The renaissance in craft beer production, which has seen a 24 per cent increase in the number of new microbreweries setting up in the UK last year, has not left Tunbridge Wells untouched.
According to figures released by the accountancy firm UHY Hacker Young, 361 new breweries opened their doors in 2014-15, up from 291 the previous year and over treble the 2009-10 figure.
And with demand for craft ales reaching an all-time high, business is booming for the local producers.
The Pig & Porter Brewery in High Brooms opened 18 months ago and is the true definition of a microbrewery; with the only full time workers being the founders Robin Wright and Sean Ayling, and just one other part time member of staff.
Mr Right believes they set up just in time to avoid plunging into a saturated market.
He said: “Microbreweries as a percentage of the industry are still a tiny part of the market. But there is a lot more competition about now as craft beer is a rapidly growing market.
“Luckily we have been established long enough to have made connections, customers and have a solid brand so we don’t have to go around knocking on pub doors in the local area.”
“There has been at least 15 other breweries setting up in the area since we were established. We do have the sense it is getting very crowded.”
Despite the small workforce, the Pig and Porter is still expanding and plans to almost double its production by installing two new fermenters to add to its current three.
Mr Wright explained: “At the moment we can produce two and a half brews a week, which totals about 7,000 pints.
“We then sell to the pubs in firkins of 72 pints which as a rule we sell for around £70, or £1 per pint unless its premium, which can be about £1.20, but the big establishments can sell for more.”
Despite a turnover of around £7,000 a week, almost half of that goes on production, even before other overheads are taken into account.
Mr Wright explained: “As a rule of thumb delivery, ingredients and duty on a £70 cask will be around £30, before paying ourselves, other taxes, maintenance and the rest.
“If you can clear a ten per cent margin then you are doing well. It does become far more effective once you start generating a steady turnover.”
But, increased competition has the potential to hit margins as more competitors seek a limited number of hops.
He said: “Hop prices are going through the roof as there is a really limited supply and the big brewers are starting to develop more hoppy brews on the back of their popularity.”
The dominance of a few multinational companies’ means selling on the finished products is also tough.
Mr Wright said: “One of the main challenges for microbreweries is getting into the tied pubs, which are dominated by the big beer companies. It has always been a challenge.”
The beer tie, which the government has pledged to scrap, means competition between the microbreweries themselves is even more intense as they fight for market share in the free houses.
Mr Wright said: “Any scrapping of the tie is a long way away and at the moment at least 80 per cent of the market is owned by the big pub companies.
“Mid-sized regional brewers like Harvey’s may take a bit of a hit from the microbreweries, but the big brewers will hardly feel it.”
Mr Wright explained the best thing for any brewery serious about expanding beyond its local area is to look farther afield.
He said: “To get faster growth we have ended up selling around the country and do particularly well in larger urban areas, with Manchester being one of our best markets.”
Moodleys microbrewery in Penshurst has taken a different approach to capitalising on the boom in craft ales – by tapping into the growing demand by consumers to brew their own beer at home.
Founded in 2008 by former stockbroker, Yudhistra Moodley, the company focusses on extremely niche products and selling on kits which allow people to experiment at home.
Employing only himself, Mr Moodley said: “I make real ale mainly to order and so only produce around 70 pints a week.
“The last batch I made was for a local company which turned it into a sorbet for use at the Bobby Moore suite at Wembley.
However, it is selling home brew kits, which retail at around £30, and the ingredients which ensure he has a viable business.
He said: “I try to keep my revenue streams diversified. Some of it comes from teaching the art of brewing and others from beer or the kits. There has been a huge increase in appetite for these products.
“I can then sell people the hops, malted barley and yeast they need to use them.”
Mr Moodley believes social attitudes have changed towards craft beers.
He said: “Ultimately the public are becoming a lot more discerning about what they consume. People may be drinking less, but they are drinking better.”
What is the Beer Tie?
The Beer Tie is a 400 year-old system whereby big pub companies keep exclusive control over the supply of beer which can be stocked by the landlords who lease their premises.
Landlords can benefit from economies of scale on capital costs, with the pub franchise providing discounted furniture, glassware and other perks.
But it does mean landlords are limited in their range of beers as they are compelled to only stock beers supplied by the company which owns the pub, making it harder for small brewers to win market share.
It can also mean landlords pay higher prices for their beer of up to 60p per pin, according to CAMRA, in what is known as a ‘wet rent’, although big pub companies say this is offset by a lower ‘dry rent’ which is charged on the leasing of the building.
- Pete Brown, who compiled the The Cask Report said: “A great deal of the new interest in beer focuses on the notion of ‘craft beer’. The term lacks a precise defi nition because by its nature it describes a broad and diverse category of beers. Among beer afi cionados and around the industry, there is a debate about what is and isn’t craft beer which is often coloured by personal preference. Cask ale and craft beer are not entirely the same, but they are joined at the hip, inseparable and overlapping. For most people, craft beer is not related to format, style or origin – it’s more about beer brewed by small brewers or beer brewed in small batches.”
- SIBA (Society of Independent Brewers) has nearly 780 independent brewery members who between them brew 1.4 million barrels – or 403 million pints – of beer between them, the vast majority of which is cask ale.
- Craft ale is in volume growth, outperforming the on-trade beer market by 4.4 per cent. The UK now drinks 634 million pints of cask ale every year (as of 2014).
- Three new breweries open every week in the UK. There are now over 1,472 breweries in Britain and the vast majority of these mainly brew craft ale.
- Correct branded glassware is important. 66 per cent of cask ale drinkers would prefer to see their beer in a branded glass.
- Cellar temperature should always be kept between 11 and 13 degrees Celsius.