➢ Home brewing
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CRAFT BEER REVOLUTION IN
POLAND
Phenomenon origins

14. CRAFT BEER REVOLUTION IN POLAND
Phenomenon origins
14
The Polish beer revolution unofficially began when the Pinta Brewery brewed and launched
on the market the first batch of beer in the style of AIPA – Atak Chmielu („HOP ATTACK”).
In fact, the Pinta Brewery is the sixth contract brewery in the history of Poland. However, only
the establishment of this brewery brought external effects and introduced the fashion for
craft beer to Poland as well as spread the form of brewing activity which is the contract
brewery.
Pinta's success has had many followers.

15. CRAFT BEER REVOLUTION IN POLAND
Course after Hop Attack
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The number of
breweries in Poland,
including contract
breweries and client
breweries, increased
between 2010 and
2018 from 70 to 372.

16. CRAFT BEER REVOLUTION IN POLAND
Course after Hop Attack
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The most popular groups
of styles in 2018 are:
India Pale Ale (530),
Pale Ale (296),
Stout (266),
Sour Ale (163),
Barrel Aged Beers (202).
The most fertile
breweries present about
40 new beers annually.

17. CRAFT BEER REVOLUTION IN POLAND
The role of contract breweries
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➢ From among all the types of
breweries established
between 2011 and 2018 the
largest growth rate of the
number of entities was
recorded by contract
breweries.
➢ From 5 existing in 2010 to
134 (119 contract and 15
client breweries)
➢ The average annual
dynamics index of 50%.

18. CRAFT BEER REVOLUTION IN POLAND
The role of contract breweries
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➢ large urban agglomerations and their immediate
proximity
➢ present in the most populous cities: 24 in Warsaw
which has the highest population number, 10 in
Cracow, 9 in Poznań and 6 in Wrocław.
➢ contract breweries dominate in the south of
Poland where the population density is the highest
The development of contract breweries in large cities
results mainly from the higher level of
entrepreneurship,
a close and large market for products, and the
urban lifestyle which is associated with, e.g. drinking
and eating out.

19. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey 19
Year of
establishment
2011 2012 2013 2014 2015 2016 2017 2018 Total
Breweries
in survey
0 1 3 5 12 6 8 21 56
Breweries
in total
1 1 4 8 15 12 15 33 89
Effectiveness of
answers [%]
0.0 100.0 75.0 62.5 80.0 50.0 53.3 63.6 62.9
How many owners of contract brewery?
Among the owners of contract breweries the
largest group are men aged 30-45. The average
and median age was 38 for men. In rare cases,
the owners are both women and men. One
contract brewery was founded only by women.
27%
38%
23%
13%
1
2
3
4

20. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey
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Do the owners have any
experience with home brewing?
Not all breweries that were classified as
contracted are the authors of the recipes of
beers they sell under their own brand.
Respondents from 11% of the breweries said that
they were not responsible for the majority of
beer recipes, so in this case we can describe
them as client breweries. This example shows a
very narrow border between these two types of
activity on the beer market.
Do the owners create
the beer recipes for own
contract brewery?
48%
45%
7%
all
some
none

21. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey
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How many hectolitres of beer the contract brewery
brewed and sold in 2018?
About 80% determine the sales range as
macro-regional.
In 9 cases we can say about the international
range. This may be due to the fact that some
breweries cooperate with foreign brewers and
take part in international beer festivals.
Only about 20% of the respondents define the
range of their brewery as regional, or at most
local.
The main methods of beer distribution from
contract breweries are wholesalers (51.8%),
direct sales to pubs and restaurants (26.8%),
and stores (19.6%). Only one brewery has
identified beer festivals as the main way of
beer distribution.
71%
21%
2%
2% 4%
<2000
2000-5000
5000-10000
10000-20000
>20000

22. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey
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How many percent of top-fermented beer
the contract brewery brewed in 2018?
How many premieres (new beers)
the contract brewery brewed in 2018?
5%
7%
13%
75%
0-25
26-50
51-75
76-100
50%
25%
21%
4%
1-5
6-10
11-20
more than 20

23. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey
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Why was the contract brewery set up? Why wasn’t the stationary brewery set up?
87.5% of contract brewery owners did not
decide to establish their own stationary
brewery due to insufficient funds and
investment related risk.
0% 10% 20% 30% 40% 50% 60% 70% 80%
the interest in craft beer and the desire to
commercialize the passion
the idea of an interesting business
the willingness to prove themselves after
home brewing experience
an initial stage before the establishment
of the stationary brewery
only adventure
change of profession
the desire for profit
imitation of others
the desire to revive local traditions
other

24. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey
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Why did the owners choose this stationary brewery? ➢ The longer the contract breweries exist
on the market, the more often they
change the brewery.
➢ According to the average, they use two
breweries, and according to the median
there is just one.
➢ Most often contract breweries hire brew
installation from one brewery.
➢ In the study the record-holder has
change the stationary brewery eight
times.
➢ Gryf Brewery was most frequently chosen
by contract breweries – nine times. It is
located in a large cluster of contract
breweries in the south of Poland.
Interestingly, beers from the brewery
produced as private brands are not
particularly popular.
0% 10% 20% 30% 40% 50% 60% 70%
size and type of brewing instalation in
the stationary brewery
residence location proximity
cost of brewing instalation hiring in the
stationary brewery
contract breweries opinion about the
stationary brewery
the stationary brewery product
feedback
brewing instalation availability in the
stationary brewery
acquaintance with the owner of the
stationary brewery
other

25. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey
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For 80% of the owners a contract brewery is only an additional source of income.
In most cases the main source of income is related to trade, customer service and gastronomy,
tourism and the hotel industry. A large group also consists of IT specialists and professionals
related to education and coaching (about 17% of breweries).
Is the contract brewery the main source of owners income?
93% respondents created a brewery with a long-term investment in mind, not as a short-lived
adventure with commercial brewing.
Was the contract brewery created with a long-term investment in mind?

26. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey
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Do contract breweries cooperate with other contractors?
➢ In about 50% of cases, contract brewers declare the cooperation with others of this type,
for example by implementing a new beer on the market. The cooperation is a strong
feature of this market and encourages further research on the sharing knowledge and
clusters in the brewing industry.
Do the owners plan to transform the contract brewery into the stationary brewery?
➢ Most of contract breweries will turn into a stationary craft brewery in the future. 21% of the
respondents answer that they definitely did, and 43% that “rather yes”. Only 3.5% of
contract breweries exclude this scenario.

27. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey 27
Beer labels designed in Poland have often
been rewarded.
In addition, contract breweries
professionally manage fan pages in the
social media.
The new media, participation in beer
events such as beer festivals or tap
takeover in multitaps, and labeled gadgets
in the survey are all indicated as the main
form of advertising.
In Poland contract breweries pay big attention to the marketing strategy observed in the visual
identity, which is created often by professional advertising agencies.

28. BEER ENTREPRENEURSHIP INCUBATORS
Outcome of diagnostic survey 28
Contract brewers in Poland rarely link the marketing strategy with the local tradition. The conducted
research and observation of the market by the authors show that ‘neolocalism’ is related to the
contract breweries market to a small extent.
The name of only 14 out of 89 classified
contract breweries can clearly relate to the
region of origin.
Cases such as the SzałPiw Poznań contract
brewery whose beer names are in dialectal
language are marginal.

29. CONCLUSION
Forecast
➢ Despite the criticism which often falls on this form brewing activity, it is hard to deny that
contract breweries are an important element of the market and the brewing industry.
➢ Contract breweries have become entrepreneurship incubators on the brewing market, and a
low risk admission to the brewing market. They allow you to gain knowledge and
experience. They are an initial stage before the creation of a stationary brewery.
➢ Their number is growing and some stronger external effects may be expected next years
especially if some of them are transformed into stationary breweries.
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30. THANK YOU FOR YOUR ATTENTION!
CONTACT:
bwojtyra@amu.edu.pl
lukasz.grudzien@put.poznan.pl
j.lichota1@alumno.uned.es
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