Chaos in the bottle shops

Specialist craft beer retailers have likened placing orders for the latest beers from certain big-name breweries to the scramble to secure Glastonbury tickets, amid concerns that parts of the wholesale market are becoming overheated.

“Anything DIPA or hazy goes really fast,” says Dan Sandy, manager of east London craft beer store Kill The Cat. Beers from Cloudwater, Verdant and Deya are subject to fierce competition because they will draw in customers and drive sales of other beers once people are through the shop door.

“Everyone wants Deya cans but it’s not making very many,” says Jen Ferguson, co-owner of Hop Burns & Black, a craft beer retailer in south east London. “The number of Deya cans making it through to the distributors is very small.” 

Another example is Nottingham brewery Neon Raptor. Alex Fitzpatrick, co-owner of Brixton bottle shop Ghost Whale, found its beers became hard to get hold of seemingly overnight. “What happened? Who pressed the button that gave it this magic rainbow aura around everything it does?”

With social media driving customers’ expectations, the pressure on shop managers to secure popular, limited-release beers has grown intense. At the same time, emails from distributors with the latest beer releases have grown more frequent but less predictable. When they do arrive, sought-after beers sell out within seconds. “In a short space of time it’s gone from manageable and structured to chaos,” says Sandy. “It’s really chaos. I have missed out on beers because I’d literally been away from my computer stacking some shelves. I am often afraid to go to the toilet, to leave my laptop for just five minutes.”

But social media use cuts both ways, with savvy bottle shop managers watching the feeds every bit as closely as their customers. When breweries post about forthcoming beers, that can be a signal to mark the expected release date in your calendar so you can be ready for the “fastest fingers first” competition when the list drops. Or, if you have the clout, to send pre-order emails to distributors without even waiting for the list to arrive.

One common strategy to circumvent all of this is to buy your beer in person. With delivery taken out of the equation, brewers are often happy to sell smaller quantities than they would otherwise. Some shops take this even further. At Ghost Whale Fitzpatrick uses taxis to courier beers from one brewery outside London to his shop on an almost weekly basis. “That’s mildly insane,” he says, “but it’s only because we know we can sell it all quickly – and quite a lot of it – that we can justify that.”

Underhand measures

Some buyers are driven to underhand measures to secure hyped beers for their shops. “I know there’s a lot of jiggery-pokery that goes on,” says Sandy. “It’s a dog-eat-dog world in the craft beer scene.”

Stories of retailers buying beers from other shops to resell in their own establishments are common. This can even stray across borders. “I’ve certainly heard of bottle shops ordering from European websites,” says Ferguson. “I know someone up the road was doing grey market beer imports. Obviously HMRC wouldn’t take a kind view of that.”

Perhaps the most extreme rumour was that workers in Ghost Whale had coded a software bot to automatically place orders for new Verdant beers when they were released. It turned out to be untrue. “The utter irony of this is that I’m the least technological person I know,” says Fitzpatrick. Instead he relies on research and diligence to score the beers his customers want.

“I’ve just got an alarm set when I know certain distributors’ lists are going to come out. Then I sit on their website typing in things like Cloudwater or Verdant and press refresh until something comes up. There’s no secret. Everyone else is equally welcome to do that.”

But it almost doesn’t matter whether the rumour is true or not. What’s really telling is that competition in the sector has reached a level where such a rumour could arise in the first place.

Inflated prices

Such heightened demand inevitably affects price. There have been occasions when retailers have seen beer sold direct from a brewer at one price, selling out within minutes, and then being offered by distributors at £20 or £30 more per case.

“I understand the distributor has to make money,” says Fitzpatrick. “Of course, they’re a business in themselves. I get it. But at the same time I would have thought it would have been up to the distributor to negotiate a bulk discount with the brewery.”

In these cases retailers must choose between two unpalatable options: to sell the beer at an uncompetitive price or to sell it at a much lower margin. Neither is good for business.

Fitzpatrick recalls a supplier’s recent listing for a 7% IPA in 44cl cans. The beer was not imported, nor did it contain any additional ingredients that might have made it more expensive. But it was priced such that with his regular mark-up he would have had to ask punters to shell out nearly £10 for it.

“You can argue the consumer suffers, but actually everyone along the chain suffers if that trend continues much further,” says Fitzpatrick. “We ride that train because it’s good for business,” he says, “but at the same time we’re conscious of wanting to make a sustainable model, not just for ourselves but for craft beer as a whole.”

Much is made of the beer industry’s efforts to make itself accessible to all and open up to a wider customer base beyond affluent young city-dwellers. But the hype and high prices seen in some parts of the craft beer market work very much against those aims.

“I’ve got no real desire to push along this hype bubble, because the only thing it can lead to is people getting sick of craft beer,” says Fitzpatrick. “At some point it will create a serious backlash.”  

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