Breweries use AI and co-operation to overcome economic challenges

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Four men from Barossa Valley Brewing, Western Ridge, Rehn Bier and KI Brewery holding beers

In the face of economic adversity that has led many breweries into voluntary administration, four South Australian breweries are doubling down on cooperation and innovation. Barossa Valley Brewing, Western Ridge, Rehn Bier and KI Brewery, all renowned for their unique craft and commitment to quality, believe they have found a solution to some of these challenges.

It’s been a devastating time for the craft beer industry as evidenced by iconic brewers like Big Shed (SA), Hawkers (VIC), Wayward (NSW), Ballistic (QLD) and Running with Thieves (WA) all recently entering voluntary administration. They are not the only ones. A perfect storm of increasing costs, declining sales, rising interest rates and heightened overseas competition have forced many Independent craft breweries to either close, be forced into sale or need to restructure via voluntary administration.

David Henderson, Co-Founder of Western Ridge Brewery, is a brewer reversing the trend. Western Ridge saw problems coming early and after exploring their options decided to close their much-loved Barossa brewery in mid 2023. However, after discussions with other local brewers and AI start-up Deep Liquid, they pivoted with David taking over operations from his co-founders to execute a new plan. David says “Craft breweries flourished because we dared to do what multinationals couldn’t. Our instinct as independent brewers is to collaborate and build community. In today’s market, we need to harness this spirit to use technology to disrupt the scale advantage of multinationals.”

This innovative model will see the independent breweries work together to reduce costs through bulk ordering, shared warehousing, and delivery costs. They have also advertised for a sales manager to handle their diverse and award-winning portfolio of beers. This structure allows them to maintain their independence and continue serving the community while enjoying some of the benefits of scale that large multinational brewers enjoy.

The breweries will also have access to cutting-edge AI technology through Adelaide-based start-up Deep Liquid. With a review platform and an AI bar that can create personalized beverages on demand, Deep Liquid uses machine learning to help producers understand customer preferences, streamline production processes, and enhance customer satisfaction. Anton van den Hengel, Co-founder at Deep Liquid, says, “AI provides a direct line of communication between the brewer and the consumer on a level that has not been previously possible. The strategic use of AI allows for more sophisticated and detailed information and takes the guesswork out of the process.”

The dream of AI enhanced co-operation was the brain-child of Denham D’Silva who founded Barossa Valley Brewing in 2005 before Co-founding Deep Liquid in 2021 with some of Australia’s most well respected AI experts.

As the brewing community rallies together, for Local Beer Day, there has never been a more critical time to show support for these resilient establishments. South Australians are encouraged to engage with their favourite breweries, offering encouragement and celebrating the rich tapestry of local craft beer.

In an industry known for its camaraderie and community spirit, this united front signifies a beacon of hope for breweries facing economic challenges. By embracing AI and collective strength, these breweries are not only navigating the current storm but are charting a course towards a more sustainable and vibrant future.

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