Tuesday, 17 September 2013

Hardknott in Sainsbury’s


Last week was the launch of the in-store round of the Sainsbury’s Great British Beer Hunt. We have been successful in getting Infra Red to this stage. This involves us shipping 19,9921 bottles to the central depot for onward distribution to over 400 stores by Sainsbury’s own logistics.

Infra Red is not a beer that we sell a lot of in draught formats. Much of our output of this beer is in bottle. Indeed, in stark contrast to draught sales, it is the case that it appears there is a sweet spot for bottle beers in the 5%-7% range based on the demand we see. 4% beers, at least for us, sell in lower volumes in bottle.

I believe there are several factors that might improve our chances of getting though to the final, but for certain strong sales will help. If you would like to see more Hardknott in future then buying our beer from this scheme will help.

It seems appropriate for me to comment on the issue of supermarkets and their approach to selling beer. I’m sure some of you will be thinking that we’re selling out. I’ve seen comments on twitter and elsewhere regarding the fact that the breweries are being screwed and that it’s just a loss leader exercise.

What I can say with complete confidence is that the price charged by the supermarket, at least in this instance, is at an appropriate mark-up. We knew the price we’d be paid for our product well in advance and could make the appropriate commercial decision. The volume of beer delivered for this contract represents more than the total sales for the whole of January this year. Furthermore, all we had to do was take the bottles off the line, pack in boxes, onto pallets and out the door. Less than 24 hours from tank to lorry. 12 pallets of beer in 2 shipments three weeks apart. Save for the stress of meeting the deadlines, and a couple of long bottling shifts, it was a breeze.

We love the rest of our customer base too. We like having a variety of beers, we’d get bored otherwise. However, it can be a real logistics problem making sure we have the right beers in stock, in the right packaging and ready to ship. Every week Graeme, my production brewer, hassles me for a brew plan. I have to refer him to Ann who can try and guess what people are going to order in two or three weeks time. We never guess right. Almost always we have too little of this, and too much of that. Last time we did a stock take we had over £20k of beer stock, just to be able to keep enough on stock for potential orders.

If I only had Sainsbury’s as a customer I would not need to keep £20k of beer in stock and could operate a leaner just-in-time business. I would then have £20k more in the bank, or at least, owe the bank £20k less.

The exercise has made me realize that supermarkets are not loss leading, they are doing deals with breweries to shift volume. The loser may well be the pub, and this is unfortunate. But you can’t buy Continuum, or Azimuth, or Queboid, or even Katalyst in Sainsbury’s. At least not yet. I expect that if they take on any of these beers we may well invent something else exclusive for the on-trade, it’s not really that tricky.

Supermarkets give a very powerful and cost effective way of getting our beers to the people who want to drink them. It helps us get our beers to people who can’t normally get them. It helps get beers to people who might not be able to get to pubs as often as they like, perhaps because they have young children, or live somewhere where it’s a car drive to the nearest decent pub.

Obviously I’d like to get through to the next round of the competition, where we supply for a 6 month period, at a price that is slightly better. The bad news for you guys is that the price on the shelf will likely go up.

However, if we don’t succeed in this round, and to be fair the odds are against us, we’ll look elsewhere for similar volumes. After all, we have staff wages to pay and a bottling line that needs using to be worth having.

Meanwhile, be pleased that Infra Red is available at a really knock-down price, take advantage and fill your shopping trolley.

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120,000 doesn't divide by the supply size of cases of 12.

4 comments:

Brewers Union Local 180 said...

How much is that bottling machine cranking out these days?

RedNev said...

Right, Dave, that does it. You've managed to persuade me to go to Sainsbury's!

Best of luck with this.

Anonymous said...

How cheap is it ?

Yvan Seth said...

"How cheap is it ?"

£1.50 per bottle (330ml).

Really rather a good deal :) Typically a bottle of IR will retail for £2 or more. I drank the bottles I bought already... might have to make another Sainsbury's trip. [Need to overcome my natural revulsion of supermarkets to do so...]