The Brewer's Journal have revealed that, according to their figures, in 2020 the total number of UK breweries increased to an impressive 3,000, an uplift of 7.5% on 2019. I posted about this on both Twitter and LinkedIn earlier this week.
At any other time, I'd be celebrating this exciting milestone, but as this isn't any other time, I'm approaching this with caution. Here are some reality checks as to why, and my thoughts on how breweries can come out of this on the other side.
According to a report, 12,000 hospitality venues have closed permanently in the last 12 months with, ominously, more expected to follow. This week, The British Beer and Pub Association (BBPA) claimed that 2,000 pubs have been lost forever. That's a lot less venues for an increased number of breweries to try and sell beers to.
As we move through the re-opening roadmap in the UK, remaining hospitality venues will be able to gradually open up, with all limits currently scheduled to be lifted by 21st June. However, I expect like we saw last Summer, people won't be immediately rushing back to the pubs in numbers like we had before the pandemic, which means many publicans will opt for a "safe" and perhaps limited draught beer range. This means guest bar space for micro-breweries will be restricted for a while.
In separate conversations with some of Leeds' smaller brewery owners, they are already feeling squeezed out of bottle shops as more breweries compete for shelf space. This includes larger regional breweries who perhaps weren't so bothered before.
An interesting twist on the number of new breweries opening is that some are being run part-time, where owners and some employees have personal income from elsewhere. It's a different kind of challenge for the full-time owners who will feel more personal financial pressure as well as the trading difficulties. Of the 29 Leeds breweries listed on my website, I reckon at least 6 are currently part-time.
My fear is, that although we have 3,000 breweries now, we will see many closures in the coming 12 months.
So, how can breweries survive? I believe breweries that have excellent sales and marketing with on-site taprooms and/or a number of pubs under their wing, are in the strongest position. If I were able to offer my thoughts to breweries, here's what I'd say.
Trying to sell beer will not be like it was before the pandemic. Keep your options open rather than just trying to do what you did before. Do not knee jerk into cutting the price of your product if early sales aren't going so well, it'll create bigger problems later on.
You did an amazing job with customers during the pandemic. From home deliveries to online events, community support and charity fundraising, it's created a lot of goodwill amongst people and won't be forgotten.
Don't get over excited too early by a small increase in sales as things open up, it'll be a while before you see the money coming in to run at full tilt. Leave the BMW and personalised number plate alone.
DON'T PANIC! You're still running an amazing beer business even after 12 months of very slow trade and little Government support during a global crisis. If you can run a business through that, you can do anything. You've got this!
Good times will come again, of that I'm certain. New people will launch new hospitality businesses and, when everyone is confident in coming out again, I think the next decade could be a strong one for our industry.