People will drink in local brewery taprooms if pubs keep ignoring independent beer
Why does this matter?
Independent breweries pivoting to DTC taprooms (46% now have them) represents a significant distribution strategy shift that BevTech founders should understand as they build solutions for craft producers navigating market access challenges.
Highlights
Despite growing consumer demand for independent beer, gaining space in pubs remains restricted. Now, breweries are now selling more beer directly to drinkers to adapt to global brewers’ market domination. But db asks will pubs miss out? Yesterday, the Society of Independent Brewers and Associates (SIBA) published its in-depth report into the state of independent brewing and revealed a few stark realities about how the beer and hospitality sector is evolving. However, some of the results showed how pubs bypassing independent local beer in favour of big brands was actually seeing consumer interest building elsewhere, showing how if pubs stop catering for what people want, they will go elsewhere. For example, the findings from the report outlined how eight out of 10 beer drinkers, along with 89% of 18-24 year olds, say it’s important to have a range of beers from small breweries on offer alongside global brands. Big beer in pubs is adapting where we choose to buy drinks It flagged that, while 82% of small breweries can sell some beer to local pubs they still report being ostracised from the marketplace and admit being unable to sell on average to 62% of the pubs in their local area due to the dominance of the larger global brewers. Added to these challenges, SIBA revealed that the independent brewing industry has remained nimble and to navigate these challenges around half (51%) of independent breweries now have a shop and 46% have a taproom on their brewery sites with a third (33%) now selling beer through market stalls and events. Reversing declines and creating jobs Beer itself was also seeing some positive momentum with the number of consumers that ever drink beer now clocking up to 50% in this year’s results, reversing the declines seen in previous years. As the annual Indie Beer Week continues to celebrate the sector this week, the report findings were well-timed to illustrate how breweries have found ways to thrive. In fact, to help manage this expansion, breweries surveyed have also said they intend to create more than 780 jobs this year and many within the independent beer sector have signalled that they see investment in developing staff as a top priority. Encouraging trial The report also highlighted that the majority of the beers made by independent breweries continues to be packaged into cask (58%) with pale ales, bitters and golden ales dominating the top three beer styles, showing that the dispense method is still being richly embraced by the UK beer industry. While only nearly a quarter (27%) of beer consumers drink cask beer, it also identified that four in 10 would try cask beer if they were offered a free sample and 31% would try it if it was made locally, which shows how much potential cask ale still holds.. Demonstrating the importance of advocacy, 43% of drinkers said they would try a new drink if it was recommended by a friend or family member in a move that reflects how crucial word-of-mouth can be among local communities and businesses. The report also shows that the independent sector remains fragile. For example, with continued significant pressures – such as from the cost of living crisis, government regulation and taxation and overseas uncertainty - threatening the sector. Almost half (49%) of breweries revealed that survival was their top priority and nearly a third (32%) said that they expected turnover to fall this year. Plus, putting these struggles into context, more than half (53%) of brewers sought no investment last year which led to 137 independent breweries closing and one pub a day shutting its doors. Staying 'nimble' Speaking to the drinks business about the report, SIBA chief executive Andy Slee said: “Beer drinkers know they can enjoy a great tasting indie beer served at source in their local breweries’ taprooms. This year’s Independent Beer Report shows that brewers are capitalising on this by expanding their direct sales through opening taprooms, but they still represent a small number of venues compared to the 40,000 pubs operating at the heart of the communities across the UK." Slee admitted to db that “the report also shows that 80% of beer drinkers want to see more indie beer alongside global brands in their pubs which we believe helps boost overall beer sales. Ahead of any outcome from the government's pending access to market review we would encourage publicans of all types to stock local independent beer to give customers what they are demanding". He observed how “there is no doubt that trade is tough and events are changing rapidly, but small independent breweries demonstrate what successful local community businesses can achieve if they have the right conditions". Slee explained: “Small breweries are nimble and innovative and want to expand and grow. Consumer interest for their products is there, they just can’t always get their beers in front of them. Having their own taproom and shop is part of the solution and it’s great to see that more are doing so. But it’s also important to have the chance for local pubs to put them on the bar and access continues to be too restrictive for most small breweries.” Indie Beer Week continues until 19 April promoting independent beer, pubs and people with a series of events taking place in brewery taprooms, pubs and bars across the UK.
The Drinks Business
