Friday, 29 April 2016

Dog eat dog

For several years, many people have been pointing out that the ever-growing number of breweries in Britain seems to be on a collision course with the ever-diminishing number of pubs. If trends continued unabated, breweries would outnumber pubs by about 2035. At some point, surely the bubble has to burst.

So far, however, it hasn’t. But there appear to be a growing number of straws in the wind. I‘m hearing reports of brewers trying to undercut others with what appear to be suicidal discounts. Some are even apparently willing to sell “off-invoice” and thus incur no VAT or duty. It’s becoming increasingly clear that some are feeling the pressure.

Another factor is that not all brewers have the same expectation of their business. I was recently taken to task in the comments on another blog for referring to “hobby brewers”, but it’s an entirely legitimate term. Some microbrewers are retired and thus already have a source of income. Others have taken up brewing while continuing to do a “day job”, although they might hope to turn full-time eventually. And a few give the impression of doing it with daddy’s money.

This does not mean in any sense that they take their beer less seriously, and indeed in some cases it may give them the opportunity to brew more interesting beers with unusual and expensive ingredients. But it does mean that they’re not necessarily driven by the need to make a living out of their business, and at times can afford to undercut their competitors. This competition may be understandably galling for brewers who are looking to make a living out of it.

Eventually the bubble will burst, as there’s only so long anyone can put up with brewing being an unremunerative labour of love. The fallout may be messy, but at least it will give the serious brewers a better chance of long-term viability. And the objective of any brewer must be to get their beers into pubs and bars as a regular fixture, rather than depending on fickle trade from guest spots and beer festivals.

Likewise, buying lower-quality beer just because it’s cheap is not a good business strategy for pubs. Drinkers don’t want to be ripped off, but neither are they willing to sacrifice quality for price. People aren’t going to continue drinking indifferent beer solely because it’s cheap. Small-scale brewing will always be highly competitive, but there’s no reason why it can’t provide good brewers who also have a knack for business with a reasonable living.

Possibly, of course, this tendency is also a consequence of many independently-run pubs finding life a struggle and thus doing everything they can to reduce their costs.

13 comments:

  1. The weakness of the post is it's basis in hearsay and rumour. Names names.

    ReplyDelete
  2. I consider myself a hobby brewer as I have a normal full time job and run my brewery in the evenings and weekends. I don't discount or undercut any other brewers. Nothing gets out without the associated paperwork, etc. I did consider going full time but it would be financial suicide with the current state of the industry.

    I could name names of some breweries that are doing exactly as you've heard, unfortunately I can't afford lawyers to defend a libel case.

    ReplyDelete
  3. I've seen comments recently about this from Dave Bailey and Shane Swindells, although obviously I am not going to name any names, and people like James are in a far better position to know what's going on than I am.

    ReplyDelete
  4. It won't be a loss to lose many of the new microbrewers. Travelling up and down the country i try all sorts of new brews. I have to say that 50% of it is poor quality. There are now too many of them.

    ReplyDelete
    Replies
    1. Surely this is an argument for closing pubs? (if 50% of the beer they serve is poor)

      Delete
    2. You demonstrate your usual talent for twisting others' words there.

      But what he's talking about is beers from small, newly-established breweries. And I'd agree that at least 50% aren't much good.

      If you stick to beers from established breweries with good reputations, including many post-1975 startups like Butcombe, Black Sheep and Hawkshead, your experience will be far better.

      Delete
  5. "People aren’t going to continue drinking indifferent beer solely because it’s cheap" They don't often get the chance. The pub usually keeps it. I said this on Beers Manchester and it still holds "There is too much supply and not enough demand. Pubs have the upper hand where they are free to choose from whom they like. The cheap wholesale prices are there. They’d be poor businesses if they didn’t take full advantage of it.

    And you can’t really feel sorry for brewers. They know the score. It is dog eat dog out there.".

    ReplyDelete
  6. The point of more breweries/fewer pubs belies a further truth that brewery output is falling. A greater number of breweries are producing less beer not more. So the falling output would be in line with the falling number of pubs. More breweries is simply more fragmentation

    ReplyDelete
  7. There's been a seismic shift in beer drinking habits in the UK over the past 5 years, a huge latent demand for "more interesting" types of beer has been partly revealed and partly stimulated, and hundreds of brewers have spotted an opportunity to get in on the ground floor and build themselves a viable business.

    Obviously, not all of them will succeed, particularly as alcohol consumption as a whole appears to be permanently decreasing under constant pressure from publically funded health bodies. However many of them will, as long as they continue to invest and expand and don't naively build their business plans around the assumption that the currently vastly inflated prices for keg beer will continue.

    TBH, the same goes for pubs, as we although we are seeing a net loss as thousands of old, often badly run, pubs go out of business, this hides the fact that 14 new pubs are opening up every week, most of them aimed at this new demographic of "discerning" beer drinkers.

    ReplyDelete
    Replies
    1. Hmm, I must have missed that seismic shift. Of course things do change over time, but I really don't think the experience in the typical pub is hugely different compared with five years ago.

      There aren't 14 new pubs opening each week. Most of them are itsy-witsy little bars that are no more than a pinprick on Tim Martin's backside. Not pubs.

      Delete
    2. Yes, I think you must have

      Delete
  8. It's good to read a peice that does not see the rise in brewery numbers as a universally good thing. Too often the trade press and beer writers are uncritical of micro breweries and fail to recognise that a lot of them produce poor quality beer.

    This is a vast generalisation, but based on selling 4 different guest beers a week for 4 years:
    The mid sized, established, often family owned breweries are the best. They sit in a sweet spot between the big boys and the amatuers. They have experience coupled with freedom. Of course there are hundreds of exceptions - but for me it's not a bad rule of thumb when picking beers.

    ReplyDelete
  9. Agree with Kieran.

    I read London Drinker on the train home on Tuesday. Packed with articles boasting about London's wealth of breweries, most of whom I've never come across despite drinking in nearly a hundred different London GBG pubs the last year.

    The section of interest is the WhatPub update, detailing pubs starting or stopping offering cask beer. There's a lot more deletions than additions. And while you hear about the exciting new beer houses on the blogs (I went to one this week), the vast majority of new pubs are labelled "no cask beer" or have Doom Bar, London Pride, Adnams and Greene King as their beer range. Nothing wrong with those, but the new London brewers are conspicuous by their absence.

    ReplyDelete

Comments, especially on older posts, may be subject to prior approval. Bear with me – I may be in the pub.

Please be polite and remember to play the ball, not the man.

Any obvious trolling, offensive or blatantly off-topic comments will be deleted.

See this post for some thoughts on my approach to blog comments.