Thursday, 30 April 2020

Corona effect

A month ago, although it seems far longer, I wrote: “I have had some thoughts on how the coronavirus crisis is likely to affect the pub and brewing industries, but I really don’t feel it appropriate to comment on this until there is at least some sign of light at the end of the tunnel.” However, now that there is at least talk of a progressive unwinding of the lockdown, I thought I would return to the subject. What follows is really just a series of speculative bullet points rather than fully-developed arguments.

  • Obviously, with pubs having been closed for what looks like at least three months, it is likely to do significant damage to the pub trade, and indeed the wider tourism and hospitality industry. However, it remains to be seen to what extent people are going to flock back. As Tandleman has said, some will be back in the pubs like a rat up a drainpipe, while others will be much more cautious. Ironically, in view of the previous trend, wet-led pubs may recover more quickly than food-oriented ones. There may also be a problem with pubs initially having to operate under various restrictions such as limiting capacity.

  • Some existing pubs probably won’t reopen, while many projected openings of new bars that are in the pipeline will be abandoned.

  • It will encourage the long-term shift from on- to off-trade drinking. However, I suspect it won’t give a huge boost to mail-order beer because of the increased cost aspect. Some specialist off-licences that decided to close for the duration, even though not legally compelled to, may have cause to regret that choice. Customers will remember who did stay open.

  • It is also likely to precipitate the long-heralded shakeout of the microbrewery sector, where many have been saying for some time that there is considerable oversupply. However, perhaps perversely, it may be the “hobby brewers”, who can shut down and reopen with little financial pain, who ride it out, while those a little bit bigger who relied on brewing to make a living may call it a day.

  • Some substantial breweries that depend mostly on on-trade sales may not survive. All breweries apart from the very smallest will realise that there is a benefit to offering bottled and canned beer as another string to their bow, although achieving distribution is always going to be crucial.

  • It will enforce a substantial financial retrenchment upon CAMRA, which is heavily dependent (some might say too dependent) on income from beer festivals. Given that they involve a lot of people crammed together in a small space, festivals may be one of the last things to return to full health.

  • It will accelerate the decline of High Streets, which have been pretty much dead during the lockdown. Even before, they were increasingly becoming social spaces as opposed to just retail spaces.

  • In contrast, it will strengthen the role of physical supermarkets as essential suppliers, especially given that there have often been long waits for home delivery slots.

  • It will accelerate the move from cash to card payments, which I wrote about here.

  • It will punish independent retailers in areas such as clothing, furniture and electrical goods at the expense of major supermarkets and homeware stores that were able to stay open selling a range of products.
But a lot will depend on how willing people are to resume their previous habits as opposed to exercising greatly increased caution for an extended period of time. And that, at present, we just do not know. However, while they were criticised for it at the time, some encouragement can be taken from people’s willingness to visit beauty spots and seaside resorts on some of the fine days we have had during the lockdown. Pubgoers, after all, have never been known for being amongst the most fastidious sections of society.

I’ll also add the point I made on Tandleman’s blog, that it's easy to say that pubs don't really matter in the overall scheme of things, but they are only a subset of the wider tourism and hospitality industry, which is the third biggest sector of the economy. Until that can be restored to something approaching normality, we're still going to be in the economic doldrums. And it can't really function without what could be broadly described as “eat-in catering”.

31 comments:

  1. straight up its not sitting there drinking that will be the problem, it will be going to get a refill and going to the wc)

    ReplyDelete
  2. Look on the bright side. Change is an opportunity. Your CAMRAs could campaign to maintain the status quo as they appear to be doing or they could see the opportunity for a big reset. Lot's of pub company pubs going bust are lots of freeholds for independent investors as the pub companies struggle to replace the mugs that signed with them and decide to sell the real estate.

    ReplyDelete
    Replies
    1. Although in general we've tended to see that a pubco pub going bust rarely turns into a goldmine for anyone else. The pubco model has only come off the rails because the overall market has plummeted. More likely to be an opportunity for flat conversion specialists.

      Delete
    2. It's that fear that keeps you maintaining an unsatisfactory present. Chuck it all up in the air. See where it lands. Don't fear the future.

      Delete
    3. The last time CAMRA supported an industry reset it ended up with the Beer Orders and that went well, didn't it? That said, it makes no difference what they campaign for now as the industry collectively takes no notice of them unless prizes are being handed out for best beer or pub.

      Delete
  3. Boozy Procrastinator30 April 2020 at 16:55

    During this lock down I have made one card payment in person and that was actually on the last day of the pubs because the bar man requested it. In all my shopping excursions (food only) they've taken cash.

    On thing about breweries, which I posted on a TAND blog a few weeks ago. Yeast will be the governing thing about opening breweries. Though I would hope all those old breweries that have their own yeast strains have been able to find a way to keep it viable, even if it means brewing and wasting small scale beer to maintain a fresh yeast that can be up-scaled as and when it necessary. Supply and demand for the dried stuff will be interesting too.

    Then again this could all be one misguided black pilling and by December we'll all be carrying on as normal regardless.

    ReplyDelete
    Replies
    1. Yeast can be freeze dried and preserved for years. Many of the newer breweries use dried off the shelf strains designed for different beer styles. Not a problem.

      Delete
    2. It seems a little rude to me to insist on paying in cash when signs ask "Please pay by card if possible." I did pay for some takeaway fish & chips with cash because their card machine was on the blink, and also put a pound coin into a self-service till to buy a loaf of bread, but that's about it. Can't wait to get back in a Sam Smith's pub, though.

      Delete
    3. Get the Monzo app on your phone. Bang a ton onto it when the card arrives. Don't need cash no more, small transactions remain off your main personal current account. Tap for everything.

      Delete
    4. Boozy Procrastinator1 May 2020 at 13:24

      What can I say Mudge, I'm a rude person who doesn't take his card or his phone out with him in this day and age.

      If they are going to offer the choice then they will have my preferred method, if they aren't then, as in normal times, they don't get my business.

      You should see their faces when I ask if I can pay in claps.

      Delete
    5. Those who know me will be aware that I'm actually a very unstroppy person in real life but somewhat make up for it on the Internet :-)

      Delete
    6. You are what they call a "keyboard warrior", 'Mudge :-) :-) :-)

      Delete
  4. There is the National Yeast Collection which runs a Yeast Bank in Norwich. If brewers haven't been storing yeast samples there then they only have themselves to blame.

    However, I do feel that there will be a shakeout in he micro sector. In recent years I have kept reading about brewers offering or being asked for major discounts but cutting off the cashflow for three or four months means that only the best-capitalised are likely to emerge on he other side. It might sound harsh, but a bit of trimming of the brewery sector could be beneficial in the longer term.

    ReplyDelete
    Replies
    1. I've spoken to a couple of established micro brewery owners recently and they're weathering the storm but delighted at the prospect of some of the disrupting brewers going under - those that sell well below the 'going rate' and whose beers are often substandard. There's more than a few of them.

      Delete
    2. Boozy Procrastinator1 May 2020 at 13:21

      Yes, I've used packet yeast in my brewery but we moved on to slurry (from various family breweries) in recent years as it is far cheaper.

      I've also not had access to freeze drying equipment since my industrial chemistry days.

      But I agree with the general jist, if you aren't prepared for the worst then you may as well set in for the failure.

      And some of the discounts asked for (and sometimes granted) are quite ridiculous, it always appears to be a short term gain.

      Delete
  5. Your bullet list is good. Particularly the bit about shake outs. I'll be writing on that soon. As for Cookie's clichés, I avoid them like the plague (fitting).

    ReplyDelete
  6. And I too doubt if viable yeast is an issue.

    ReplyDelete
  7. Do pubs, bars, restaurants and any other business that has been forced by the government to close still have to pay business rates?

    ReplyDelete
  8. Professor Pie-Tin4 May 2020 at 03:25

    August 10th.
    It's official.
    The day when pubs can re-open in Ireland provided there is no second spike.
    You'd think it would be good news to know this date but sod that.
    Another three months ?
    THREE FUCKING MONTHS !!!
    Time to get creative.My favourite microbrewery is doing three pint growlers.Trouble is it's 15kms away and we're under a heavily-policed 2km travel limit with usually at least two check points between us. There's no way I could justify a growler as essential travel even though it is.
    Micky Two Gulps has come up with a cunning wheeze.When he's not downing pints in two gulps he's a bit of a wide boy used care salesman.
    His regular drinking buddy is a local solicitor who has given him a headed notepaper letter describing him as an officer of the court engaged in official business.
    Anytime he gets stopped he shows this to some fat gormless cop maintaining a safe social distance whilst straining a Hi-Viz jacket to bursting point and he gets waved on his way.
    We plan a trip to the brewery tomorrow after the Bank Holiday.
    I'm pretty certain it will work as the Garda here are legendary for their stupidity and laziness.
    Micky Two Gulps once asked a local one if he could find a way to get his son into the force as he was "too thick to get a job anywhere else."
    The obliging officer said he'd see what he could do.
    But still.
    Three sodding months.
    I could cry.
    I mean I love the missus and all that but this means it could be nearly five months without a break from her.
    I'm only human after all.








    ReplyDelete
    Replies
    1. Surely the 2km limit will be relaxed before pubs open, maybe when non-food shops are allowed to open.

      Delete
  9. Professor Pie-Tin4 May 2020 at 11:53

    From tomorrow it's 5kms so those growlers are still out of range.
    June 8th it gets extended to 20kms.
    Can't wait that long.
    Needs must.
    My hunch is Blighty will be following a similar road map.

    ReplyDelete
    Replies
    1. We haven't had the same specific restriction on travel, though. Indeed, there has been a very noticeable increase in road traffic over the six weeks of the lockdown.

      Delete
    2. Professor Pie-Tin4 May 2020 at 14:56

      Oh, didn't realise that.
      Anyway my cunning plan has had to be put on hold - the brewery has announced on its Facebook page it has run out of growlers !
      Fortunately another delivery of Tricky Cider from Somerset is due by Wednesday and the canned Beamish with a widget is really quite passable in an emergency.

      Delete
    3. Where do live Peter? (Rhetoric question)
      Around here the fall in traffic has been very noticeable though it is slowly creeping back up.
      During the first couple of weeks of the lock-down I was actually enjoying driving again for the first time in years. I was able to make the 12 mile journey to my office in Offerton in well under half an hour whereas I would normally have to allow the best part of an hour

      Delete
    4. You know exactly where I live. The traffic is still well below "normal", but I'd say there's a lot more than there was in the first couple of weeks.

      An office? I thought you were long since retired.

      Delete
    5. I volunteer for a charity whose office is in Offerton. Though we have closed it for the duration I have to look in occasionally to ensure that it is secure.

      Delete
    6. Professor Pie-Tin4 May 2020 at 20:19

      Peter ?
      The spell is broken.
      You'll always be known as Mudgie to me.

      Delete
    7. Sorry it's not Archie or Wilf ;-)

      I have hinted at it before - and on a few other more recent occasions.

      Delete
    8. Sorry for blowing your cover 'Mudge. We will arrange an exchange to get you out

      Delete
  10. When all this started I could have a coffee outside with almost no traffic noise from the main road. Today, as I write, it's constant.

    ReplyDelete

Comments, especially on older posts, may require prior approval by the blog owner. See here for details of my comment policy.

Please register an account to comment. To combat persistent trolling, unregistered comments are liable to be deleted unless I recognise the author. If you intend to make more than the occasional comment using an unregistered ID, you will need to tell me something about yourself.