Paul is a fluent speaker who was in full command of his brief. While some of the audience may have had reservations about the move, you can’t say Hydes haven’t thought it through carefully.
The real driver for the move is the ending of their InBev brewing contracts, which makes the current brewery, with its heavy overheads, uneconomic. In the short term at least, cask Boddingtons will be allowed to die, although he suggested InBev may look to revive it in the future.
5,000 barrels a year is a realistic assessment of the volume of their own beers Hydes are currently putting through their pubs. Original Bitter makes up over two-thirds of this. With more intensive use there will, however, be the opportunity to increase production well above that level.
They are going to concentrate entirely on cask beers - their smooth beers will be discontinued and third party alternatives brought in. They will also cease brewing Harp Irish Lager which even now is a strong seller in many of their pubs, and buy in a new portfolio of lager brands. They will continue to brew Owd Oak, 1863, Original Bitter, Manchester’s Finest and a range of seasonal beers.
They are also considering introducing a separate range of beers under a different branding.
As an all-cask brewery, obviously they will stand or fall on the quality of their cask offering, giving a strong incentive to get it right, but on the other hand it could be argued it involves putting all their eggs in one basket.
They plan to buy their new site outright rather than leasing it, which is a sign of commitment to the future.
While they have abandoned direct selling to free trade accounts, they are still looking at doing wholesale business with companies like Wetherspoons and Punch.
He pointed out that Robinson's new brewhouse has a brew length of 90 barrels, as opposed to 360 in the old one, so represents a similar although less obvious reduction in capacity.
Given the business situation they found themselves in, doing nothing and staying with the old brewery wasn’t really a viable option, so it is good that they have decided to stick with brewing rather than simply selling up. Only time will tell whether or not it proves to be a sound move.
Is there a campaign to save harp lager?. It is only 1.60 in my Dads club. The Carling is 1.80 They can't get rid of Harp?
ReplyDeleteDo you know what other InBev beers they brewed? I think keg Trophy and keg Flowers Original and Best Bitter, but were there any others?
ReplyDeleteSorry Tom, no idea. Asking him what keg beers they had brewed was not at the forefront of people's minds ;-)
ReplyDelete@Cookie - maybe you need to revive your blog to campaign to save cheap lout. It's 4.3% too, so has a bit more kick than your standard Carling or Fosters.
The brewery looks to be in a mess physically, preumably as they have known for some time that they were leaving. Word on the street is that they are allowing it to fall into disrepair as a way to get round any problems with its listed status.
ReplyDeleteI'm not sure they brew Flowers-that was Badger last time I checked.
Flowers is brewed at Brains in Cardiff.
ReplyDeleteNothing about Hydes that wasn't already in public domain there.
Still doesn't answer how the hell their pubs are only going through 5000 barrels a year. As others have pointed out that comes out at 5 firkins a pub a week on average. If Original is 2/3 of total then that leaves less than 2 firkins a week between the other 3 & seasonals.
Pubs like The Friendship that stock the full range have to be going through at least 10 firkins a week.
Harp? Trophy? I didn't think these existed in this day and age. Any more 1970s throwbacks out there? Watneys Starlight anyone? (Please God, no)
ReplyDelete"Still doesn't answer how the hell their pubs are only going through 5000 barrels a year."
ReplyDeleteIt does seem a bit surprising, particularly as they own a fair number of large, busy pubs.
However, if you assume that:
(a) 2 million bulk barrels of cask beer are produced in the UK annually
(b) there are 55,000 pubs, and
(c) 50% of the total of pubs sell cask beer,
the average cask beer sales per pub works out at about the same, i.e. 1.4 barrels per week.
@Anon - Harp is still the regular lager in Hydes pubs. If you never go in keg-only pubs and working men's clubs you'll probably never realise many of these "zombie brands" are still going.
Looking into the background behind this decision, I came across this interesting article about how the Queens Brewery was expanded back in 2002.
ReplyDeleteWhen Paul Jefferies joined Hydes, the Manchester Brewer, three years ago as Production and Distribution Director, he looked to well-known process automation and control specialist, ABM Limited for help. As part of Hydes' management team, Paul developed a new manufacturing and distribution strategy to expand the capacity of Hydes' Moss Lane brewery from 20,000 barrels per year to its current 60,000. This capacity expansion was needed to cater for planned growth in Hydes' free trade and wholesale business. The question was how to do this?
As, Paul Jefferies pointed out: "We knew what we wanted to achieve; to more than double capacity at our cramped site where Hydes have brewed beer since 1899. At the same time we wanted to safeguard our reputation for brewing high quality ales and beers in the traditional way."
Source: http://www.abm.ltd.uk/article.php?from=2&id=28
This planned growth presumably never came about. Why else would Hydes have ended up brewing Harp Lager and In-Bev keg brands? You say that the company have thought through this move very carefully. It's a shame they didn't follow the same process 10 years ago!
"This planned growth presumably never came about."
ReplyDeleteNo, the plan was to get into contract brewing in a big way, especially cask Boddingtons. Hydes never hugely expanded their own tied estate. The marketing of cask Boddingtons was however out of their hands, and it basically died on its feet. There were also some initial quality problems with it.
Hydes had brewed Harp lager under licence for their own pubs for many years before the brewery expansion.
From what I gather the contract with AB InBev was to brew x thousand barrels a year, regardless of brand. Obviously the plan was that cask Boddies would be a growth brand but instead it died on its arse. Thus they had to fill the gap with other beers - I understand this included Mackeson (another blast from the past for you there) and I wonder if it included Gold Label?
ReplyDeleteIt might have have been interesting to ask Paul Jefferies whether totally selling up had been on the table in Hydes' business review, although he would probably have fobbed off the question.
ReplyDeleteThey certainly have a number of busy, well-sited pubs that would be attractive to potential buyers.
You could say that the latest move is turning them into a pub company with an attached in-house micro-brewery.
Brewers who stand back ,shut down pubs to cash in on property and land sales ,just to pretend
ReplyDeleteeverything is rosy.How long before they run out
of pubs to destroy,how long before Government
controlled Banks pull the rug on financing
dead venues.Why wont the Politicians,Brewers and
Trade Associations,,,just be honest,,just face the truth,,just point the finger,,Why ? the
demise of the pub trade.
Of course some will speak of busy pubs in leafy suburbs,others will boast how well THEIR tavern is doing,how insular,how inward looking,
how naive, what pathos,me, mine and my own
self and no one else.....Pitifull
Hanky Park