Tuesday, 30 March 2021

Death of the Premium Bottled Ale?

Westerham Brewery have recently announced that they are progressively switching all their packaged beer from bottles to cans. They say that “The future is bright, the future is refreshing beer in cans” and that “that the days of the ‘Premium Bottled Ale’ are dead.” However, from what I can see it appears very much alive and kicking, occupying a substantial section of the supermarket beer aisle and seeing a steady trickle of new product launches.

Their statement that the sector has been “de-premiumised” also misses the point about how it came about in the first place. In the 1980s, the vast majority of off-trade packaged beer was in cans, typically brands such as Stones, Tetley’s and Younger’s Tartan. Premium Bottled Ales were launched to distinguish the product from that category and gve drinkers something they would more readily associate with the beers they found in the pub. And, initially at least, it mostly encompassed what were considered “premium”, i.e., stronger beers such as Abbot Ale and Directors rather than ordinary bitters. There remains a strong overlap between the drinkers of premium bottled ales, and the drinkers of cask in the pub, and indeed the PBAs are often colloquially referred to as “real ales” even though the CAMRA purists would insist that they aren’t.

There is price pressure within the sector, as there is in every other competitive market, but that is nothing new. It is certainly true that brewers need to produce something that can be sold in a 4 for £6 offer, but quite a number of the smaller new-generation brewers are quite happy to sell what to my mind are very good beers through this channel. The same is true of Timothy Taylor’s with the bottled version of Landlord, the one widely-distributed cask ale that really can command a price premium. And the 7.3% McEwan’s Champion also happily exists there, so higher strength alone is no barrier.

They are, of course, correct to say that cans are more environmentally friendly, being lighter, more compact and more easily recyclable than bottles. They are also significantly cheaper. But there is a lingering belief that bottled beer is superior to that in cans, which goes back to days when cans were associated with Skol and Tartan, not to mention Long Life, “the beer specially brewed for the can”. Some of the more popular premium bottled ales such as Abbot Ale and Pedigree are also sold in cans, but they always come in four-packs and there really is no move to introduce individual cans into the sector (which also opens up the minefield of selling beers at price points that appeal to problem drinkers). I also haven’t noticed any increase in the shelf space given over to cans rather than bottles and, if anything, the growth area seems to be in multipack boxes of bottles along the lines of “Classic Golden Ales”.

On the other hand, over the past few years the switch in the craft sector from bottles to cans has been very marked, and cans now dominate the craft section of the beer aisle. Part of the motivation for this has to been to create a point of difference from the premium bottled ales. This was why, a few years back, many craft brewers switched from 500ml to 330ml bottles. Thornbridge were perhaps the most prominent to do this, but more recently their star seems very much to have faded. It often seems that the British craft beer movement seems to define itself by doing things differently from the established family brewers rather than the industry giants. And note that those 330ml craft cans in the photo are also in a 4 for £6 offer.

But, in switching from bottles to cans, Westerham are not just changing the method of packaging, they are changing how they want their beer to be perceived. And, if they define themselves as “craft”, there will be an expectation that they will in some way be modern and innovative. If they, or other brewers, are putting beers in traditional British styles into cans they may find few takers.

Another problem with cans is that they are opaque, so that if beers are “can-conditioned” it is impossible to determine when they have settled clear or to pour them so that none of the sediment goes into the glass, whereas that isn’t difficult with a bottle-conditioned beer. I know that “murky beer is good” has become a high-status opinion nowadays, but the vast majority of drinkers still want their beer to be clear, so that is an obvious limiting factor.

In fact, Westerham’s true motivation in going for cans is probably that they believe that, by shifting to a different market sector, they will be able to gain a higher margin. This is similar to brewers contemplating a shift from cask to craft keg, as I discussed recently in considering the threat of Covid to cask. However, the higher margins are only obtainable because the beers are in a more specialist and niche sector which, over time, is vulnerable to attack. I wonder how long it will be before we see the first single cans of “premium canned ale” appear, and drinkers might start to wonder whether it’s worth paying twice as much for something with a fancy graphic of a spaceman.

Sunday, 28 March 2021

Ihre Papiere, Bitter!

Over the past few days, there has been a lot of focus in the media on vaccine passports. These are not a single concept, and obviously if another country decides to require vaccine passports for any visiting tourists there’s not a lot we can do about it. However, last week, Boris Johnson stated that he would not be averse to the idea of pubs requiring them to gain entry.

Not surprisingly, this idea went down like a cup of cold sick with both licensees and pubgoers. I ran a poll on Twitter to gauge reaction, which was widely retweeted. This showed a strong majority against, but a disappointingly large minority who didn’t see a problem.

We have had vaccinations of various kinds in this country for over a century, but they have never been compulsory, and nor have we ever sought to restrict the freedoms of those who have not been vaccinated, so this would be completely unprecedented. Indeed, Johnson’s former ministerial colleague David Davis has suggested it might well be illegal, and would be likely to lead to court cases. On the face of it, he certainly seems to be correct, both in terms of medical discrimination and indirect discrimination against less vaccinated groups. It would probably need to be implemented either under the emergency Covid legislation or by an amendment of the Equality Act to create a specific exemption.

People would be up in arms if it was proposed that pubs should be able to refuse admission to those who could not prove they were HIV negative. Of course some smartarse will pipe up that the two are completely different, and indeed they are. But if you accept the concept of passports for Covid vaccinations, you have accepted the principle of discrimination on grounds of medical status, you are just arguing about where the line should be drawn.

There also seems to have been a considerable amount of moving the goalposts. Back last Autumn, vaccine supremo Kate Bingham stated that the objective would only be to vaccinate the over-60s and the clinically vulnerable, not the entire population. In January, newspapers were suggesting that 15 million jabs would do the trick, whereas we have already done twice that. As a general rule, vaccines don’t require anything like universal take-up to be effective across the whole population and achieve “herd immunity”. And the evidence so far is that under 10% of people are declining vaccination.

Creating such a vaccine passport would involve considerable practical difficulties. It would have to be made very difficult to forge. How would people who do not own smartphones be catered for? It seems that those without smartphones are increasingly being relegated to the status of second-class citizens in contemporary society. Some method would have to be found of registering people who have legitimate medical exemptions from vaccination.

Would it also have to apply to pub staff, or to people coming in to make deliveries or service equipment? How about the customer from the beer garden who just wants to come it to use the toilet? How would it apply to food courts in shopping centres and motorway service areas served by numerous outlets? A means would have to be found to incorporate tourists and other short-term visitors within the scheme. And there are plenty of people living in this country who for various reasons are off the radar of the NHS, and would be even more excluded from mainstream society.

The comparison has been made with track and trace, which pubs operated last summer, but in reality the two things are very different. Track and trace only applied to one person in each party, not everyone, and it was completed once people had entered pubs. There was no requirement to prove identity and, in reality, it was easy to spoof if you were so inclined. Participation was effectively voluntary.

Having to check every single customer’s details would place an onerous administrative burden on pubs. How would a small bar with one member of staff cope? And remember it wouldn’t just apply to pubs, but to restaurants, cafĂ©s, coffee shops and even takeaways with a few inside seats and tables. And should pubs really be expected to act as the government’s enforcement agents?

After the initial suggestion, the government have to some extent rowed back on the idea, saying it would be entirely voluntary and would only come into effect once all adults had been offered a vaccine. Wetherspoon’s and Shepherd Neame have, to their credit, rejected the idea. However, it would be conceivable that pubs would be offered the carrot of relaxed social distancing rules if they implemented it.

If it did end up being adopted by some pub operators, I suspect it would tend to be just the high-end gastropubs and a few up-their-own-arse craft bars. It’s very hard to see backstreet boozers in industrial towns wanting to take it up. And it could end up with the two-tier pub trade that might have come about if the proposal to exempt wet-only pubs from the smoking ban had come to reality, with some being pious, dull and joyless, and others lively, fun and rumbustious.

I suspect in reality this is something that won’t happen, as even if ministers wanted to press ahead with it, it would be derailed by the practical difficulties. And surely, assuming that the vaccines are effective, by the Autumn the number of Covid deaths and hospitalisations should in any case be minuscule and it would seem unnecessary and disproportionate.

But the idea that you should require a government-issued pass to take part in normal everyday activities is profoundly totalitarian. And where is the guarantee that it would not be extended to other medical statuses, or even become a generalised Chinese-style social credit pass? It has been very depressing to see how, during the Covid crisis, so many people seem to have accepted or even positively welcomed a restriction of their freedoms that in some respects has gone beyond even that which applied during World War II. It becomes easier to understand how the Nazis were able to achieve such a level of public acquiescence in their totalitarian programme.

Thursday, 25 March 2021

Turn of the tide?

Back in 2016, I reported on how the imminent introduction of the ill-considered “sugar tax” was likely to lead to some popular soft drinks brands being reformulated to bring them below the threshold. In a sense it is understandable, as otherwise the drinks would have had to suffer a price increase, but it was highly disingenuous of the manufacturers to pretend that it wouldn’t make any difference to the taste, and that they were even doing it in response to customer demand. This is similar to the weasel words of brewers who insist that the flavour will be unaffected when they reduce the strength of their products.

Christopher Snowdon was wrong in his prediction that Irn-Bru would be unaffected, as inevitably it was, with the accompanying guff from its makers A. G. Barr that nothing would change. However, this is a product that is regarded as something of a Scottish national icon, and its drinkers weren’t going to take it lying down. Whether or not the new version was actually better for you, there was no doubt that it didn’t taste the same.

So, after a long campaign, last year Barr’s released on a trial basis a product called Irn-Bru 1901, which claimed to follow the original recipe from when the drink was first introduced. This proved very successful, and so they have announced that it will become a permanent product. It will only be available in the classic glass bottle, not in slabs of cans, and I’d expect it will be sold at something of a premium, so it will remain a niche product. But there is clearly a demand there which the company have decided to meet. This shows that consumer pressure, if vocal and sustained enough, can change companies’ policies over moves like this.

The brand that really should now follow suit is, of course, Lucozade. This was specifically developed in the first place as a high-glucose drink and served a very specific purpose in helping Type 1 diabetics counter the effects of “hypos”, something that was lost when the sugar content was cut. Surely it would not harm them in the slightest to introduce a “Lucozade Classic” that met its original remit.

In recent years, a number of well-known beer and cider brands have had their alcoholic strength cut. In some cases, such as Stella Artois, the drinkers seem to have grudgingly accepted it, but I can think of others, mainly in the packaged sphere, which have lost their distinctive appeal and disappeared from the shelves. The only beer I can think of where a reduction in strength has been reversed is Bateman’s XXXB, which was cut, at least in the draught version, from 4.8% to 4.5%, but later put back up again. I can imagine a “Stella Classic” at 5.2% would find plenty of takers, even at a premium price, but somehow I can’t see AB InBev being keen to take that idea up.

Sunday, 21 March 2021

Will Covid kill cask?

With the prospect of three long, dreary months still ahead of us before pubs in England (allegedly) return to anything like the normality we knew before lockdown, I have to say inspiration for blogging has rather dried up, unless it was to metamorphose into a general blog about Covid policy, which really isn’t my intention.

However, with a limited measure of reopening now in sight, the thoughts of some brewers and commentators have begun to turn to what role cask beer will play in the post-Covid environment. A particularly provocative take came from Ben Nunn aka Ben Viveur who, at the end of last year, asked Will it be COVID that finally kills off cask beer? A similar question was posed here by Beer Drive-Thru. I think the conclusion is very much that it is a classic “question to which the answer is no”, but it is certainly true that, in that brief window of opening last summer, cask ranges were very much trimmed to meet lower demand, and the chances of the beer ticker finding something rare or unusual on cask were greatly diminished. I didn’t notice any pubs dropping it entirely, though.

With the minuscule amount of business currently available from off-licences and pubs doing cask deliveries, some breweries seem to be falling over themselves to grab a share of that market and keep their name in the public eye, with reports of suicidal discounting which surely isn’t sustainable. The cask market has for some years been characterised by oversupply and fierce competition, and it’s hardly surprising that we have seen a revival of calls for the premiumisation of the category. However, as I have repeatedly argued, such as here, this is putting the cart before the horse and isn’t remotely realistic. It may be possible to secure a certain amount of price premium for specific brands or outlets, but for the sector as a whole it simply isn’t going to happen.

Some brewers of cask have cast envious eyes towards the superior margins enjoyed by “craft keg” beers. However, it doesn’t automatically follow that those returns would be available to them simply by switching their beers to keg. At present, craft keg only occupies a relatively small niche of low-volume brews, typically either of high strength or unusual flavour. It doesn’t go head-to-head with more normal quaffing beers, and there’s only a small grey area where brewers have a realistic option either to go for cask or keg.

Drinkers now tend to be loyal to cask as a category rather than to specific brands. At the time of the birth of CAMRA, many people might have seen themselves as a “Tetley Bitter drinker” and be prepared to drink it either in cask or keg form. Now, however, if a pub switched Taylor’s Landlord from cask to keg, pretty much all the people who previously drank it would either move to another cask beer or take their custom elsewhere. Few people see the two as directly competing alternatives, and the only pub operators I can think of who offer one or the other in their estates are Felinfoel and Sam Smith’s.

Nowadays, the pubs that don’t offer cask tend to fall into the categories of places that are effectively restaurants, down-at-heel boozers that only appeal to a local clientele, high-end trendy bars and some beer-focused places that think not selling cask puts across a modern image. Any pub seeking a wide appeal rather than just a captive market of locals will offer cask in some form. There is a huge amount of loyalty to the category that isn’t going to disappear any day soon. The day Wetherspoon's start dropping cask from some of their pubs in England and Wales is the day you really need to start worrying about its future. It’s not just changing a brand on the bar, it’s making a statement about what kind of pub you aim to be.

In fact, the continued health of cask is indicated by the fact that, contrary to many expectations, the number of breweries in the UK, far from falling, continued to increase during lockdown. However, it has to be questioned how many of those are really seeking to derive a full-time income from brewing, and how many are effectively “hobby brewers”. As Mike Hampshire says in this blogpost:

An interesting twist on the number of new breweries opening is that some are being run part-time, where owners and some employees have personal income from elsewhere. It’s a different kind of challenge for the full-time owners who will feel more personal financial pressure as well as the trading difficulties… My fear is, that although we have 3,000 breweries now, we will see many closures in the coming 12 months.
As I’ve argued in the past, the presence of a large number of players who have no imperative to make a proper financial return from their businesses continues to be a major problem for cask and prevents the market operating in a normal manner. Plumbers and carpet-fitters don’t have to contend with people doing it on the proceeds of a retirement lump sum or trust fund, but small-scale brewers do. It has often been suggested that a shake-out of brewery numbers, while painful for some individuals, might bring sanity back to the market. It was thought that lockdown might bring that about, but in fact the opposite seems to have been the case.

Friday, 12 March 2021

Home on the High Street

When it opened in the mid-80s, the branch of Sainsbury’s on Warren Street in the centre of Stockport, along with the ASDA directly opposite, was the first large, modern supermarket in the town. However, times change, and it closed in January of this year. Plans have now been lodged to use the 3½-acre site to construct 550 new homes.

Residential development is often viewed as a way of revitalising town centres, but in practice it doesn’t really work that way. Town centres developed into busy, bustling places not because a lot of people lived there, but because they acted as retail, employment, administrative, service and entertainment hubs for a wide surrounding area. These activities had a multiplier function, with each encouraging the others, and all providing business for hospitality. How many people actually lived within the town centre was largely irrelevant. While there may be thirty thousand people living in Manchester City Centre now, when thirty years ago there were only a few hundred, that is still only the population that would support the couple of dozen pubs in a typical medium-sized market town, and in terms of the centre’s overall pub trade is a drop in the ocean. The city centre has a thriving night-time economy because people travel in from a wide radius all around.

Being conveniently located for a large number of homes is no guarantee of success, and indeed one of the most typical patterns of pub closure is of stand-alone pubs in the midst of residential areas, or next to local shopping parades, which will often be the only pub within convenient walking distance for a large number of people. Going directly to the pub from home in the evenings is a far less typical pattern of pubgoing than is often imagined, and pubs themselves often seem to form clusters that feed off one another. The same is true of villages, where large housing developments in recent years haven’t provided any shot in the arm for their local pubs. Turning a town centre into what is basically a housing estate is likely to have a similar lack of impact.

It’s generally accepted that there is a severe shortage of housing nationwide, and therefore the redevelopment of land no longer needed for retail has to be welcomed. However, it’s questionable whether schemes of this kind are actually providing the kind of homes people want. Most people, especially those with families, aspire to live in self-contained houses with gardens, not in cramped town-centre flats. In the 1960s, there were high hopes for new tower blocks and deck access flats, but in the long term they often proved socially disastrous, and many have now been demolished. You do have to wonder whether developments such as that proposed for Stockport are in effect creating the slums of the future.

Obviously a lot of retail activity has now migrated to the Internet, accelerated by the lengthy closures during the lockdowns of the past year. Realistically, little of this is ever coming back, and so the retail function of town centres is going to be diminished. If land is no longer needed for shops, or indeed offices, it makes sense to redevelop it for housing. But, rather than being a shot in the arm for town centre economies, it is a symbol of their decline.

This does not mean that there is no future for town centres. I wrote here about the challenges for the revitalisation of central Stockport. Humans are social creatures and don’t want to spend all their time cooped up in their houses. However, town centres need to concentrate on those activities where physical presence is important or essential and that can’t be done remotely. And two of the most important elements that fit that definition are entertainment and hospitality.