Saturday, 1 February 2014

A Piss Up in a Brewery?

I've quite a lot of time for Thwaites - nowadays that is. It wasn't always so, as almost all they ever offered was smooth beer in various forms, but a concious decision several years ago to return to cask has seen the brewery profile multiply by a huge factor and with beers like Wainwrights becoming a runaway success, they had the confidence to build within the main brewery, the Crafty Dan Brewery, producing specialist craft beers in cask, keg and bottle, which I visited and wrote about here. The beers have been good too, with several winning awards and some of their seasonal beers have been spectacularly good - and different.

Underlying all this, for several years the bigger plan has been to vacate the cramped central Blackburn premises which houses the Star Brewery, sell it to Sainsbury's for yet another supermarket and build a new, smaller, state of the art brewery on a greenfield site on the outskirts of Blackburn by the motorway. Seems like a good plan, so what could possibly go wrong? Well everything it seems. The local council has offered several sites but none has been followed up and it now seems for reasons unknown, that the proposed Sainsbury redevelopment will not take place either. It is hard to ascertain why and although the local Lancashire Telegraph has a good go at it here, I'm none the wiser really.

But one thing is clear. Thwaites are to sack most of the brewery workforce, close the main brewery which they describe as "obsolete", keep Crafty Dan going, outsource the brewing to Marstons of all their main brands (some may also be brewed at Burtonwood I am told) until such time as they can find a new brewery site. Yes the same brewery site they have been unsuccessfully seeking for years. Thwaites it seems are more or less up shit creek without a paddle. Their main brands brewed by rivals, their brewery more or less closed, their workforce sacked and the new brewery no nearer than ever. Some cynics from rival breweries in the North West that I have spoken to, believe that Thwaites will never open a new brewery.

 Only one way to prove them wrong I suppose, but time is running out.

The workers didn't take being given the heave ho lying down. The Thwaites sign on the brewery tower was altered to reflect their feelings.


Ed said...

I've really warmed to Thwaites in recent years as they've been making some great beers but this is an awful decision, twats indeed.

Rob Sterowski said...

Terrible mismanagement. Has there ever actually been a move to an out-of-town site that improved either the quality of the beer or its sales?

Anonymous said...

A huge 1960s brewery running hugely under capacity with 1960s technology.

Rising energy prices, climate change levy and loss of contract volume have forced Thwaites hand here.

Tyson said...

Climate change levy has forced Thwaites to act like twats. I've heard it all now...

Ed said...

A quick google shows profits at Thwaites were down last year, but they still made over £10 million profit. Not quite sure how their hand was forced.

Andrew said...

I think Anonymous has probably got to the nub of the situation. In an era of over-capacity, traditional breweries like Cains and Thwaites are being caught between nimble, tax-effective craft breweries and larger brewers who can brew for the supermarkets more cheaply.

The route both have chosen is to retreat from the supermarket trade and focus on craft brewing, though Cains' craft brewery has yet to see the light of day.

I agree the changes were probably forced on the two companies but the way both have managed the changes looks less than ideal.

Curmudgeon said...

Hard to avoid a comparison with Young's here. However, as anon says, surely the issue with the current brewery is not that it's on a cramped site but that it is far too big for their needs.

When they installed new plant in their existing site (which is cramped) Robinson's halved the maximum brew length.

Cooking Lager said...

Always funny when a disgruntled soon to be canned employee makes a very public point.

As for the future, who knows?

Tandleman said...

Anonymous may well be right, but then again it is hardly difficult to be so, as that is entirely why Thwaites identified years ago they'd need a new brewery.

The point seems to be the singular ineptness in so doing.

StringersBeer said...

There's a geezer near us who always threatens to shut down (and lay off his staff) when he's having trouble getting the council to see things his way on planning issues. Hasn't failed yet.

Andrew said...

@Curmudgeon I think Young's and Thwaites were different situations. Young's was not so much an over-capacity issue, more that it had valuable land and external shareholders such as pension funds which were agitating for the value of the land to be realised. In 2006, Young's succumbed and sold its site in SW London for development for £69m.

Thwaites is a family-owned company so does not have external shareholders. Whilst it has land, it is not very valuable, say worth a few £m. It is an over-capacity issue, not pressure to realise the value of an expensive London site.

@tandleman. Agreed, it's very poor management.

@StringersBeer. Alas I don't think that anecdoete is relevant here. Thwaites has been offered plenty of sites by the Council but has not taken them further. And it has failed in negotiations with Sainsburys, not the Council.

Dave said...

Whilst the family may own a large proportion of the company, there are external shareholders - Thwaites is a quoted company.

Curmudgeon said...

Yes, the Young's and Thwaites situations are not identical. However, both companies made apparently sincere announcements that they were seeking another site in the local area and then for whatever reason dragged their feet. We all know in the case of Young's it never happened - there must be a strong chance it never will with Thwaites either.

Tandleman said...

I think you may be right Mudgie, which was the point of my post in the first place. Seems to me that Thwaites has identified all its issues absolutely correctly, but somehow failed to execute its plan.

The reasons are still not clear.

Anonymous said...

Personally, whilst they may be "under capacity", aren't they selling Wainwrights by the bucket load?

Is there any argument whatsoever that Thwaites are losing money? I think not.

This is brewing cynicism pure & simple. Shipping the brewing off to Marstons is just the cherry on the cake!

Stono said...

they may be selling Wainwrights by the bucket load but this is the old issue similar to busy pub syndrome, turnover does not equal profit.

If due to the age/size/cost of running their brewery equipment pushes their cost of brewing up to the price point the market determines theyve got to sell beer at, they make little to no profit, especially as the cost of ingredients can vary and add additional costs to it.

but with little to no profit they cant invest money into replacing the old brewing gear to shiny new stuff that would dramatically lower the cost of brewing for them.

arguably in a classic style brewery like Thwaites its debateable whether thats a sensible move anyway, hence the search for other locations, but then the profit thing hits you again as youve no money to invest in relocating either.

all you can do is try and get a loan, issue equity to generate cash, or accept the conditions at the moment are never going to improve long term for you and take a more drastic step.

whether thats bad planning I dont know, it maybe bad foresight, but the market conditions may never have been perfect for Thwaites to consider replacing the brewery, and its potentially only their recent rennaisance back into cask of late that allows us to moan about them relocating brewing some of there beer elsewhere, rather than lamenting that they simply became another closed brewery statistic.

Curmudgeon said...

Wainwright is one of the widely-available beers that still retains some respect amongst enthusiasts. Moving it to Marston's in the long term will undermine its credibility.

It has to be said that Hyde's seem to have successfully managed the transition to a much smaller brewery on a new site, so I fail to see why it has proved so much of a problem for Thwaites.

The whole episode gives the impression of a company unclear about its direction, which history has shown is never a good sign. Odd decisions and changes of course have so often ended up takeover.

To run a family brewery successfully you need to have a pretty single-minded commitment to it.

David Attenbeer said...

@curmudgeon One of the reasons that companies reduce the brewlength is because they change from an infusion mash system (brewing max 3 times a day) to a lautertun system (brewing up to 10 times a day). This reduces peak loadings on the utilities, so saves money that way, and also means that each part of the brewing process is more efficient as it has been separated. Usually this would save in the region of 20% cost overall. Add in the labour savings (most of these only require a couple of people on brewing and 3 or so on packaging per shift) and the saving should be easy to calculate.

The cost of building a new place at the capacity of Thwaites, with the packaging lines, is rather significant - £15m was a figure I was told for a similar size project. I'm with Anonymous on this.

I don't think that you can blame the day-to-day management for this, they're the ones who created the great beers like Nutty Black and Wainwright after all.

the_penfool said...

Can anyone confirm what happening with Nutty Black, increasingly hard to find in the shops. As if they have stop making it in bottled form?