Thursday 29 December 2011

Why I'm Not Opening a Brewery Any Time Soon

It's a question I'm often asked, and I was asked again when I was interviewed by the local paper for this story. "Would you like to do it for a living?"

Quite apart from not being good enough, I love the way people assume there's little or no difference between a hobby and a professional operation; then there's the current economic climate which is hardly conducive to new business development. Yet there are new breweries opening up every month it seems. In Kent alone, the number of breweries (including brewpubs) has doubled in the last two years. 

Yet we are constantly hearing that pubs are closing at an alarming rate. So, let me work this out for a moment. You've got more manufacturers competing in a shrinking market. Where are these breweries going to sell their beer?

Seriously, I can see a saturation point arriving in the not too distant future.

I work in the healthcare industry for a company that sells medical consumables to care homes. We're are not unique in what we do but we succeed because we have what, in management speak is known as a USP or a unique selling proposition. If you have a USP you do not have to deal on price; this is expressed much more eloquently by Tandleman and Hardknott Dave on their respective blogs. How many of these breweries have a USP? How many of these breweries will still be trading this time next year?

So unless you have your USP you are competing in an increasingly competitive marketplace where price and progressive beer duty are your only weapons, you've then got transportation costs, casks to buy (and more importantly get back from the pubs) and late payers to deal with. 

So, if you could cut out the transportation costs, cask issues and late payers, all you've really got to come up with is a point of difference; whether that is in cask, keg or bottle, it is possibly viable. Yup, I'd bodyswerve a new brewery but a small scale brewpub, in the right location, I'd jump at (if I had the readies).


  1. Don't you see the situation where good interesting beer can push out some of the dull boring brown beer.

    The economics of cask is pretty poor (flooded market) but bring in keg and bottles and it looks a bit better. Less people doing it and higher margin.

    Still a brewpub would be great.

    I feel a blogpost myself coming on ;-)

  2. In a way you've answered that yourself, Gregg. Brown beer on cask? No. Pale beer or impy stout on cask, certainly. Strong beer on keykeg, which can undergo secondary fermentation and last more than three days. Yup.

    The implication of low gravity duty relief threshold being raised to 3.5% will only suit macro brewers as there is no additional relief for micros.

    But, yes, it is all about point of difference. I'd be surprised if none of the breweries that opened in Kent in the last two years went under in the next 12 months.