Skills, social change and sustainability drive innovation in the alcohol industry

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Local skills, social change and sustainability have been key drivers behind the New Zealand alcohol industry’s significant contribution to the local economy, according to a report by the New Zealand Institute of Economic Research ( NZIER).

Released today, the report says the sector contributes $1.92 billion to GDP, pays $1.819 billion in excise and GST taxes, spends $2.02 billion on local goods and services, and generates $2.09 billion in exports. This is against a backdrop where government statistics show alcohol consumption has fallen by around 25% since the 1970s and 80s, according to the NZ Alcohol Beverages Council (NZABC).

“The report shows that the 1,865 beer, wine and spirits companies employ around 10,200 people, from craft distilleries in rural areas, to specialist production in the regions, to corporate headquarters in city centres. In addition, another 20,900 people are employed indirectly by supply chain companies, from yeast producers and hop growers to packaging, logistics and shipping. As a supplier itself, the industry connects to the hospitality industry, which employs approximately 172,000 people in cafes, bars, restaurants, hotels and event businesses,” said Bridget MacDonald, Executive Director of NZABC.

“Working in a restaurant or picking grapes are often first jobs where young Kiwis develop skills that are transferable to other industries or where they discover their passion that leads to a lifelong career,” says Bridget.

The report also details how the industry and society have changed over the past two decades.

“Times are changing, people are drinking less and the industry is changing with the times. People are drinking less and becoming more moderate consumers. It’s more about socializing with family and friends over a meal and a drink – and if people choose not to drink, that’s okay too. We are seeing a shift towards more mindful drinking where consumers are sipping and enjoying higher quality beverages or choosing no or low alcohol options.

“There is also a clear shift, as in most Western countries around the world, towards supporting local producers. We value local talent and produce, which supports the growth of our wineries, distilleries and breweries,” says Bridget.

“This is an exciting time for our industry – we are diversifying our product lines in response to consumer demands and trends. Today’s challenges become tomorrow’s opportunities, driving innovation and investment in research and development across the industry – from developing unique hop varieties for beer, to from adopting indigenous ingredients for spirits to refining viticultural practices to create low-alcohol wines,” says Brigitte.

“The conscious consumer is not only looking for less carbohydrates, but also less carbon. The industry’s commitment to zero carbon and sustainability goals is driving innovation in all aspects of the business, from chains sustainable sourcing, recyclable packaging, refining manufacturing processes, zero waste initiatives, reusing by-products, reducing water and supporting local goods and services,” says Bridget.

“At the heart of it are the people – from those who grow grapes, grains and hops to our customers who enjoy a drink and good times with family and friends. The pandemic has been difficult for most businesses, including our industry. However, it is resilient and vibrant and will continue to play its part in making a positive contribution to New Zealand’s financial, environmental and social economies as we weather the uncertainty ahead,” said Bridget.

The figures for beer, wine and spirits in New Zealand

Economic

  • 10,210 employees and 20,913 indirect jobs
  • Contribution of $1.92 billion to GDP
  • $1.819 billion in taxes for the government (excise and GST)
  • $2.09 billion in exports
  • $2.02 billion spent on local goods and services.

Environment

  • 75% glass recovery rate thanks to the Glass Packing Forum Product Stewardship Scheme
  • Environmental commitments, for example the Climate Leaders Coalition and zero carbon initiatives
  • Supply chain sustainability goals, sustainable packaging, zero waste to landfill, land reclamation, water reduction, local sourcing, biosecurity, renewable electricity.

Social

  • 78% of New Zealanders say they are comfortable with alcohol on social occasions
  • 47% consumed low alcohol drinks in 2021 (+7% compared to 2020)
  • 82% drink at or below the weekly limit from the Department of Health’s “Low-Risk Drinking Advice”, and 92% have at least two alcohol-free days, as suggested
  • 84% of New Zealanders support education in schools
  • The industry pays an annual fee of about $11.5 million to the Health Promotion Agency to fund awareness campaigns
  • The industry supports a number of activities aimed at reducing alcohol-related harm, including supporting The Tomorrow Project to fund Smashed, a curriculum-linked theater education program run by Life Education Trust, Cheers NZ! (cheers.org.nz) and Alcohol&Me (alcoholandme.org.nz).

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