As I write this, we’re about to celebrate our ninth anniversary. Craft beer shop years are like dog years, so it’s safe to say we’ve seen some things – the rise of craft beer in the UK, a pandemic, a cost-of-living crisis and… let’s not say the fall of craft beer in the UK, but certainly what City types might call “a correction to the market”.
This year has already seen the closure of dozens of UK independent breweries and still they keep coming. While craft beer isn’t over, the boom definitely is. Craft beer isn’t the hip new craze anymore, and consumers face higher costs across the board, with less money left over for “luxury” items. Drinkers who were happy to spend their disposable income on hyped hazy IPAs in 2019 may think twice about doing the same in 2023, when the same beer can cost up to 80% more, due to breweries’ hugely increased production costs.
Daniel Tapper launched Beak Brewery in Lewes in 2020 and works directly with a large network of independent stockists. He says he’s noticed more of these businesses buying based on price, as retailers try to maintain margins in the face of rising costs. Ruth Mitchell, managing director of Wokingham’s Elusive Brew, adds: “If it’s not a popular style such as pale ale, IPA or stout, trade customers are more restrained – they’re not willing to take the same chances on a different style if they can’t guarantee it will sell.”
It’s also fair to say the craft beer demographic is ageing, and not being replaced by a younger generation, who are less interested in drinking than ever before. We saw a perfect example of this recently, when a group of four of our top-spending customers from 2019 returned for the first time in a few years. They’d since got married, had kids and moved away in order to afford to buy a house. The pressures of young families and mortgages means their one-time craft beer obsession is now a low priority.
This means there are fewer craft beer drinkers, and they’re drinking less, and differently. Talking with fellow retailer Jules Gray, founder of Hop Hideout in Sheffield, we reminisced about the old days of craft beer bun fights, when retailers would be scrambling to get their hands on the latest hyped beer, with never enough to go around. These same beers can now often be spotted on brewery and wholesaler lists with short dates, discounted to clear.
What does this mean for craft beer retailers? Put simply, takeaway beer sales alone probably aren’t going to cut it.
Pre-pandemic, in 2019, beer sales made up nearly 70% of our revenue. Now, in 2023, they make up just 46%. Our customers are buying less beer, but they’re also probably finding other places to buy it from, such as supermarkets or direct from the breweries themselves. (Daniel Tapper says around 25% of Beak’s sales now come from its taproom or web shop.)
But it’s not all doom and gloom for retailers – at least, those with a diverse offering. Despite beer sales being down, Hop Burns & Black is doing better than ever, due to the growth of other parts of our business – in our case, the demand for natural wine and hot sauce, and the addition of our coffee hatch, which we launched in 2020. Up in Sheffield, Jules says while beer takeout sales are down, drinking in and events and experiences are driving people to her venue – and she’s also seen a 120% increase in cider sales since pre-pandemic.
One positive to come out of the pandemic was a renewed appreciation for local businesses. While price pressures unavoidably play a part, there’s a keen desire from drinkers to continue to support their locals where they can, so anything retailers can do to boost their reputation as a community hub is invaluable. Enticing people out of the house through events, offering local delivery services, going above and beyond on customer service – all of this reminds customers why they love to shop with you.
Craft beer’s not dead, but whether a retailer or a brewer, we all have to work that bit harder for every sale.