Tuesday, 17 February 2009

Diversification

We've all heard about the drop in beer sales and the even bigger drop of beer sales in on-licence premises. I include here the latest chart made using data from the BBPA site. If I've done everything right you should be able to click on the image to get a full sized view of the chart.

Let me know if it didn't work.





Really, this is old news. The red line, showing sales in pubs and other places licensed to sell beer for consumption on the premises is getting close to the green line which is off licence sales. The total amount, the blue line, is falling more slowly.

The UK has a population of 58 million. We drink between us about 30 million barrels of beer a year. That's just a tad less than 1/2 a barrel a year each. or 144 pints a year or less than 3 pints each a week. I'm more than doing my share then. The average person consumes not much more than a pint of beer in a pub a week.

What of course is alarming is that the drop of beer sales for pubs is around 1/3. This represents a drop of revenue, for which there is little I suspect we can do. The most common recommended course of action for the licensee is to look into diversification. This does have certain merits for some establishments.

What I really want to explore though, is the misguided concept that it's as simple as that. Diversification also represents increased complexity. Simple and complex are diametrically opposing concepts.

We have a diversified business. We have accommodation, we do food, we brew beer and we sell maps and books. This level of diversification results in a complexity of business that is difficult to sustain. I think I shall just bullet point the main problems with this.

  • A business that is operational 7am - 1am, with potential problems 24 hours per day.
  • Residents check in at the times the bar and kitchen are busy.
  • Bookings enquiries for rooms normally occur in the evening, when we are busy with customers.
  • The kitchen is in use all day, making maintenance difficult.
  • The number of products we buy make the accounts tiresome for the turnover value.
  • I have to do my beer duty, which is normally late, and I don't get around to invoicing for CAMRA festivals.
  • I have to beat off beer label collectors with a big stick.
  • A small pub is a very tying business for the owners. A more diverse one is even harder to leave in the hands of staff.

Diversification is not a simple as it seems.

There are other things I end up doing as a result of our brewing diversification. Showing people the brewery and talking about how it is made, for example. The fact of the matter is I enjoy this aspect, so I shan't complain.

6 comments:

Brewers Union Local 180 said...

"The average person consumes not much more than a pint of beer in a pub a week."

It's nice to be above average for once.

Tim said...

Hi Dave, whilst the day to day chores may seem to make life difficult, at least you are passionate about what you are doing.

Woolpack Dave said...

You see Ted, everybody has a special skill, you just have to look for it.

I'm waiting for downhill Jeep Tobogganing to become a national sport. I think I might be quite good at that.

Tim, it's nice to know that the passion comes across. I do wonder if we care too much sometimes.

John said...

From what I tasted last summer you brew a quality pint too!

Woolpack Dave said...

Thanks John, that's high praise from a champion, TV famed, brewer.

Woolpack Dave said...

And now, we hold weddings.