Hardywood Park Explores Global Distribution

(Hardywood Park’s Virginia India Pale Ale (VIPA) is one of its flagships destined for global distribution)

By Jeff Maisey

Hardywood Park Craft Brewery will likely always be a Richmond-based independent brewery committed to using local, fresh ingredients, but that’s not slowing its ambition to become a national brand and gain limited traction in international markets.

“Hardywood was been accepted into the Virginia Leaders in Export Trade (VALET) Program, with the January 2017 class,” said Paul Grossman, executive director, Virginia Economic Development Partnership.  “This is a two-year long international sales acceleration program.  Twenty-five (25) companies per year are accepted into the program from across Virginia. As a participant, Hardywood receives $30,000 to offset approved costs of entering international markets, as well as access to a consortium of international experts who provide pro bono advice, such as attorneys, accountants, translators, etc. Hardywood prepares and executes an international business development plan under the guidance of VEDP International Trade staff.  Companies who graduate from the VALET Program increase their international sales during the two years by an average of 54%.”

Hardywood has begun selling small quantities of craft beer to South Korea and, in June, will begin limited distribution of flagships Singel, Pils, and VIPA in the United Kingdom.

Richard Miller, a London-born Raleigh, NC resident, is a longtime friend of Hardywood Park founders Eric McKay and Patrick Murtaugh and serves as an advisor/consultant in the role of export director. His professional background is in international development.

“Essentially, we are just starting to explore international markets,” said Miller. “One of the really cool things about Virginia, as a state, is it is very supportive of businesses that are looking to learn about international markets and potentially start exporting.”

According to Miller, Hardywood Park is currently focused on expansion of domestic markets.

“From a branding perspective over the long-term, our goal and mission with the company is to become among the most respected US brewers,” Miller said. “I don’t think we can just consider our patch to be the local market. We want to try and reach craft beer drinkers everywhere, ultimately. So the state (through VEDP) is giving us a pretty good opportunity to become more knowledgeable about international markets.”

Some of the resources Hardywood Park will take advantage of including joining representatives of VEDP on trade missions. One such research trip will include a visit to Australia in October (2017).

Exploring the Australian market would actually be a coming home or sorts for Eric McKay and Patrick Murtaugh. The two Americans, who have known each other since they were toddlers,  met-up while traveling in the Land Down Under, in 2001, at a sheep station farm called Hardywood Park. It was at the farm where McKay and Murtaugh were served then-owner David Crawford’s homebrew and the seed was planted for what is today Hardywood Park Craft Brewery in Richmond, Virginia.

In addition to sentimental ties, Australia is an attractive market for beer exporters.

“Overall, the Australian craft beer industry is experiencing a period of strong growth and popularity, said Jenny O’Sullivan, International Trade & Investment Consultant (Dedicated International Trade Consultant to the VEDP Intl Trade) at Foley & Associates Pty Ltd. In Sydney, Australia.

“Demand for craft beer has fuelled continual growth in the Australian craft beer industry, with Euromonitor International forecasting that the total consumption (volume) of ale will grow 5.8% per annum between 2015 and 2020.
“There is a growing perception of craft beer as a more ‘serious’ drink that can be enjoyed at celebrations and events. Beer appreciation, tasting, education and food matching activities have also grown in popularity, with Australian beer festivals attracting national and international tourists.”
Exports of American craft beer to the Asia-Pacific region experienced a 38% increase in 2014. As the craft beer industry in Australia continues to experience growth, driven by demand from consumers for “a more boutique, unique and premium product” (Deloitte Agribusiness Bulletin), there has been a change in the general perception of craft beer.
“The emergence of American-style bars and restaurants throughout Australia highlights a growing interest in US food and alcohol,” said O’Sullivan. “These venues (Surly’s, Mr G’s), styled after authentic American small bars, contribute to the on-premise availability and visibility of a diverse range of imported US craft beers.”
According to leading liquor retailer Dan Murphy’s, innovation and advanced brewing technologies in the US are a major source of influence for Australian breweries and craft beer consumption.
US beers are starting to appear on more taps and also in the larger retail outlets indicating an acceptance of US beers.
In a 2016 survey conducted by Beer Cartel, in which 6,500 Australian craft beer drinkers took part, Australia was voted as the ‘Best Beer Producing Country in the World’ with 35% of votes, followed by the USA with 23%.

Whether Australia or other international markets, research trips include meeting with potential business partners, distributors, customers, and all related aspects of the business development. Hardywood participated in a VALET Program research trip to the United Arab Emirates (UAE) in February.

While exporting to such faraway markets as the UAE (Dubai, specifically) and Australia is far from a done deal, Richard Miller is mapping out a plan.

“We’re shipping liquid – a heavy product – so it tends not to be economic to send by air,” Miller said. “You put your beer into a refrigerated container and goes on the water to your destination.”

Miller is keen to learn the taste preferences and trends in various markets before matching specific Hardywood brands.

“The whole learning process includes getting samples of our beers over to meetings as part of our trade missions,” said Miller, “or to trade show types of things.”

Miller gives credit, also, to The Brewers Association in America for supporting export development.  Paul Grossman agrees and shares some statistics.

“According to the Brewers Association (BA)—the not-for-profit trade group representing small and independent craft brewer, craft beer export volume increased by 16.3% in 2015, and now totals 446,151 barrels worth $116 million,” said Grossman.

“Growth was seen in all major markets, most notably in Western Europe which saw a 33.4% increase. Ireland, the Netherlands, Thailand and Taiwan were the fastest growing markets in 2015.

Canada was again the leading international market for American craft beer, accounting for 51% of exports. Meanwhile, Sweden, Ireland and the United Kingdom each took a market share of approximately 10%. The top five was rounded out by Australia, which accounted for 4% of exports.”

“Small and independent craft brewers are putting American beer on the global map,” said Bob Pease, president and CEO, Brewers Association. “There’s a growing thirst from beer lovers in countries around the world for bold, innovative products from American craft brewers.”

There are now approximately 80 small and independent brewers exporting their beers from the U.S., by BA estimates.

Currently, Hardywood Park is the only Virginia craft brewery participating in the VALET Program. However, VEDP International Trade is working with several other Virginia craft breweries in the areas of identifying best international markets, making introductions to international customers.  VEDP International Trade is also working with wine and spirits producers to assist them to enter global markets.

Hardywood Park Craft Brewery is just beginning to “tip its toe in the water” when it comes to exports, insists Miller.

“We’re just trying to see if there is any interest in our beers overseas, whether that is our flagship brands or reserve brands or barrel brands,” he said. “We’re indifferent. We’ll try to figure out if we can supply it and whether it is a good enough market to consider going in to.”

And this just in: On May 19, the Australian International Beer Awards (AIBA) named Hardywood Park Craft Brewery’s Raspberry Stout as a Gold Medal winner and the Major Trophy recipient in the Specialty Beer category, out of more than 300 entries, more entries than any other category. Hardywood also scored a Bronze in the Wood-Aged category for their Ruse.

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