Tallinn Calling

This issue we’re in Estonia, to find out why this tiny former-Soviet country on the Baltic coast is producing some of the world’s most exciting and groundbreaking new beers


On paper, Estonia doesn’t seem the most likely hotbed for innovative craft brewing and, prior to around 2012/13, domestic macrobrewers’ mediocre lagers enjoyed total domination. Today though, a handful of pioneering brewers have not only kickstarted a fertile domestic scene, but also put Estonia on the global craft map with their distinctive, diverse and consistently excellent brews.

While Estonia is a very old country, with a distinct identity dating back thousands of years, it has an equally long and storied history of invasion and occupation. Indeed, it was part of the former Soviet Union from the end of the Second World War until 1991, lending the country a curious blend of traditional Baltic/Scandinavian style and Russian brutalist architecture.

The capital, Tallinn, is on the country’s north coast, a short hop from Finland. The Estonian language shares common roots and some vocabulary with Finnish, yet is different enough that they’re far from interchangeable. This means most of Estonia’s 1.2 million inhabitants speak at least two languages and, while fiercely proud of their country, have a refreshingly international outlook.

In 2012, the range of Estonian beers available domestically stood at around 50, with only a dozen or so new products added each year. Most these came from the dominant macrobrewers Saku and Tartu, some from Haljala and only a couple from Karksi (though suspicion was rife that even these were, in fact, brewed in Tartu).

Gambrinus in Tartu is one of Estonia’s first beer-dedicated bottleshops, opened in June 2012 by the noted beer blogger Karmo Tüür. “During opening we didn’t yet have our own craft,” recalls Karmo. “Our stock started off with BrewDog and a few Belgians beers. There were only two importers of premium beer in Estonia at the time.”

Karmo remembers that on the opening day, it had about 60 brands on its shelves; a number that, at the time, seemed like a treasure trove. “Estonian customers came in and asked ‘are there really so many craft beers out there?’ There were only a few Estonians who were familiar with the craft beer world at that time of course.”

Silver Solnask of Kalamaja Pruulikoda, a prominent nomad brewer from Tallinn, began brewing out of frustration at the lack of quality beers available in the country’s many excellent restaurants. “We started making beer in the autumn of 2013, but it was more for our own use,” he says. “Imported beer was already available in 2013, but it was still mostly mainstream. Business owners didn’t want to bring in craft beer, because they were not sure if there would be a market for it here.”

What a difference, then, just a few short years later; in 2015 alone, at least 400 different products were added to this list. These didn’t come from the Saku-Tartu-Haljala cabal, but from a seemingly spontaneous explosion of ambitious and prolific new breweries, including Õllenaut, Põhjala, Sori and Pühaste.

Karmo says: “The work the small breweries and shops have done by talking, explaining and running tastings was a truly great collective effort, and it worked.”

Today in Gambrinus, there are roughly 350 different beers for sale at a time. “We physically can’t fit any more,” continues Karmo. “Our top sellers are the Estonian beers, new foreign brands and anything with the ‘wow’ factor. When a newcomer arrives, at the beginning a few crates of it go fairly quickly. After that it only continues to sell if the beer is truly a good one.”

But why Estonia and why now? Enn Parel, one of the owners of Põhjala brewery puts it down to simple demand; once Estonian consumers – who generally seem to enjoy high quality food and drink in any case – were exposed to flavoursome craft beers, they suddenly realised what they’d been missing.

“Once you are familiar with craft beer, there is no turning back,” he says. “Even large breweries have started to think about how to produce something different.” Two significant changes in the law offer another possible explanation for the sudden rise of craft. First, excise duty was halved for manufacturers whose annual production does not exceed 300,000 litres, in a very similar arrangement to the UK. Second, brewers producing less than 40,000 litres annually were exempted from the prohibitively expensive requirement to have a certified testing laboratory.

Once you are familiar with craft beer, there is no turning back

When you’re wandering around Tallinn’s great beer bars or chatting to well-informed local drinkers at the Tallinn Craft Beer Weekend, it’s easy to be fooled into thinking this is a mature, well-established market. Yet in reality we’re just at the start of Estonia’s craft beer story, and where it goes from here remains to be seen.

“We have seen a lot of newcomers in a short period of time, but our joint contribution to Estonia’s beer production and consumption in 2015 was still less than 1%,” continues Põhjala’s Enn. “It’s estimated that Estonian microbreweries produced a total of one million litres of beer.

However, average yearly consumption in Estonia is 140 million litres. Small breweries do get quite a lot of media attention, but it is not proportional to their actual market share.”

“Currently, everything being produced in Estonia’s microbreweries is getting sold,” adds Karmo Rudder. “There are already nearly 30 breweries on the market, and at the moment the main problem they face is producing enough to meet demand. So it still looks like a good investment for anyone considering setting up.

“Also, in the geographical sense, there are a lot of uncovered areas. There is always the possibility of marketing to local communities, if the nationwide market ever becomes over-saturated. As far as the world at large is concerned, the beer revolution takes place regionally, not everywhere at once: in the United States is has already ended, with small producers having found their place.

In Scotland it is still ongoing. In Russia, the first nervous steps have been made in St. Petersburg, though the revolution has not yet reached Moscow.”

In many European countries, craft beers make up about 5-6% of the market, rising to around 20% in some US states. The prevailing feeling in Estonia is that there’s nothing stopping craft from reaching this level within a few years.

“I think the ‘revolution’ will bring the number of small producers up to 50 and then their numbers will slowly start to decrease, until about 20 remain,” predicts Sven Ivanov from Moe brewery.

“The strongest will survive. Given the pace at which the state is increasing excise duty on spirits, it is likely that beer will become more popular.”

Consumer awareness and consumer tastes have evolved tremendously in the past few years

Kalamaja mustlaspruul’s Silver Solnask agrees that, as Estonia’s domestic market becomes even more sophisticated, brewers will need to move with their customers’ evolving tastes, and predicts that those most able to do this will rise to the top.

“Consumer awareness and consumer tastes have evolved tremendously in the past few years,” he says. “At first the consumers were not very selective and drank more or less anything, as long as it was a craft beer. Now, people are more discerning and recognise good brands. The manufacturers have raised product awareness and educated the consumers, and we all organise a lot of tastings and other events. All the manufacturers get along well and feel that any event will benefit everyone, as a well-informed customer will have a greater appreciation for all craft beers.”

“Favourite tastes and brands have not yet become entrenched,” adds Solnask’s colleague and partner Tanel Tälli. “So many new products are constantly being added, that choosing a favourite is difficult.”

Most of the brewers agree that price remains a barrier in breaking through to an even more mainstream audience. Moe brewery has made a deliberate effort to bring craft quality at a more accessible price point, with its Muddis brand. The brewery’s Sven Ivanov says:

“It’s going to be hard to lower prices sustainably until production volume increases; we hope to be a pioneer in this field.” Enn Parel, agrees. “Too high a price will prevent the next explosion,” he says. “The real big bang will happen when, instead of being five times more expensive than the macro-brewed competition, the price of craft beer is no more than 2.5 times the price.

But we cannot lower prices while the production volume is so small and the cost of raw materials is so high. Well, I can’t imagine selling it at only twice the price of mainstream beer and still making a profit.”

However much potential there is to wrest market share from the big guys, particularly as economies of scale begin to kick in, Estonia’s population is still a relatively tiny 1.2 million, putting a natural ceiling on the size of the domestic market. That’s why many of the country’s more successful microbreweries have built export into their business from day one.

Põhjala’s Enn Parel says almost half of its beer is being exported and Sori had originally planned to export 100% of its output, while other small brands, such as Õllenaut and Lehe Pruulikoda, are also exploring the foreign markets.

Even the nomad brewers have thought about it. “Small Estonian manufacturers are thriving in foreign markets,” says Silver. “Because we all get on so well, a group of us – including the nomad brewers – get a shipment together and off we go, beyond the border.”

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