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You are here: Home / Breweries / UK Craft Paralleling US Craft Market

UK Craft Paralleling US Craft Market

February 22, 2010 By Jay Brooks

siba
For several years now — maybe a decade? — craft beer has been growing at a faster rate than the older, big breweries. Naturally, they’re so big that even small percentage growth adds up to big dollars while craft beer, for the most part, with a smaller base has far more room to grow. As a result, this has been happening year after year without changing the overall landscape of the American beer market very much. It is changing, but very, very slowly (or at least slower than I’d like).

Perhaps more importantly, this sustained growth in the craft segment while the mainstream market continues to slip suggests a broader trend and what the future might hold, at least eventually. It certainly has worried the big brewers to some extent as they continue to test market micro-like products, niche products, buy into existing craft brewers and other actions calculated to take back some of the market share lost to the craft segment, no matter how small. It’s nothing sinister, just the way corporations operate. Perpetual growth sets the share price, and they must answer to the shareholders when sales goals are not met.

As our economy tanked this trend continued, with growth slowing in both big and small segments of the industry. While beer narrowly upheld its status as “recession-proof,” it did slow somewhat. Big beer went negative while craft continues to grow, but at a slower rate, at least in terms of volume of sales. In dollars, growth remained strong, but mostly because of higher prices. Of course, I also think that craft beer can sustain higher margins than big beer, whose drive to increase volume has seen price wars for decades. That gives craft another advantage, I think, because reaching a sustainable, profitable business model doesn’t have to involve going public, huge growth or answering to shareholders. Anchor Brewery is an excellent example of growing big enough and then sustaining that level while remaining profitable. Anchor has no desire to grow larger, and their future is entirely positive. It’s the opposite of the corporate model, and the one employed by most craft brewers. And I think it bodes well for the future of craft beer.

Today, the Society of Independent Brewers (SIBA) released a report about the state of things in the UK beer market, and there are some interesting parallels between the two markets.

Some key findings:

  • Local brewers achieved a 3.75% increase in volume sales in 2009, while the overall beer market fell 4.2%
  • Three-quarters of all local brewers recorded volume growth in 2009
  • On average, they achieved a 17% increase in sales turnover
  • Pubs continue to close, but local cask ale volumes rise by 1.27%
  • Local bottled beer production up by 16%

The entire report is available as a pdf at the bottom of the article about it in today’s Morning Advertiser. Another interesting stat not mentioned is that 22%, the highest percentage, of independent beer is sold to the consumer directly by the brewery in their shops or via their website. Second was Supermarkets (21%) and third was through independent pubs (19%).

Filed Under: Breweries, Editorial, News Tagged With: Big Brewers, Business, Statistics, UK



Comments

  1. michael reinhardt says

    February 23, 2010 at 3:12 pm

    Good stuff. While I really enjoy bitters, they were all over the place when I went this summer. I found some strong ales, milds, stouts and the like. The most interesting thing I found was at this place called the Rake. Stone’s Russian Imperial Stout was on tap. I was hoping to be more surprise by British brews so it’s nice to know things are looking up.

  2. Charles_Taptu says

    February 24, 2010 at 3:10 pm

    The Rake is a shining light of beer choice in the UK – they regularly have an excellent selection of US, European and UK ales including stuff from Wales and Scotland. In fact I think they have a Welsh beer festival coming up.

    Great post – will have to check out the report – I really hope this trend means more choice in your standard pub in the future.

    • J says

      February 24, 2010 at 4:08 pm

      Charles, I quite agree. I’ve been in the Rake several times and love it. I’ve also had more than a few drinks with the owners here in the States, too. They’re doing great work bringing American craft beer to your side of the pond.

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