Local beer is offering a lifeline to Britain’s troubled brewing and pub industries, with volume sales up by an estimated 6.8 per cent last year to over 1.4 million barrels, according to the Local Beer Report, published 28 February by the Society of Independent Brewers (SIBA). Over the same period, on-trade beer sales overall declined by 4.7 per cent (BBPA Beer Barometer).
SIBA brewers investing, expanding, employing
The report, based on a survey of 315 brewers belonging to SIBA – around 50 per cent of its total membership – celebrates local beer as a British success story. Local brewers now employ nearly 5,000 people directly and the majority are investing to generate further growth and employment opportunities. At the same time, their brewing skill and innovation is providing the UK’s drinkers with a staggering 3,200 permanent ales encompassing a wide diversity of beer styles.
While many larger brewers and pubs are cutting staff numbers, SIBA members expanded their workforce by 25 per cent last year. Reflecting the labour-intensive nature of craft brewing, SIBA’s smaller brewers employ one person for every 500 hectolitres produced, compared to one per 3,000 HL in larger breweries.
SIBA chief executive Julian Grocock said:
“The local brewing industry described in this report is one that we should all be raising a large glass to, such is its positive contribution to the economic and social health of the nation.
“Local brewing is unusual, if not unique, as a British manufacturing industry that is increasing production and market share, welcoming new producers, generating significant employment, investing for a sustainable future and contributing economically and socially to the hundreds of localities where independent brewers are based.”
BeerX event
BeerX, SIBA’s celebration of British beer and brewing, will continue the themes of the Local Beer Report. BeerX is a new event this year, taking place in Sheffield on 13 – 16 March. On 15 March, a number of speakers from the brewing industry in the UK and abroad, as well as politicians and one TV chef, will set out their vision for British beer. BeerX also includes a Festival of Beer, offering some 600 beers to trade and consumer visitors.
SBR and the ‘investment dividend’
Fundamental to the success of the local brewing industry is Small Breweries’ Relief (SBR), the relief on beer duty for smaller brewers, introduced in 2002. The report states that “the crucial role of government through the introduction of SBR cannot be underestimated,” and adds that 85 per cent of survey respondents would struggle without SBR, and more than half believe their brewery would fail.
Small Breweries’ Relief is a powerful demonstration of the benefits of targeted investment. Small brewers in receipt of SBR are, almost universally, using the saving to secure their brewery’s future. Last year, two-thirds of SIBA brewers invested in their brewery: top of the priority list was new equipment and quality systems to ensure their beers are of the highest standard, followed by marketing, staff recruitment and training. Using SBR savings simply to discount beers is not a priority for most SIBA members, despite the very competitive market.
SIBA chief executive Julian Grocock added:
“On average, SIBA brewers re-invested 23 per cent of turnover in 2012, demonstrating real confidence in the prospects for their business. This young, buoyant, local brewing industry, creating employment and contributing to local economies and communities across the country, is, as we term it in the report, the ‘investment dividend’ that the government continues to reap from SBR.”
He added, “Given the clear connection between investment and a thriving industry, we remain baffled by the government’s stance on beer duty, which amounts to a disinvestment in the same industry that they are supporting with SBR. This year, as in previous years, SIBA is urging the Chancellor to extend their investment in British beer, by abolishing the unpopular, outdated and ineffective beer duty escalator.”
Diversity and innovation
The proliferation of British brewers has been more than matched by that of the beers they produce. The 308 cask ales listed in the Good Beer Guide of 1977 has turned into a 25-page index in the 2013 edition, listing 4,500 beers in regular production. SIBA members account for 3,200 of these, as well as an estimated 5,000 seasonal ales and 2,500 bottled beers.
The last 30+ years have also seen an explosion of beer styles. Golden ales are almost universally brewed – by 94 per cent of the survey respondents – although traditional bitter increased its share slightly last year. Historic styles including stouts, porters, barley wines and India Pale Ales have enjoyed a resurgence, while influences from across the brewing world are also exerting an influence on British craft brewing.
Eighty-five per cent of SIBA members’ output is cask ale – a 5 per cent increase on last year’s figure. Sixteen per cent are producing some keg beer, while 75 per cent offer bottled beers.
Bringing beers to market
Ensuring its members had the best possible opportunity to bring their goods to market was SIBA’s founding principle and led to the Access to Market initiative, established in the late 1990s. The Direct Delivery Scheme, launched in 2002, is the most commercially successful output of the scheme, with sales of more than £12 million last year – a 3 per cent increase on 2011.