Friday, 10 June 2022

Trouble Brewing, Trouble Selling

It is obvious these are difficult times for many small brewers and for many of those that try and sell the stuff. The press is full of tales of those who are giving up the trade and handing the keys back, overcome by high fuel prices, high rents and lack of customers.

This week, following the Jubilee celebrations, I was returning a container to a well-known and established local brewery, and stopped for a chat with the owner. "How's things?" I asked.  His face grimaced. "Bad, Peter, bad!" he replied.  He went on to describe the current situation.  Pubs which used to take two or three eighteens a week were now taking only one or two nines. Fuel to power the brewery has gone through the roof, the cost of diesel fuel to deliver the beer is frightening and loads are less than he'd like, making the overall trip less than economic. The cost of ingredients is also increasing to add to a difficult picture.  

Undercutting by other small brewers is also playing a part. When he rings regular customers, the phones are often not answered. Nobody likes saying no - so just don't answer the phone is the easy way out - especially if they are buying cheaper and poorer elsewhere. To add to the woes, those who owe him money - long-standing customers in many cases - who he doesn't want to press too hard - are very slow to pay for the beer. He is owed more money than he is comfortable with. All in all, things are not so good.

On the other side of the coin, I spoke a couple of weeks ago to the owner and operator of  a small chain of pubs in our area. He tells me that the number of customers has never really recovered from the lockdown. Many customers, he thinks, have simply got used to drinking at home and with cost of living rises bearing down, the discretionary few pints in the pub are simply pushed to the bottom of spending priorities.  Where customers do come, they come less often and drink fewer pints. An equally depressing picture.

In my own experience, pubs are less busy than they used to be, though of course this varies. My recent trips to London, for example, have seen pubs rather busy and while prices are higher than the most of the rest of the UK, with a bigger return to work, a tradition of after work drinking and predominant use of public transport, as well as bigger salaries are probably having an offset of sorts that you don't find elsewhere.  I know, for example, that my teatime visits to pubs in my area, seem a lot quieter than they used to.

Looking at the Morning Advertiser and other trade press, the horror stories are there for all to see. The cost of running pubs is ever-increasing and while the gouging of operators by pub companies is less conspicuously reported than it used to be, I do wonder how anyone makes money running a Heineken pub, for example. But they are not alone. Sadly, too, it isn't just those that are new to the trade that are suffering, with previously successful lessees giving up the ghost.

So what is to be done? Frankly, I don't know, but one thing is for sure. Use it or lose it just doesn't apply to pubs, but many of our beloved small brewers. Some have already turned their toes up, and more will surely follow. Get down the pub while you still can.

I also maintain that there are far too many breweries chasing too few accounts in a falling market. Sadly, though, it isn't always the worst breweries that take the knock. 

Oh, and prices. They have to go up due to increases elsewhere, but while that is almost certainly so, it will also put another nail in the coffin. A bit of a perfect storm, or more appropriately, a vicious circle.

 Image used  Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) license.


Curmudgeon said...

The problem of oversupply was all too evident before Covid, but I think many breweries battened down the hatches during the lockdowns and waited to see what would happen. It's only now that the reality is becoming clear.

Skeggy Rock Shoppe said...

Unfortunately, most of these small breweries go out of business and do not even sell the client base or goodwill on to others. The takeover was the story of the bigger brewers for many years. Why not the smaller ones?

This shows the pub outlets are tarts and will switch at a moment’s notice. Economics I say. More supply than demand. If a brewery cannot sell its recipes and customer book, then what value has it built?

Can we have another Jubilee please?

Q said...

look on the bright side.
there's been too many brewers knocking out badly made murk and claiming its meant to be like that.
The economy is a cycle, a downturn shakes that out, reallocates capital, so growth returns of what people want.
and what people want is 660ml of Peroni in a wetherspoons.

jocko said...

It seems to me that it's the cask brewers who are suffering.The price of cask beer in London has gone up dramatically but the keg beers are slightly cheaper in my experience.The price gap is narrowing and that's bad news for cask..cheers

Cooking Lager said...

I asked a local publican how business was doing as he got out of his top of the range, Range Rover. "Grim cookie, he said, the bitter might be doomed unless more people believe in saving pubs". He looked at his solid gold Rolex and said "but I better get in the pub and get serving, do my bit for the bitter and for beer" A regular came in on his way to the food bank to feed his kids "I'm struggling to afford these £4.50 short measured pints, but it's important I spend as much of by dole cheque as I can on them to help protect craft brewing and pubs" he said, I nodded in agreement.

retiredmartin said...

A very good read, Peter, and lots I agree with. Brewing quality beer (Kelham Island and Scotland's Fallen for two) is no guarantee of survival.

A few observations from a few days in east Scotland this week. The Beer Guide bars there (no Spoons) had fewer hand pumps than previously, with one or two real ales the norm. Suits me, and quality held up (NBSS 3 the norm), but generally that one beer was Timothy Taylor Landlord and the second was a Stewart beer (always good).

In terms of custom, I saw the Greene King pubs in St Andrews heaving, the seaside villages ticking over at best.

As you say, use them or lose them.

Anonymous said...

Freehouses in particular, need to adopt the 'Spoons method of 'less is more'. Less money for a pint drives more custom. Of course people will be drinking less when prices go up, keep them reasonable and people will drink more in your establishment.

£5+ for a pint of cask is profiteering in my opinion. I've been to pubs where a pint of cask is still in the low £4's. They still survive managing to sell a pint of cask for this price. They'll get my custom more regularly and for more than one pint. Charge me over a fiver, i'll only be there for one and move on.

Anonymous said...

I agree with the last poster. Keep prices down and people will buy crisps and nuts.

Bobs Crisps

The Stafford Mudgie said...

Not only breweries.
Amber Taverns and their 154 pubs are up for sale.
Punch are said to be interested.

Curmudgeon said...

I think that's a cash-in rather than a fire sale, though. I've seen no evidence that Amber Taverns are struggling financially.