I was reminded of Gareth Chilcott’s quote about beer when reading a great book that I received for Christmas – Chris Arnot’s, Britain’s Lost Breweries and Beers. What is more inseparable than beer and England? Filled with entertaining social and economic history, it was also a poignant read as the litany of closures of many traditional brewers has left a huge gap in our cultural and physical landscape.
For centuries beers were eponymous with the towns and cities of their creation. Hoppy, golden Boddingtons helped to define Manchester just as the rich, fruity taste of Eldridge Pope’s Thomas Hardy Ale said much about Dorchester, Bass and Burton, and Vaux with Sunderland.
But this is no longer the case. Boddies is today not a Manchester brewed ale, nor is Tetley’s brewed in Leeds. Both have joined the growing list of landmark breweries that have been closing since the 1960s, often taking their much loved beers with them.
The unthinkable happened in 2006, when the last Tetley’s dray horses were put out to grass on the Pennine hillside: Charles, Prince and Jonjo. Once there had been 120. Then in 2011, Carlsberg, the dominant shareholder, called time on the Leeds base, established when Joshua Tetley acquired a brewery from William Sykes for £400 in 1832, and founded what became a Leeds institution.
Founded in 1832 by Henry Boddington, the Manchester Strangeways brewery was established on a site set up by two local grain merchants, Thomas Caister and Thomas Fry. Brewing ceased on the site in February 2005, and production of the cask conditioned beer moved to Hydes’ Brewery in Moss Side, Manchester, until it was discontinued in March 2012, ending the beer’s association with the city. Today, all that remains is the iconic chimney stack. The cream of Manchester is a straw-golden, hoppy-bitter, and one of the first beers to be packaged in cans containing a widget, giving it a creamy draught-style head.
It was around the same time that Coronation Street came to my attention in the mid-1970s that Boddies also became an integral part of my life. Ena Sharples, Minnie Caldwell and Martha Longhurst were frequently shown sipping milk stout whilst gossiping under their hairnets in the snug at The Rovers Return, and a lifestyle as Northern as Newton & Ridleys.
Today, there are twenty million pints downed per day, but we’re consuming less beer than at any time since the Great Depression of the 1930s. In the second quarter of 2012, pint sales were down almost 10%, and ten thousand pubs – in which beer accounts for around 60% of alcohol sales – have closed since 2000. We’re losing the pub as a community hub, where people enjoy a beer and a chat together
It would appear that our national drink, English bitter, is in seemingly irreversible decline. The UK beer market is now dominated by the big keg lagers such as Carling and Foster’s – which for the sake of shelf life get filtered or pasteurised after brewing to kill off the yeast, then injected with CO2 in an effort to give them back some semblance of life. Besides this, traditional bitters are not on the drinking agendas of the 17 to 25 year old drinkers, new lifestyle choices and consequential shifts in demand have played a part in the decline.
Merger activity has accelerated hand-in-hand with globalisation of production, driven by the search for increased economies of scale and larger markets. The world’s four biggest brewers – Belgium based Anheuser-Busch InBev, London based SAB Miller, the Dutch brewer Heineken, and Denmark’s Carlsberg – now account for over half the global market for beer. Back in 2000, the top 10 brewers accounted for fewer than 40% of global beer sales.
Alongside this, 70% of alcohol in the UK is now purchased in supermarkets – Sainsbury’s, sells 87 pints of beer a second – the vast majority of that is mass-volume, pile-it-high, sell-it-cheap lager. On the supermarket shelves is a cornucopia of hoppiness. There are Belgian beers-a-plenty, new American beers too, but often a wall of shelving is entirely dedicated to British varieties – something is stirring in UK beer production after years of decline.
Out there in the industrial estates and converted pig farms, new micro-breweries are opening, encouraged by Gordon Brown’s Progressive Beer Duty of 2002 which halved the tax paid by those producing fewer than 3000 barrels a year. They are producing superb cask and bottles ales using the best ingredients, sometime reviving ancient recipes and in the finest craft traditions of British brewing.
The emergence of micro-breweries in the last few years has shown how an industry structure can change, produce quality product for a niche market, and with an intelligent, crafted offering, smaller businesses can compete effectively at a local and national level with global organisations.
There are now more than 1,000 independent breweries in the UK, the highest figure for more than 70 years, with 158 new breweries launched in the past year alone. There are now more breweries in Britain than at any time since the end of the Second World War, and we clearly like what they’re brewing – sales of cask-conditioned ales, which ferment a second time in the barrel, have surged by 25% over the past five years.
So what are business lessons we can take from the disruption these micro-breweries have brought to a beer market seemingly flat and in long-term decline?
Maverick branding: The Titanic Brewery in Stoke-on-Trent, birthplace of Edward John Smith, captain of the ill-fated White Star liner has weathered the storm of the endless jokes about beer going down well and has built on Stoke’s association with the Titanic with a selection of beers called Steerage, Lifeboat and Iceberg. To attract younger consumers that are looking for that point of difference and novelty, micro-breweries have been unconventional in their messaging. Using rebellious, humorous or even counter-intuitive language in the beer category will create a disruptive difference with current offerings.
The small scale of the new breed of brewery gives them flexibility, so they can produce short runs of seasonal or special occasion and bespoke ales (Hunter’s brews its Denbury Dreamer, for example, solely for the Union Inn, BrewDog produced Hoppy Christmas) and many of them are now available in bottles, where they’ll continue to gently ferment until you crack them open at home.
Business agility – integrating the Supply Chain: Fuelling an industry-wide trend away from the big national chains and back towards the traditionally close local pub – local brewery relationship, a spectacular success story involves Moorhouse’s Brewery in Burnley. It started life in the C19th making non-alcoholic beer for pubs run by the Temperance movement, and switched to cask beer in the 1970s. Since winning Champion Beer of Britain award in 2000 for its Black Cat mild, and latterly the premium bitter Pendle Witches Brew.
Moorhouse’s has met the demand for its beers by buying six pubs. The £4.2m investment in 2012 in new brewing facilities provide it with an annual capacity of 40,000 barrels. The integration of the retail outlets and brewery has given the company strategic and cost advantages, and it has built on its local identity and heritage http://www.moorhouses.co.uk/site/
Innovation and development of new product: Micro-breweries are experimenting with new styles and reviving old ones: smooth, highly hopped best and premium bitters; potent pale ales; dark, sweet porters, an C18th favourite; rounder, softer milds; heavy, grainy, creamy stouts; fruity, pale amber golden ales. Drinking a local beer produced in the same building its been made in harks back to a reassuring age that consumers associate with authenticity and quality. Product innovation is a key driver of micro-breweries competitive edge, they are meeting the need for authenticity, and enhance the experiential nature of their brands, as well as those looking for something more individual.
Distribution: The industry faced a dilemma over how and where to sell beer, with more people drinking at home. There was the opportunity to take advantage of that, but if you can buy the product in a supermarket, it will make it less attractive and exclusive when people go to the pub. The solution was to start selling a bottled range through independent retailers in the local community, which is more in keeping with the ethos than the big supermarkets.
The Beer House in Waterloo is a good example of the growing prevalence for the authentic and obscure, as it serves 50 premium and craft beers. Classic pub food is served with a contemporary twist to further reinforce the experience of authenticity and uniqueness. As people look to consume more locally based food and drink, bigger breweries are losing out to smaller, indigenous brands that thrive on being the underdog. Often using obscure and humorous branding, these beers are attracting a younger customer that is a key target for the large breweries.
Perhaps the best example of a business combining all of the above elements is BrewDog, founded in 2006 by James Watt and Martin Dickie. The brewery in Fraserburgh produced its first brew in April 2007 and is Scotland’s largest independently owned brewery producing 120,000 bottles per month. Interestingly, it raised £2.9m via Facebook.
BrewDog’s range of beers capture the imagination, each has an ‘identity’ and promoted as a unique product – Trashy Blond, Punk IPA (their flagship brand) Zeitgeist, Dogma, and other memorable products:
- Tokyo (18.2% ABV) – a very strong imperial stout
- Tokyo Rising Sun (13.2% ABV) – a version of Tokyo, aged in Highland or Lowland whisky barrels for 4 years, supposedly “forgotten about”
- Nanny State (1.1% ABV) – a very weak but extremely heavily hopped bitter, brewed as a reaction to criticism of the high strength of their beers
- Tactical Nuclear Penguin (32% ABV) – at the time, the strongest beer ever produced in a competition with German brewer Schorschbräu
- Sink The Bismarck! (41% ABV) – at the time, the strongest beer ever produced. A quadruple IPA
- The End of History (55% ABV) – the beer formerly known as “the world’s strongest beer”. Only 12 bottles released and packaged inside stuffed squirrels and stoats
- Ghost Deer (28% ABV) – the world’s strongest naturally fermented beer. Served from a mounted deer head at the BrewDog bar in Edinburgh
In October 2010 Brewdog opened their first bar in Aberdeen, followed by a further seven in a nationwide network.
BrewDog’s provocative marketing has been a key aspect of the business, and has gained them substantial international coverage. Say goodbye to the corporate beer whores crazy for power and world domination. Swear allegiance to the uncompromising revolution. Taste the hops, live the dream. Learn to speak beer, love fruit and never forget you come from a long line of truth seekers, movers and warriors – the outlaw elite. Ride toward anarchy and caramel craziness. Let the sharp bitter finish rip you straight to the tits.
Ahem. Check out the web site, you’ll be on it for ages http://www.brewdog.com/
The website declares We are proud to be an intrepid David in an ocean of insipid Goliaths, which captures the essence and the voice of the micro-breweries in a global market dominated by four big players. So let’s raise a glass to the rise of the UK’s micro-brewery industry, which represents a stunning 15% of all beers sold. This surely is a nod to the UK’s entrepreneurs and SMEs as to what can be achieved in revitalising a declining market with a vibrant, intelligent and disruptive business strategy.