Mic Heynekamp has seen all sides of the brewing puzzle both in New Zealand and the United States so he’s well-qualified to cut through any doom-and-gloom views that suggest our beer market is saturated and ready to implode.
Heynekamp and wife Molley own the fast-growing Eddyline brewery in Nelson – it’s the seventh brewery they’ve owned dating back to 1999 in New Mexico – so they know a thing or two about making (and selling) beer.
After four years with Eddyline as a brew-pub and pizzeria in the Nelson suburb of Richmond, Eddyline last year became a production brewery, launching a range of beers in six-packs that are widely available in the top of the South Island and should start making their way to the North Island soon.
We’ve all heard about the difficulty of getting shelf space in supermarkets and pondered questions over how long the industry can keep growing. Given how much he’s seen in 20 years of beer, Heynekamp isn’t deterred by the naysayers.
“Where it’s getting crowded is in terms of doing the same style over and over – what I mean by that is selling beer as single product at the exact same price as everyone else with the same flavours. I think that market is saturated: buying a $9.99 440ml can? You can only do that so many times on a budget.
“We found same thing in States – everyone was doing the same thing. They were all using the San Diego yeast or the West Coast ale yeast, making something with 80 to 100 IBU where you could have one or two of them but after that it’s just too much.”
Apart from finding his customers wanted more balanced, sessionable beers instead of big hop bombs, Heynekamp also knew they wanted value.
“At that time in the US, 440ml or 16 oz cans were only sold as four-packs. Nobody was doing six-packs of 16 oz cans so we started doing that and they sold.
“Stores told us they wouldn’t sell and some even broke them back into four-packs but now the most common buying format is the six-pack of 440ml cans and we were at the start of that.”
Heynekamp is taking the same disruptive value-approach to the New Zealand market.
“We’ve looked at all the costings and we’re saying these beers shouldn’t be $9.99 on the shelf. If you’re brewing it yourself there’s enough margin to bring some value back into the market.”
Eddyline are selling six-packs of their 6 per cent Crank Yanker IPA for $30-$32 and their 5.1 per cent Trail Carver APA is retailing for around $28 for a 440 six-pack – or less than $5 a can.
It took a while to convince stores that people would pay that price for beer – and to an extent reflects the experience of Liberty Brewing when they moved Knife Party and Yakima Monster to 330ml six-packs – but the fact is our beer market seems to have a matured to a point where punters can understand the great value on offer rather than baulking at the price.
“We experienced the same thing as we had in the States with stores saying: ‘a six-pack of 440s? no-one’s going to pay $30 for that!’.
But the evidence in the top of the South Island is to the contrary.
“Once we got over hurdle of convincing them to give us a go – then boom! They’re selling really well … some stores have told us we’re right being Garage Project in sales.”
Heynekamp says turning the production brewery into a success – he already has expansion plans – is due to the brand recognition Eddyline built up as a brew-pub destination.
“You get all these breweries trying to start up and they’re saying the market is saturated. The reason we can make it work is that when we came to New Zealand we didn’t do a production brewery, we did a wood-fired pizzeria with a brewery on premise.
“That’s how we started in the States. It allows you adapt to what your customers are telling you – you get a lot of a feedback which helps you make the beers better but we also get a lot of people through Nelson from all parts of the country and that helped build brand awareness way before we ever thought of going back into the production brewery mode. There’s enough people who’ve seen it, tasted it and liked it.
“Our Facebook and Instagram are very limited, because we’re too busy – but at the end of day it’s the liquid in can that has to sell itself. You can hype it up all you want but it has to sell itself.”
The Heynekamps had proved the benefit of the slower, more patient approach in the US. They spent their first beer decade in New Mexico before moving to Buena Vista, Colorado. When they moved to Colorado, the state was home to a few dozen breweries – in the next 10 years that swelled to 200.
The first two years were difficult, with the heavily-financed brewery on the verge of going under before exceptional growth meant they needed to open a second brewery in 2011.
Around the same time the Heynekamps came to Nelson for Marchfest and fell in love with the country – and the way of life here.
“We realised that while New Zealand is a beautiful and amazing country, we were drawn to the people and the laidback way of life.”
And that laidback way of life applied to doing to business. Some Kiwis might protest at the concept of New Zealand being an easy place to get things done but according to Heynekamp we’re a long way behind the US when it comes to “the regulation and red tape nonsense that US was drowning in”.
“We saw so much potential to do what we’d been doing in the States – it seemed easier to accomplish what you want to get accomplished here. But we also wanted to live in beautiful part of the world, where the trend was on the up compared to the US where it was in decline. We decided it was a place we wanted to raise our kids here; they were 4, 6, and 8 back then.”
Even now, nearly a decade on, Heynekamp maintains New Zealand is still the better place to do business than in the US. “New Zealand today is equal to around 2006 to 2008 in the States.”
While the family moved to New Zealand and started Eddyline here in 2014, they continued running Eddyline in Colorado.
Even though they went back to Colorado every six months “there was always a nagging in the back of your mind of ‘what’s happening over there?’.”
And after living in New Zealand for 48 months, the Heynekamps were eligible to be taxed on overseas income, which was when they decided to sell the US operation.
“We thought `OK, we need to free ourselves of the US, we love NZ, we’re staying here forever’.”
The Heynekamps sold the brewery to long-time employees and friends Brian England and Melissa McFee in 2018.
The curious thing about the existence of two Eddylines – apart from almost identical branding – is the fact there are two of many of the beers – a US version and a Kiwi version.
It’s not surprising given Heynekamp’s connection to the two breweries but there was also a natural evolution, illustrated by the changes to Crank Yanker.
“Crank Yanker was my original recipe but when I started brewing it in New Zealand there were differences in water, different malts, and different customer preferences … so we did modify it. We always imported our own hops and were bringing in El Dorado well before anyone else – so the two beers started the same but evolved into different recipes. The Nelson one is bit maltier and has less hop bitterness.”
While ties are now cut with the original Eddyline, there’s still a long-term relationship between friends and an agreement that the two breweries will “co-exist” – working together where it suits but evolving into separate entities who will not infringe on each other’s backyards.
The Heynekamps are now in the process of selling the Eddyline-branded pizzeria in Richmond to fully concentrate on the production brewery, but again want to have an ongoing relationship with the new owners to ensure Eddyline beers continue to pour there.
The new brewery is located next to the famed Pic’s peanut butter factory and in many ways it was the site itself that pushed Heynekamp back down the production route.
“I saw for the ‘for lease’ sign and told Molley we had to take a look. The geometry of that building is so similar to what we built in Colorado … We had ummed and aahed about a production brewery but when I walked in there I could see immediately where the brewhouse would go and thought ‘let’s do this, it’s too easy’.
The virtue of starting a brewery for the seventh time is that Heynekamp instantly knows where to find efficiencies – and this time he and Molley are doing it debt-free thanks to the sale of the American operation.
“This has been a lot of fun. In Colorado we expanded fast by taking on finance – we had a heavy debt load and we struggled to break even for a while. We nearly lost it all in the first two years but we kept hiring sales people and then it exploded on us and got profitable.
“We’ve not taken on any debt this time, so we don’t have the same pressure. We can grow as fast or slow as we want. But we also want to do the right thing.”
That includes a big investment in an Alfa Laval centrifuge to minimize waste and increase efficiency.
“We had the same centrifuge in Colorado – I’d always wanted to use it on the hot side as well as the cold side. After the whirlpool we’re always left with 150 litres of sludgy hop mass that you can’t do anything with – so I thought if we could just run this through the centrifuge, I’m sure there’s a ton of flavour …let’s just give it a go. We had to make sure the centrifuge was rated temperature-wise, which it is, and sure enough, success, it worked. That means we can start increasing efficiency.”
So instead of four brews to fill a 4000-litre fermenter they’re doing it with three brews. But another big part of the centrifuge is to reduce the waste. “All that sludge is not going down the drain so I feel better about what I do. We’re also looking to convert the entire operation to solar energy.
So, seventh time around – what’s it like?
“This one is a lot more fun and lot more rewarding … we’re not chasing the dollar but chasing passion.”