December the 1st, 2021 - The much loved Garden Brewery is ready to construct a brand new, larger facility and plan their expansion to the distant Asian market.
As Poslovni Dnevnik/Marija Crnjak writes, with an Advent programme they organised for the month of December, the Croatian craft brewery Garden Brewery is saying goodbye to the facility where they've brewed beer and hosted many events in the first five years of their business.
They're also building a new, significantly larger brewery in Zagreb's Zitnjak area, which will enable them to triple their production and become the largest craft brewery in the region and one of the leading ones in all of Europe, as well as strengthen their exports with the expansion to the Asian market.
The completion and relocation of their production facilities and the Zagreb Brewery to a brand new location is expected by the end of the first quarter of 2022, with installed capacities of 35,000 hectolitres and significantly increased capacity of the retail location.
Zagreb Brewery Director Tom O’Hara explained that with constant growth, the craft brewery has simply outgrown its current location. “In the last two years, our production team has done a really great job because we've had to exceed our capacities, but even that wasn't enough. This year, due to insufficient capacity, we had to give up work, missing out on an additional 30 percent of traffic. There were times when I had to tell the sales team not to actively sell anything. It was an unsustainable situation that needed to be addressed. We've considered several options for continuing to expand at our current location, but we've come to the conclusion that we need to start from scratch,'' explained O’Hara.
Although the continuation of monetary expansion and consequent inflationary pressures, along with the bursting of supply chains, marked the third quarter of this year, in 2021, Garden Brewery continued to record record growth in both revenue and operating profit.
The report for the first 9 months of 2021 states that The Garden Brewery Group, consisting of The Bird (brewery), Yellow Submarine (burgers) and Lula (festival business), generated total revenue of 89 million kuna (twice as much as in 2020) with an operating profit of 16.2 million kuna.
The growth of the craft beer segment stood at an impressive 51.24 percent, and thanks to the completion of the digitisation process, they had 27.8 million kuna in revenue from online sales. According to the Group's report, the aforementioned investment will enable a further step into foreign markets and the possibility of negotiating significantly larger contracts. Garden Brewery's expansion will be financed by a combination of their own funds and favourable credit indebtedness. They don't want to reveal the amount of the investment yet.
“We're building a facility that will, we hope, stand the test of time for the next ten years. We're also investing a lot in our production and sales space, primarily to create a craft brewery that will stand out as one of the best in Europe. Our sales space will provide a user experience that will be completely unique for this region and it will also be a great advertisement for Zagreb,'' O’Hara revealed.
In terms of size, Garden Brewery is still a mid-range craft brewery, but after expansion they want to be the largest craft brewery in the region of Southern, Central and Eastern Europe, and in the upper rank of craft breweries in Europe, where they have already established themselves as one of the important players in this blossoming business.
Capacity expansion also creates new opportunities for exports, and Garden Brewery currently exports to over 30 different markets. In Asia, they currently sell to China, Malaysia and the Emirates. The Croatian domestic market accounts for close to 30 percent of their revenue, which they plan to maintain next year, which means additional growth.
“Our strategy for Asia for next year is to grow these markets with the opening of additional ones such as Japan, Hong Kong, Taiwan, Vietnam, South Korea and India. Depending on the pandemic, we hope to move in that direction. Although these are remote markets and sometimes they present a logistical challenge for sales, we believe we've only scratched the surface of what we're capable of there,'' concluded O’Hara.
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