Thursday, 19 November 2015

Do we HAVE to produce cask beer?

Way back in 2005, when we first started brewing, 100% of our beer was cask. In the first 5 years of the life of Hardknott the percentage remained in the high 90% range. We had a tiny amount contract bottled and hand bottled a little bit ourselves. We experimented with the odd keg.

When we moved to our current location in 2010 we knew we wanted to explore other formats. Bottle was a high priority1 and keg was a very close second. However, the vast majority was cask beer, and that was the way it stayed until we finally bought our bottling line.

I'm doing some fairly intensive business development thinking right now. We've built a great team, made huge progress, but the financial success of Hardknott in any sort of meaningful way needs a good move forward.

I've been looking at some sales statistics. Sales of cask is standing just about steady. Stagnating, in fact. Cask is dominated by a plethora of breweries many of whom are competing on price alone. This means turning the stuff around with little time in tank, no dry hopping, minimal hops in any case. And to some extent if that is their thing, turn it out cheap, 'cause actually, cheap low-taste beer is what the majority of pubs can sell easily.

We don't want to make low-taste beer. We don't want to make stuff to the lowest budget we can. We want to make stuff that makes a statement, makers a difference, turns heads. We use more hops, dry hop most beers, and it stays in tank a little longer, because Scott refuses to claim it to be ready until he is happy2. It costs a little more to do and we unashamedly charge a little more than many breweries.

What we've found is that our bottle and keg production has been our solid growth area. We now produce less than 25% cask. It isn't that we put less beer in cask, we have just grown the other areas. Most of what we package is in bottle. This is a good situation from a business point of view. To justify the space the bottling line occupies, to pay down the loan we still have on the machine, we need to make it work hard.

Putting beer into keg at the same time we bottle is easy. We like doing that and is generally what we do for Azimuth for sure, which sells very well in both formats.

Cask is becoming more and more of a chore, and makes less and less business sense. There is frankly a huge surplus of rubbish cask producers, and equally a good number of great cask producers. Competing on price, maintaining quality, in an area that is becoming a marginal activity, isn't going to replace my shoe leather. Running so many different beers in several different packaging is becoming difficult to manage and something might have to give.

But, I'm happy to sell beer in whatever format makes commercial sense. If I can empty a full tank into cask and sell it in a week, then I will3. But more and more now we're trying to shoehorn cask production into what space we can find in the schedule, exacerbated by the fact that we are very close to absolute maximum production we can achieve with the equipment we've got.

I noticed a blogpost by Tandleman back in August regarding a brewery that announced the cessation of cask production. I can understand his frustration at the brewery's announcement. Stopping cask production does then result in a failure of the beers to appear in cask-only outlets. But it might be obvious to the reader that I can see the point of view - every business owner has a primary responsibility to make decisions for the good of the business.

I was however a bit taken aback by Tandleman's "that raises two fingers to those that have loyally supped Buxton beers on handpump these last years" comment. That one has sort of lingered in the back of my mind. Surely, if cask were supported with enough strength, breweries would not make such decisions?

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1And if we started again today it would be cans, all the way, but we are where we are for the time being.

2Which in itself causes us problems. We try to guess when beer will be ready to rack. We send out availability lists to pubs and distributors at the beginning of the week, and to provide the range we want to show, sometimes beers might not be quite there. Ann then makes sales and issues racking orders. "[So and so] want it by Friday, and we need to send out Wednesday, which is tomorrow, is it ready to rack?"

The sale might not be made until Tuesday, but it is still in tank, it is brewday and the mashtun is still to dig out. A look at the beer shows it isn't quite ready, and then a tank for today's brew needs to be cleaned. The beer might get racked tomorrow, if we get enough casks cleaned, but then there will be the pallet to build, and we might miss the window to call in the haulier. It could go out Thursday, but then we'd have to pay for next day delivery, putting up the delivery cost, which we absorb. Besides, the beer will be ready when it is ready "Ask them if Monday is OK" and generally the reply is that no, they need it this week or not at all.

3A full tank is more than two full pallets of casks. Most of our distributors only take one pallet at a time, and that is generally a mixed pallet. It means to carry on making sense, and for us to carry on making cask, we need you, the cask fan, to drink Hardknott, demand Hardknott, that way we'll get more demand this end, and everyone will be happy.

22 comments:

Phil said...

Surely, if cask were supported with enough strength, breweries would not make such decisions?

You're assuming that Buxton have the best of intentions, from a cask drinker's point of view, & only got out of cask because they had to (or wanted to stop losing money) - not because they chose to (or wanted to make more money). But that's exactly what we don't know.

Dave Bailey said...

I'm a bit confused about your point Phil. Why would Buxton, when running a business, have the best intentions from a cask drinkers point of view? Their intentions are to try to run their business as a going concern, ensure that the wolf is kept from the door, pay all the appropriate taxes, pay the staff, pay down their bank loans, which I expect they have etc.

If for them cask didn't make much commercial sense, in whatever way they saw that, then surely they have no reason to keep producing cask?

Rob Nicholson said...

This does somewhat backup a feeling around these parts that we're in, or soon will be, an oversupply situation with increasing tales of beer being sold as a loss or certainly not at a commercially viable price. It was linked in with discussions about the price of cask.

Dave Bailey said...

Rob, I think there certainly is an oversupply of cheap, tasteless beer. I suspect there is still room for really great well made stunning and exciting beer.

Up the quality and interest in the beer, that's the way to stay on top - at least I hope so!!

Curmudgeon said...

Continuing to produce cask gets you a lot of free publicity and recognition, even if it's not your main product. If you don't, you're just relegated to "No cask beer" in the breweries section of the Good Beer Guide.

If BrewDog had continued to produce even a token amount of cask, they would be widely lauded in CAMRA and would probably get several of their bars into the book. Punk IPA could be wonderful on cask.

Mark said...

Whilst I totally agree about the oversupply of mediocre and poor cask ales, mostly it has to be said from micros, I suspect this constant harping on about cheap tasteless beers is aimed at exactly the kind of beers I like to spend an afternoon drinking as an accompaniment to...whatever. I like all kinds of beer but one of the reasons I very quickly tired of trips to Belgium in the 90's was that after a day or two of drinking high abv sippers, I longed for a pint of Mild. Or Bass. Or anything brewed to be enjoyed by the pint. Upping quality is one thing, but not at the expense of session beers please.

Benjamin Nunn said...

"Cask is dominated by a plethora of breweries many of whom are competing on price alone."

Which is EXACTLY why we need *good* cask beer from *good* breweries more than ever.

I've argued for years now that the combination of tasty, interesting keg beers on the market and the plethora of bland, boring cask beers is a bigger threat to everything we (or at least I) care about.

CAMRA's complacency and hand-sitting doesn't help - we're only a few key decisions from breweries away from a world where one has to choose between good beer and cask beer.

And that's not the world our forefathers fought for.

Stonch Beer said...

I fear what you call "rubbish cask producers" are just the people who are making beer that nice, normal people want to drink and enjoy in nice, normal pubs.

But no matter. Dave, you don't beed to agonise about any of this if your revised business plan makes sense: if the extreme beers in bottle and keg make you the money, and the cask's a waste of time, then do this. There's clearly an already well developed market for the strong and hoppy stuff.

However - if it doesn't work out, then don't blame big breweries, or the Portman group, or pubs with dodgy cellars, or anything like that.

Dave Bailey said...

Mudgy, I certainly understand the overall aspect of publicity associated with beer being available in some places. I'm not sure about the benefit of being listed in a papery thing mind.

The BrewDog example is certainly not a good example, from a business point of view, of continuing to produce cask.

There are some pun groups that positively try to convince breweries of the advantage of selling them cask below cost to got exposure. I try to take every case on it's merrit, but remain sceptical.

Dave Bailey said...

Interesting comments here. I think I can summarise my repose fairly easily. Hardknott has always set about to be different. We think it is important. We do make quite a lot of "session beer" which gets out and about. Of course, what you determine as sessionable beer varies between person to person. I quite like a few twofers of Azimuth. In my mind this great IPA at 5.8% certainly isn't "extreme" by the standards of many. I can quite easily have a "session" on a 5.8% beer by simply taking my time, enjoying and not being daft.

I don't want a beer industry that makes a lot of beer that is barely discernible from the next beer.

As for "blaming" anyone for however my business goes, I think it is my right here, and anywhere else I might write, to point out how we are different to other producers that influence the market. It is a way of pointing out our uniqueness. It is generally directed at the people who I know like what we do, it is a way of getting to the audience we know is out there, and possibly not at my critiques.

This is all a way of communicating with the people who may actually like something that is different. It is OK to enjoy a beer that is barely different to the last beer you tried. Of course it is, if that is what you want to do. But I know there are a lot of beer drinkers go into a pub, look along the line-up and think "oh dear" - Do they not deserve to be satisfied too?

Rob Nicholson said...

>I don't want a beer industry that makes a lot of beer that is barely discernible from the next beer: hmm, this is an interesting one IMO. I don't mind lots of indistinguishable beer as long as it's from local breweries. I suppose I'm saying I prefer local to regional or national. So my local sandwich shop sells cheese sandwiches. Unlikely they are distinguishable from a cheese sandwich in Congleton. But the important thing is that it's local. Does that make any sense?

Dave Bailey said...

Well Rob, it makes sense, at least to a point. But in what way is the cheese sandwich local? Was the cheese and bread both made locally, or are you just talking about the assembly of said cheese sandwich, in which case it is more about how the final service is conducted, which of course is a local sandwich shop.

Now, there are very good artisanal sandwich shops, and they can make some stunning cheese sandwiches. They are almost never the same as a cheese sandwich from another good sandwich shop. The bread is probably baked locally, perhaps even on the premises.

The best cheeses may or may not be local. And if it is the general factory manufactured cheese, that sandwich shops buy in industrial bricks, it will certainly not be local.

But there is a difference. Cheese sandwiches need to be made the very same day as consumption to taste acceptable. There are some national producers of cheese sandwiches, and their products are fairly universally rubbish compared to great locally baked bread products filled with great crafted cheese.

Beer, however, will keep for a few weeks quite satisfactorily. It can be transported very well, as can great cheese. Whilst I accept a local provenance is important, I'd argue why bother if there isn't something in the taste that makes it stand out head and shoulders above other offerings?

Local breweries is a nice cuddly concept, and an important part of the beer industry. But why is it important if the beer is no different, and possibly of poor constancy? It will probably be made in a small brewery, with poor energy efficiency, and overriding any advantage of the low carbon footprint of the local delivery.

If a cheese sandwich is indistinguishable in your local sandwich shop compared to one in Congleton then is it really a great sandwich shop?

Is beer just a commodity that is just a means to an end and you can feel good about drinking it because it is local, rather than caring about how good it tastes?

Adrian Tierney-Jones said...

Do what you like it's your business

Mark said...

Your idea idea of a 'sesionable' beer is I fear very different to mine. Thing is, I strongly suspect it's also very different to the vast majority of beer drinkers.

Dave Bailey said...

Mark, that vast majority of beer drinker prefer something like a mass produced lager. Have a look at the BBPA statistical handbook. It says that in 2014 74.8% of beer sales in the UK was lager.

Azimuth sales make up around 50% of our sales.

We aim to please a certain beer drinker. I believe we do that quite well.

Anything is sessionable if you you are sensible. Criky, I've known people to stay quite sensible on a 14% rancid grape juice all night. I also know some people who sip away on single malts all night. Not sure what ABV by itself determines the effect, it's the drinkers ability to take care with his pace whilst drinking, really.

Real Ale Up North said...

You know your strengths. You play to them. You have an understanding of present market demand. So you aim the type of brand that satisfies that market. It makes financial and business sense.

Mark said...

I consider a sessionable beer as one you can have a session on. By which I mean several pints, maybe five during a sports match, three or four Sunday lunchtime before lunch. I like drinking quite a lot of beer, but don't particularly enjoy getting drunk. I like the 'feeling' of drinking a lot of beer in the company of others who do the same, but not getting too drunk. That's what I regard as a 'session', and the ideal occasion for a 'session beer'. I think a lot of people feel the same way, regardless of what they're actually drinking. It's why I prefer to drink quite a lot of a dark low abv Mild when out with friends rather than sipping my way through a few halves of taste-bud manglers. It's also why as a cider drinker I very rarely drink the stuff at the pub, it's not conducive to session drinking. A 5.8% beer is no more a 'session beer' in my view (and many others I'd imagine) than a 14% Shiraz is. Plough your own furrow, I've every admiration for those that do, but perhaps it's best done with your eyes wide open to the fact that not everyone you'd like to sell beer to could care less about 'your' obsession. The vast majority of cask drinker I meet, ie. the ones who ain't beer geeks, just want to drink the stuff, not spend all night sipping and talking about it. Or to put it another way, if you choose to supply to a niche market, don't be so surprised when sales remain niche...

Yvan Seth said...

Growth... market growth galore in "craft keg" right now. But no significant growth in cask, and cask market focussed more on cheap/local than anything else really. For the most part, as a generalisation - otherwise I'd not be selling any cask at all. (I've come close to ditching it so often... but persist, because it's good and IMO dropping it would be an affront to my own ideals of diversity in beer.)

Of course everyone is looking at doing keg right now. So soon enough that market will probably be as much a saturated bunfight as cask. Hell, look at cans... a lot of canned crap happening at the moment.

Anyway - the key is brand/recognition building. Buxton, Magic Rock, Kernel, Beavertown, Siren - etc - have two things: top beer & top brand/sales. Doesn't really matter what you're putting your beer in beyond that.

Mind you - if your cask ale and the brand to go with it is indistinguishable from the next brown bitter then you'll probably not make any money out of it. Someone else will always be able to make it and sell it cheaper. It's a race to the bottom as markets go. People seem to be doing well out of putting any old shit in keg or can right now... I'd say we're in a bit of a "quality holiday".

If we were catering to a "majority" of beer drinkers we'd all be selling something like carling. Several "craft brewery" types are doing exactly that with some success of course!

(I started distrib close to 100% cask - now that's maybe 40% cask in a good week for cask, but some weeks are close to 100% keg.)

Tandleman said...

I've thought about it. Basically what Jeff says and what Real Ale up North says.

But it would be a shame if you gave up cask. Like Buxton you are actually quite good at it and leaving the market for those who aren't as good would be a bad thing, which I suspect is what you already think.

Up to you in the end.

Dave Bailey said...

Thanks Tandy, I particularly like the bit that says "Like Buxton you are actually quite good at it and leaving the market for those who aren't as good would be a bad thing"

In the end making a decent living, not any sort of killing, but just a decent living, is all we want. If we had to ditch cask to achieve that, then we might have to. But if we think we can use cask as part of a route to market then we will continue to do so.

Where there is doubt, encouragement like you've just given might just tip the balance.

Rob said...

What do you actually like making? And drinking? If you're not that fussed about cask then I guess it doesn't matter if that side drops away. But if you do enjoy beer on cask then I would have thought you would try and see what you can do to keep it going.

Of course the business comes first though. In my line of work we try and do stuff we enjoy, with people we like. Sometimes we have to do stuff we don't particularly like to make ends meet. And sometimes we can't do what we'd like because it wouldn't pay. But we still look to that ideal and adapt the business accordingly.

Dave Bailey said...

Rob, this of course is an important point. I enjoy good beer, served consistently. I love Azimuth on keg, I enjoy seeing it doing well out there. On cask the sales volume can be slightly below optimum for it being great. Whether there is a bias that makes people who love, it love it more because they like the slight increase of carbonation, or a predisposed to keg anyway, I'm not sure about.

But then, perhaps if a beer keeps better on keg, and the hop aroma vibrancy that we work hard to get into it sticks around, and so is more consistent and enjoyable, it sells better.

Whichever, it is from a brewers point of view always disappointing when one's beer doesn't shine as well as it can. This is for sure a definite disappointment for cask in many cases.

However, what I want is for more people to enjoy my beer. This is what really floats my boat, what gets me out of bed in the morning, the thrill of hearing that people enjoy my beer. So, if that means continuing doing cask, to get more people drinking and enjoying my beer, then so long as it pays, I will always continue to put beer in cask.

But I have to remain vigilant and as soon as it doesn't look great either from a beer quality point of view, or a commercially sensible point of view, I shall reserve the right to change my mind. Or even, if I can't make enough beer to satisfy all formats.