Tuesday, 12 June 2018

Which route to market?

I have written before about the seemingly unstoppable rise in the number of new breweries in the UK, and how I consider that for some time, their numbers have reached a level which is un-sustainable. I know I’m not alone in thinking this, but they keep on coming, fuelled either by people “following their dream” or investors out to make a quick buck in what they see as a still growing market.

If proof were needed that brewery numbers have increased exponentially, I picked up a copy of the latest (Summer) edition of “Sussex Drinker” last week, whilst attending a joint social at the Greyhound in Charcott between my own CAMRA branch and a neighbouring one.

The Bru-News section, which gives updates on all current Sussex brewers, now runs to eight pages, and lists 60 separate breweries. A few of these are still in the “start-up” phase whilst, for various reasons, there is no update on several others. One or two are reported as “not currently brewing”, but the overall picture still remains one of un-fettered growth.

The main question to ask in relation to this is where does their custom come from? How do they find outlets wanting to take their beer, and if they do find places, does this involve elbowing another small brewer’s beers off the bar? The overall picture in the on-trade looks less than rosy, with pubs continuing to close, and whilst there are some well-publicised re-openings (see this blog for examples), trying to find sales outlets for these new brewers.

The appearance on the scene of micro-pubs, may have taken up a little of the slack, but given their size and often limited opening times, they are not proving to be the licensed trade’s salvation by any stretch of the imagination. This still leaves a growing number of micro-breweries chasing a dwindling number of pubs and bars, willing or able to take their beers. So what can be done in order to avoid mass carnage on the UK brewing front?

Having recently returned from a trip to Bamberg; a city which is home to nine breweries, I could not fail to be amazed by the variety of good beer available there, not just in Bamberg itself, but in the surrounding towns and villages. For example, the small town of Forchheim, which is a short train ride from Bamberg, boasts four breweries, each turning out a variety of different beers. So how is it possible for a town of just 25,000 people, to support four breweries?

The answer lies in the history of this part of northern Bavaria, which is known as Franconia (Franken in German). Following the end of WWII, and the partition of Germany into East and West, Franconia found itself relatively isolated from its former neighbours by the Iron Curtain, which ran along its northern and eastern flanks. This isolation allowed the region to plod along slowly at its own pace, sticking with the traditional ways and methods which had served it well for many decades.

Nowhere was this more apparent than in brewing, and here beers which have disappeared from other parts of Germany, can still be found; almost as if the whole region had been stuck in a time warp. Many villages in the area still boast their own brewery, and the majority of them are family-owned. They have been passed down through several generations to the present day, carrying on in much the same way as they have done since pre-industrial times.

I have been visiting Franconia on and off for the past decade, so am quite familiar with the region, its pubs and its beers. This interest was sparked after I picked up a copy of The Good Beer Guide to Munich & Bavaria; a CAMRA publication, which appeared in 1994. It was researched and written by former journalist, Graham Lees, who was one of the four founder members of CAMRA.

Lees had produced the guide after spending several years living and working in Munich during the late 1980’s- early 1990’s. Given that Bavaria is by far the largest of the German states, occupying a similar land area to that of Scotland, he obviously carried out an impressive amount of research, and the guide is certainly no light-weight when it comes to recommending the best beers and the best places in which to drink them.

When Graham was researching his book,  Bavaria boasted 750 breweries, which was a fifth of the world’s total at the time, so you really have to take your hat off to the man. Considering its importance as Bavaria’s capital, and the fact that Lees was living there, Munich gets a fair mount of attention, but Lees does make special mention of Franconia which, at the time contained over 450 breweries; not bad for an area the size of Wales!

In the introduction to the chapter on Franconia, Lees opens with the statement, “For the beer enthusiast, Franconia is close to Paradise – and fortunately not so inaccessible.” He then goes on to describe a brewing culture which predates industrial times in both scale and practice. He mentions villages, of no more than 2,00 people, having two or even three breweries; many producing no more than a few hundred barrels of beer a year, most intended for consumption in the family run pub.

And here is the crux of the matter, and the key as to why this rural, almost cottage industry has survived for so long. He elaborates by describing how alongside the brewery and the pun, the family enterprise might also include a small farm, a distillery producing Schnapps, a butcher’s shop, or even a slaughterhouse. No single part of these family is profitable on its own, but lumped together they combine to produce a reasonable income.

Bearing in mind when the book was written, the author says that as we approach the 21st Century, Franconia is gradually sliding into the 20th, placing much of this centuries old way of life at risk. He warns that in the years leading up to the publication of his guide, more than 50 breweries closed in Franconia, taking with them some excellent beers.

Having read this you can perhaps understand as to why I was first tempted to visit Franconia. I was not alone, as the region is now a Mecca for dozens of other beer enthusiasts including, in recent years, many Americans. The latter group have particularly taken the area to heart, possibly because of past military links. A large contingent of American forces was stationed in Bamberg, in the years which followed the end of WWII, and then afterwards as a result of Cold War tensions. It is also not uncommon to come across fellow beer enthusiasts from closer to home, when visiting the local pubs

Nearly a quarter of a century after Graham Lees’s book appeared, good beer is still widely available in Franconia, perhaps given a welcome boost by the conditions described above. With the increase in “beer tourism” many village pubs have branched out by offering accommodation, and this obviously provides an additional and very welcome source of income.

If this model works in rural Franconia, then why shouldn’t it in a county such as Sussex?  If small breweries can prosper in the former, why can’t the same thing apply in the latter? The answer of course is that most of the breweries in Franconia are well-established enterprises, which often date back many years, whilst nearly all those in Sussex are relative newcomers, devoid of the ties and the back-up which enable their Franconian counterparts to not just survive, but also prosper.

In Britain the traditions of close links with village life and the land have virtually died out; even in rural areas. The disappearance of this way of life was not as long ago as you might think, as just few generations ago it was not uncommon to find the landlord of a rural pub either working on the land during the day, or employed elsewhere, leaving his wife to run the pub during his absence. Several of our now sadly vanished country breweries, started off in a similar fashion, providing beer to thirty agricultural workers, and a handful of rural pubs. Ridley’s and Rayment’s  spring to mind, but I’m sure there are quite a few others.

There is one area though where the new wave of UK brewers could follow their much longer-established Franconian counterparts, and that is in off sales at the brewery. It is quite common in Germany to turn up at the brewery yard, and load up you car with a  crate or two of bottles, to drink at home. I saw evidence of this, a couple of years ago, when I visited the small brewery of Kloster Mallersdorf, where the brewing is carried out by nuns, and last year I saw customers loading crates into the back of their cars at Spital Brauerei, in Regensburg.

This practice has also become increasingly popular in the US, where there has been an unprecedented growth in small breweries. Filling up your “Growler”, as portable and reusable containers for draught beer are called on the other side of the Atlantic is a common occurrence at many breweries, so this is another area where UK breweries could capitalise on.

Quite a few of them have gone down this route and are reaping the benefits. Locally Westerham and Rockin’ Robin, spring to mind, but I’m certain there are many more. Selling your beers in Farm Shops is another source of income, and here breweries are mimicking their German counterparts. Five litre mini-casks are also a good idea, and I have seen an increasing number of local shops offering these.

Although Harvey's of Lewes and Fuller's of Chiswick, are long established breweries, both have impressive and well-stocked shops attached to their respective breweries. Fuller's have only recently re-opened their Chiswick shop, following an extensive re-fit. Fellow blogger BryanB, found  "Growlers" being used this side of the Atlantic for draught takeouts, when he called in the other day, along with much more.

Certainly these options are far better, and also far less risky, than relying on the fickleness of a diminishing free-trade market. The latter is increasingly accompanied by ruthless price-cutting, so if you have a brewery shop, not only do you have a guaranteed outlet for your products and somewhere to showcase them, but you will be able to charge a much more realistic price for them.


ETU said...

What are property prices, and, consequentially, business rates (or their equivalent) like in Franconia, Paul?

They seem to be the scourge of so much here.



Russtovich said...

I'm going to deviate from my usual cut-n-paste commenting on this post.:)

First off, very good write-up Paul. Informative and thought provoking. And now, I'll ramble a bit.

I love Michael Jackson's six part Beer Hunter series. I watch it about once a year. Every time I watch part 4, the Fifth Element (the one on Germany) I get the urge to go over there and experience it for myself (which I'll do one day). I've been to Munich, mostly Oktoberfest, but would love to travel around Franconia. I think you've pegged it right about how it seems to work better there than the UK or even over here for small, local breweries. With that said, Kent might be a good place to emulate that in the UK. You've mentioned how Harvey's have kept some of their best beers from going national. After being a huge Guinness fan for years (up till about 2012) I'm now leaning more towards beers being regional rather than (inter)national.

With regards to off sales that is fairly common over here. It's a substantial part of the business for micropubs or micro breweries. Mostly growlers and squealers, though some larger places sell by the can or bottle as well. Heck, I know a few places within 35 miles or so from me where, on a Friday afternoon in the summer, you basically have to drop off your growler and come back an hour later as they have that many to fill (or stay and have a pint till they get to yours). :)

Some small places are starting to do the off sales over in the UK. Martin posted about the Gothenburg in Prestonpans recently and was a bit surprised to find his beer had been brewed on premises. Turns out Kentwood Brewing took the pub over and brew there now. I dug around and they were granted a change to their license to allow off sales and online sales back in Sep 2016:


I think the five litre mini casks are also starting to become more popular. Pub Hermit mentioned he has them just last month:


Continuing in the same theme my brother lives in northern France and he's noticed locals at his beer haunts have been mentioning the Perfect Draft machines lately.

So, as is often the case, tastes and attitudes are constantly in flux. Perhaps for a lot of the new, smaller, breweries the motto should be "brew locally, think regionally". :)


Russtovich said...


My better half interrupted right at the end. I was going to add a PS, so....

PS :)

Paul, would you rather drink 3 12oz bottles of smoked beer on a warm sunny afternoon, or rather on a semi-cool drizzly afternoon?

I currently have a 5.4% bottle of smoked Helles from one brewer as well as two bottles of 5.5% smoked ale from another. Figured I'd drink them all together one afternoon. The weather for Wed/Thu (it's still only Tuesday here) are for drizzle and a high of 15C whilst Saturday is looking sunny and a high of 26C.

I'd appreciate your input. :)


David said...

Re. off sales at the brewery --
In Franconia, how does the price of off-sales at the brewery compare with the price of similar quality beer at the local supermarket?
In the UK, brewery shops seem to expect to sell their beer at a price closer to that charged in the pub than that charged in the supermarket, e.g. upwards of £3 a bottle, which always strikes me as a rip-off.

Paul Bailey said...

A quick reply to Russ, as his question requires a time-sensitive response. Personally, I would drink the smoked beers on the cooler, cloudier day and go for something lighter, and more refreshing when the weatther warms up. Smoked beer is very good, but I don’t find it quite as thirst quenching as a pilsner or a Helles when the mercury is in the upper twenties.

ETU and Dave, thanks for your comments, I will get back to you both later, as I’m typing this whilst on my lunchbreak, and I’m running out of time.

Russtovich said...

Thanks Paul for the beer advice. That was my thought as well but I figured I'd pick your brain to confirm. :)

I'll be finished helping my wife with her lunch truck runs in about 5 hours, at which time I plan to sit down with my smoked beers for the afternoon (8:43am here right now). The high is expected to be 15C and cloudy with light rain off and on all day. There's also some leftover brie, blue and cheddar from a catering job that I plan to purloin and have with the beer.


paul said...

Round here, I'm a regular visitor to Dark Star and Surrey Hills for draught beer to take away (£2.50 - £3.00 per pint). Hepworths also sell draught from their new brewery.

Bottles do seem to be at regular shop prices, give or take 10-20p.

Paul Bailey said...

ETU, property prices in Franconia seem to be similar to, or even slightly higher than those in southern England. I did a little research on this a few years ago, as I was entertaining moving out there for part of the year, post retirement. That was before “Call me Dave” and his idiotic referendum stunt, put the mochas on that idea.

I’ve no idea what business rates are like in that part of the world though, and it’s all rather irrelevant now.

Russ, I have a rather poor copy of “The Beer Hunter” on DVD, but unfortunately we can’t watch it on Youtube, here in the UK, as Channel Four, who made the series originally, have blocked it on copyright grounds. They have ignored numerous requests to run a repeat of the series, or to make it available commercially as a DVD. This is very poor showing for a public-service broadcaster; in fact the whole thing stinks!

Dave, supermarket prices for beer are pretty low in Germany, and I imagine the same applies to sales at the brewery as well. I paid just over €10 for a six bottle pack of Schlenkerla, at the take-away counter in their central Bamberg pub. This equates to around £1.50 a bottle, depending on exchange rates.

You can get cheaper beer in supermarkets, particularly brands from the Dr. Oetker group, but it’s worth paying extra for a quality beer such as Schlenkerla. Btw, the latter costs just under £2.80 here in the UK, from Beers of Europe, of Kings Lynn.

I agree with the comment made by both you and Paul, that brewery shops in the UK, tend to charge a premium price; although to be fair, far less tax is levied on beer in Germany, compared to the UK.

ETU said...

Thanks Paul that's interesting.

TBH I didn't think that there were many places on the Mainland where property was as inflated as it is in the English Home Counties, so you've taught me something.

I don't think that the rights aspect of Dave's election-gimmick referendum outcome will turn out to be as much of a block, as the relative value of Sterling-paid private and occupational pensions to the euro will, to people thinking of retiring to the EU. I have a feeling that Guy Verhofstadt's provisionally-approved Associate Citizenship idea will indeed crystallise, if for no other reason than to stick it to the spiteful cynics here.

However, friends have already been forced to return because of the exchange rate issue.



Paul Bailey said...

ETU, the Pound to Euro rate is roughly the same today, as it was four weeks ago, when we were in Bamberg. It’s not looking quite so good against the US Dollar, and the US is my intended holiday destination come August.

As I’ve said before, I would definitely take up Associate EU Citizenship, if it is made available.

Joan Villar-i-Martí said...

Nice one, Paul. Thanks for sharing your thoughts on this.

Professor Pie-Tin said...

The Pound/Euro rate has fluctuated like any currency in the years since the euro was launched - the pound has been weaker against sterling than today's rates long before the word Brexit entered the vocabulary.
Anyone whose financial plans to live abroad are based solely on the exchange rate on the day they move deserve little sympathy for such stupidity.
I tend to stock up on currency when I see it move - I horsed a lot of cash into dollars a few years back when the euro wasn't so healthy and tucked them away in my safe - they'll come in handy for the two trips to the States I have planned for this year.
And I did the same with sterling immediately after the Brexit vote.
On the beer front Franconia is on my bucket list along with a road trip around the North-Western USA and the Great Ocean Road in Australia.
Perhaps the reason why German breweries survive is the range they brew - Uk micro-breweries all seem a bit samey.You know,railway arch grapefruit juice produced by poncey bearded types.
Perhaps the UK craft breweries take themselves more seriously and less businesslike than German ones.

The late Anthony Bourdain had some excellent views on craft beer in general.

“I would say that the angriest critiques I get from people about shows are when I’m drinking whatever convenient cold beer is available in a particular place, and not drinking the best beer out there.

You know, I haven’t made the effort to walk down the street 10 blocks to the microbrewery where they’re making some fucking Mumford and Sons IPA. People get all bent about it. But look, I like cold beer. And I like to have a good time.

If you bring me a really good one, a good craft beer, I will enjoy it, and say so. But I’m not gonna analyse it.

I was in San Francisco and I was desperate for a beer, and I walked into this place I thought it was an old bar. And I sat down and I looked up and I noticed there was a wide selection of beers I’d never heard of.

Which is fine. OK, I’m in some sort of brew pub. What’s good? But I looked around: the entire place was filled with people sitting there with five small glasses in front of them, filled with different beers, taking notes.

This is not a bar. This is fucking Invasion of the Body Snatchers. This is wrong. This is not what a bar is about. A bar is to go to to get a little bit buzzed, and pleasantly derange the senses, and have a good time and interact with other people or make bad decisions or feel bad about your life.

It’s not to sit there fucking analysing beer. It’s antithetical.”

Paul Bailey said...

Prof, I never exchange excess foreign currency back into Sterling, when returning from trips abroad, for two simple reasons. First, why gift money to the currency exchanges, as you know they’re going to give you a piss-poor rate on the deal. Second, as you rightly point out, that foreign currency, is going to come in handy some day.

Moving on, a trip to Franconia comes highly recommended, as you’ve probably gathered. North-Western USA also sounds appealing. A transcontinental railroad trip across the North American continent, is on my bucket list, and I’ve been advised to undertake this sooner rather than later, as there’s a distinct possibility the Donald will start cutting AMTRAK’s funding even harder than has been the case to date.

Now I might sound like somewhat of a Philistine here, but until his recent tragic demise, I confess to never having heard of Anthony Bourdain. However, that exert you quoted, about craft beer, hits the nail on the head as far as I am concerned, especially the line about “Invasion of the Body Snatchers.”

ps. I don’t know whether you pick up Tracey Ullman’s latest show “Tracey Breaks the News,” over in Ireland, but there was a brilliant sketch last night about a pest control officer, visiting a house to remove an “infestation of hipsters” from the adjoining property.