Cash-flow

I'll be honest, this is an open and honest plea.

Beer is a low margin business.

A low margin business is one that might have a high turnover, might do lots of potentially profitable trade, but where the costs to profit ratio is quite poor; You have to sell lots of beer, take a lot of money, and turn it all around very quickly, if you stand any chance of making an honest living.

Of course, if you are a big brand which is wanted in a pub, you can demand that supply is only guaranteed provided the bills are paid, or that they are paid by direct debit. Unpaid bills or bounced direct debits are rewarded by the account being put on stop. No more bland mass produced lager for you, mate.

Even more secure is to operate the tied pub model.

In the microbrewery industry it is important to take the business you can. But taking that business can lead to difficulties. I don't like to say to the very well meaning pub manager who really wants to stock my beer "I'd deliver, but your head office hasn't paid the last two invoices"

Nearly everyone pays in the end. Even the one who was 10 months late and we thought we were going to have to take to court, paid in the end, although the distasteful joke made at the time left a bad taste that will ensure lasting memories.

But consider the readers salary. Consider that to make a reasonable living we would have to turn over at least 10 times our expected salary. Consider you, the reader, and whatever salary, income or other financial input you get. Consider that you might consistently be owed about 25% of the yearly payments due to you. How would you feel about that? How much would it cost you in interest?

Consider that we have 10 times that in monies owed to us.

We generally deliver beer having already paid ¹ for the hops, malt, bottles, labels, cask finance charges, van HP, tank capex loans, cleaning chemicals, wages ² and many, many other costs. Not too long after delivery we have to pay - we HAVE to pay - the beer duty.

Many pubs and bars pay cash on delivery. We love you very much indeed. A large proportion pay within 30 days. We love you by an amount that is imperceivably less than the aforementioned pubs. If everyone paid within 30 days I would not be writing this post. Paying within 30 days, or even a little bit longer, is how most businesses work. We're all in the same boat and we understand.

There are some bars who take delivery, take the money off the drinker, bank it, let us pay all the costs and still don't pay for the beer after over 60 days. If all our customers did that we would be out of business.

As it is, these bars and pubs are preventing us from growing our business.

You know who you are.

We know it's tough out there and we are all in the same boat. Money is tight for all of us and when you are in business you have to manage that cash flow as best you can. I'm sure pubs and bars have problems too, remember, we've been there too.

You could help us out here.

If you are a drinker, make sure your favourite bar or pub knows you want our beer stocked. That way we can put more pressure on these bars to pay their bills on time. A reason why it's not stocked might be because we've decided not to supply due to non-payment.

If you are one of our well-meaning bar manager customers who are at the mercy of some head office bean counter then please communicate to them that they are damaging the craft beer scene by delaying payment inappropriately.

If you are an aforementioned bean counter and are reading this then I'm very surprised, because frankly, I didn't think you cared about decent beer. But then, I suspect I'm right on this one, and you are probably not reading this.

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¹or at least have our suppliers breathing heavily down our necks threatening to stop us brewing because we haven't paid. If you're reading, Mr Supplier, we love you more than you know for being as tolerant as you are.

²Sorry Alex, I know that might not be quite true, but we love you even more.

Leaning towards extreme

Hardknott for the faint hearted?

I can never claim to have led an ordinary life. Sunday, for instance, is not about washing the car or cutting the lawns. OK, sometimes it is, but only because it is well past needing to be done and I've not been able to squeeze those essential, but tiresomely boring jobs into my schedule at any other spare time.

An ideal Sunday for me would be something that raises the pulse rate a little¹ and might involve a little bit of outdoor sport with an element of adrenalin. Climbing is my most favourite pass-time, when I get a chance. Rock climbing in the summer and snow and ice climbing in the winter. Sadly, since leaving regular employment just over 8 years ago, the time consumed in the pursuit of a reasonable level of income from being self employed seems to have rather limited my time available for pure pleasure.

My approach to beer is somewhat similar to other aspects of my life; anything but mainstream. I could probably sell more beer if I concentrated on making low cost pale session bitter. My view is that Hardknott is about something different, something challenging, and something that sets the pulse racing. It's not for everyone. It's probably not even for the majority.

I recently wondered if Continuum was too extreme for it to be really successful. I know that due to it's very high hop loading, right from bittering hops, through late aroma hops and ending with a stupid level of dry hopping in tank, it clearly strikes fear into those meek drinkers who get vertigo when faced with high level hop compounds. My love of crystal malt as a belay for protection against unbalancing, when on the edge of top level hop exposure, often attracts criticism.

My daughter, Sarah, has just turned 14. That fact in itself only goes to strengthen my biggest fear of all; my advancing age resulting in my knees no longer being able to cope with some of my favourite activities². I was very much younger and fitter 14 years ago when that bundle of fun made an entrance into the world. Having a birthday at this time of year can be troublesome for the girl, as less attention to birthday presents are given due to everyone being consumed with the details of our ever increasingly burdensome Christmas celebrations.

She's a clever cookie, takes after her Dad, recently requesting climbing equipment for presents. That's easy, I thought, you can never spend too much money on beer or climbing equipment. Of course, the detail of exactly what to get would require a little bit of thought. Given that the weather this time of year is unpredictable, climbing gear might not get used until the summer and an all weather solution was needed.

Looking at a blank wall in the brewery and suddenly a devious plan was hatched. A quick look at the internet revealed that climbing wall holds were easily attainable. Job sorted, daughter happy, and I now have a climbing wall in the brewery that I can play on whenever I like.

"Dad?" you know, in the both cute but irritating way that only daughters can do.
"Yes Sarah?"
"Just because we now have a climbing wall, you know you can't get out of taking me proper climbing in the summer, don't you?"
"Oh, I suppose so" I say, pretending that I'm reluctant, but really, pleased that I'll probably now get bullied into spending more time away from work and doing something I really enjoy
.
Thinking about Continuum, I like it the way it is. I know other people do too. I left a well paid job to take up a career in an industry I enjoy being part of. I have always concentrated on doing things in an off-the-wall shunning-the-mainstream approach to my business. A little bit extreme, pushing into areas of risk and incurring costs that often cannot be recouped due to the very low margins that exist in the beer industry.

I've been in the bottom of a glacier crevasse, on top of many mountains, broken my leg skiing, nearly frightened myself to death more times than I care to remember being half way up a rock climb that really I shouldn't have been on.

I've run a pub³, started a brewery, sold the pub, made strong beer, week beer, well-hopped beer, had a pop at CAMRA and The Portman Group. I do these things because this is who I am, what I do. I make the beers I want to drink, and I shouldn't have to apologise for that. I write about the things I want to write about, I don't think I should have to apologise for that either. Inevitably this blog is now shaped by the fact that I run a brewery which is trying to make money out of brewing the very beers I like to brew. Getting to the markets that might return sufficient margin for me to continue to make these beers does require a rather extreme approach to marketing and this is always going to upset a few. And sometimes I get a little scared as a result.

But, a little bit of what scares me is what keeps me feeling alive.

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¹Now look, there really wasn't any need for you to think that.

²There you go again. But, although the fear of ceasing to be able to manage that is also there, I am told there are little blue pills that might keep everything in that department functional long after it ought to be.

³And really, that in itself I could fill a book with those stories.

Just The Tonic

We received a letter from The Portman Group the other day regarding a complaint made against Vitesse Noir by a member of the public......

I've just written the response.

Portman Group
4^th Floor
20 Conduit Street
London W1S 2XW

By Post, Email
and Open letter published on Dave’s Blog

05 December 2011

COMPLAINT AGAINST VITESSE NOIR

Sirs,

We note your letter dated 2 December 2011 regarding a complaint from a member of the public. We note your nine member companies, who between them represent a major contributor to the alcohol market. We recognise the need for pacification of the unreasonable pressure put on our industry by neo-prohibitionists who fail to recognise that the vast majority of drinkers are responsible and moderate. We note that the clever marketing campaigns conducted by your member companies, with their benefit of major marketing budgets, often subtly tread a fine line of your code. We note that major lager brands for instance often sponsor sport implying that by drinking that product you automatically become a sportier person. Additionally, adverts on the T.V. that suggest by drinking a product one’s party will be wild and raunchy must surely sail close to The Portman Group’s code of conduct.

We note that the majority of the volume of the products your members companies make are easy drinking, manufactured to a budget and a quality that is unlikely to challenge the taste buds of the drinker and sold in a manner that is designed to maximise volumes of sales. We respect this position and understand that this is what the majority of the law abiding drinking public is happy with.

We note that The Portman Group has no jurisdiction over us and is unlikely to be able to take action over this particular product, namely Vitesse Noir, as it is predominantly sold direct by us to a very small specialist market. The product is highly unlikely to be sold through supermarkets, which is where the majority of risk to public health would be.

We are a very small company. Our products are designed very much for a small, niche, and discerning customer base. To enable us to get to our target market we require a strong marketing message and it is disappointing that an organisation which is funded by major alcohol producers is seeking to interfere with real innovation and enterprising commerce. In the current economic environment it is the small producers like Hardknott who are likely to lead an economic recovery. Seeking to inhibit our success is inappropriate and unreasonable.

This particular product is inspired by an American Craft Beer the likes of which is very rare in the UK. It is part of a Craft Beer movement in the UK which is showing drinkers that a few well chosen drinks at a higher price is more responsible than looking for the lowest cost deal and drinking it in large quantities. It is highly flavoured and priced as a premium product and as such is recommended by us to be consumed only as a digestif. If the label is read in context it is clear that this is the case, and furthermore the label carries a warning, which the complaint has chosen to ignore.

It appears that it is the word “tonic” which is being picked out as the offending word. It is worth pointing out that pre-packaged “Gin and Tonic” is now a regular product in many supermarkets and is manufactured by at least one of your members. Additionally, several of your members regularly feature adverts in mass media citing gin and tonic as a refreshing pick-me-up.

We believe the risk to the general public of the innocent and obviously tongue in cheek wording on the labels of our bottles is insignificant. Indeed, we expect that our customer base will have all the intelligence needed to control their own health and wellbeing and are unlikely to believe that our little quip has any basis in truth. We believe our customers are intelligent and discerning and we market as such.

The product is manufactured in very small batches and we are unlikely to ever reach the manufacturing capacity that would cause this product to represent a public health risk.

We believe that for small artisan producers like ourselves a different approach to marketing is required. We will therefore wish to be allowed to progress with our business without interference from an organisation who is funded by major alcohol producers.

I note that this is not the first time The Portman Group has antagonised producers in the Craft Beer Sector. Hardknott recognises the importance of a regulatory body within the industry to prevent inappropriate Government legislation hindering the lawful and responsible actions of all of our industry. However, it is clear to me that The Portman Group is unable to consider the needs of the small artisan producer. Should a representative of small producers be required then we would be happy to help and thereby avoid further uncomfortable confrontations.

Dave Bailey

Brewer, Doer, Force Majeure.

Vitesse Noir at Port Street

We're off to Manchester later today, partly because my American-brewpub-owner-friend has to climb aboard a plane back to his colony tomorrow. He also hasn't been to Port Street Beer House and I wanted to show him that before he leaves.

We will also be delivering a pin of Vitesse Noir to Port Street ready for a meet the brewer/beer launch. If you haven't had a chance to try Vitesse Noir yet then get to Manchester on Wednesday. It is the first time we've provided this beer in cask form and I'm not sure when it might happen again.

Tanks a lot

It's been an interesting couple of weeks. To start with Ted, from Oregon, flew over our brewery early on the Monday before last on his way to Manchester. That very same afternoon, whilst Ted was being ignored by Simon in The Marble Arch, some tanks arrived. We've been waiting for them for such a long time that we now feel some sort of loss that we can't now say "when the new tanks arrive"

After much scurrying around for a forklift truck that had forks long enough, we finally got them off-loaded just in time for yet another radio interview with BBC Cumbria. They are good to us, the local BBC, but their timing could have been better.

The last week has been about interfacing SMS, Tri-clamp and RJT fittings. Despite my best attempts to avoid it we now have a ridiculous combination of pipe fittings in the brewery. The week has also been about putting as much wort into these tanks as possible. There is a risk that quite a lot of it now classes as beer.

These new tanks open up so many possibilities for us. We can now brew, condition, lager, dry hop and carbonate all in the same tank. The primary fermentation is close to being finished on both the inaugural beers and I'm now playing with the pressure versus temperature allowing the natural CO2 to be absorbed into the beer. No force carbonation. A question for the future is: if I drop the beer bright in tank and fill cask under counter-pressure is it still real ale? Would anyone care?

Either way, these babies are a significant step forward for Hardknott. To the best of my knowledge we are the only Cumbrian brewery using such technology on the main production beers. Early indications are that they will significantly improve our ability to get more beer out to more people more often.

Above is the Hardknott team. I'm the handsome one on the left. In the middle is the youngster of the gang, Alex. Ann, of course, is on the right, getting worryingly close to Alex.

The tanks are 2000l total volume and 1650l working volume. One currently holds about 12hl of Code Black which we brewed on Tuesday and the other very close to capacity of Continuum, which we brewed on Wednesday. Thursday Ted brewed a double imperial red beer which got crammed into one of our old 5 barrel tanks.

Beer lovers scran

I didn't want to be involved from the start. I'd been last year and been quite appalled at how badly the beers had been matched to the food. This year I'd been asked to contribute beer free of charge, two firkins no less. I insisted on the beer I would present being Infra Red at the very least. Of course, I'd have been happier to match something even stronger with the food, but this was a CAMRA dinner and it just HAD to be cask.

The event was the Cumbrian CAMRA branches annual awards and beer lovers dinner. Last year it was very clear that almost universally the beers chosen were session beers, which are rarely very good at matching with food. The one beer that was, if I remember rightly, about 6% gained inappropriate and over-the-top warnings from the jug runner about how strong it was.

Having been persuaded to attend this year, and having received no real benefits from the fact that we had donated beer, not even a free seat, and payment demands for the 4 tickets we had agreed to buy being somewhat less than tactful, I was below optimum mood for the event anyway. Being a person who works, lives and breaths beer nearly every waking hour of the day and being extremely busy with it, a Friday night in front of the TV was then, a week ago, very much overdue. I could still do with scheduling it in right now. A beer dinner like that is work you see, it has to be absolutely splendid to fire me into enthusiasm¹.

I'm not against session beer. I've made the point many times before that I drink a lot of it. However, when it comes to beer and food matching, session beer just does not cut the mustard, or for that matter any other condiment.

The menu was fairly dire. OK, it's hard to cater for 200 people, but what was presented seemed ill thought through and lacked flair, imagination or any substantial quality. The technical complacence of the cooking was fine, but overall it lacked any decent interest.

The first course was a "Cumbrian canapé Breakfast on a plate" Please, what was that? A miniature breakfast essentially. Clever maybe, but the only flavours were salt. black pudding and prune. The only positive thing I could say was that the pale session beer it was matched with helped to quench the thirst that the salt created. It did not go at all well with the dominant flavours of the black pudding and the prune.

The second course was more salt. Ham hock and potato terrine and this was possibly the best of a poor bunch of session beer matches. However, the food was bland other than the salt and overall failed to impress me.

Beef, which was actually the best food, was matched with an otherwise superb and very popular pale session beer. The result was a little bit like trying to get morris dancers to perform to Punk Rock. Never before have I ever tried a food and beverage match that was so clearly influenced by organisational needs over and above flavour.

By the time I got to the dessert, matched with my beer, I was already very unhappy that I had spent £120 of my money on tickets and also donated around £200 worth of beer. I was by this time quite convinced I should have gone with my original gut feelings of having nothing whatsoever to do with the event. The Infra Red would have been a far more suitable match for the beef, and I was expecting complete failure of a match it had been chosen for, which was the dessert.

Damson and almond tart. This would have gone well with Stringers Damson beer, for instance, or perhaps a Kriek. I believe Hawkshead do a damson beer too. But, Infra Red, I was sure, was not the best match. I'll be honest, out of the whole menu it probably was the best beer/food paring, but in my view this only goes to highlight just how bad this beer dinner was.

The beer with the cheeses was OK. Sorry, the beer is one of my favourite Cumbrian Beers after Infra Red and would have gone well with the beef perhaps slightly better than Infra Red. But still, it was only just OK with the cheese.

On top of the matching issues the whole event suffered from the major problem of delivering beer in jugs to tables. Decanting beer into jugs knocks out condition by the double decant. All the beers were flat, completely. I nearly ordered a bottle of wine.

All the very best beer matching events I've been to either use beer in bottles, or where logistics are practical, the beers are dispensed on draught directly into the glass. However, this is a concern I have with beer judging where beer is often dispensed with a double decant to ensure quite rightly that blind tasting is ensured.

Quite apart from the fact that this event effectively cost us over £320 to support, which I regret deeply, I also despair at the entrenched ideas of some beer "lovers" How on earth are we ever going to overcome the preconceived ideas of the like of Saturday Kitchen if the organisers of beer diners like this fail to understand that session beers are for drinking in the pub and beer and food matching needs a different approach? If this is the standard of beer and food presentation we will always fail to overturn the general public's view that wine goes better with food.

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¹I need to point out that many very good beer events do inspire me. We recently organised a beer dinner at Fayrer Gardens for instance. Also, we had an absolutely splendid time at Thatchers Arms with Tim Atkin and Adrian Tierney-Jones where beer and wine went head-to-head and proved that either, when done well, can be equally as good with food. Indeed, it is cooperation between menu design and drinks matching, along with bucking against influences for political reasons that make these events a success.

Flavour, taste, preconception and fashion

It was the SIBA North competition on Thursday followed by it's festival. The reader should already know this, unless a casual browser of random blogs; it's a major event that all beer enthusiasts ought to at least know about, even if they are unable to attend. We helped out by being runners during the judging, which was fun, if a little tiring.

The day had two very notable aspects which were particularly pleasing. The first was that we won silver in the Premium Strong Bitters category for Infra Red, which of course we were very pleased about. The second and possibly far more pleasing was the fact that we had a chance to meet up with many great people, some old friends, some new friends and some people I've only ever previously communicated with via twitter or blogging. It was great to see you all.

Competitions like this always throw up questions in the minds of individual beer enthusiasts. One very notable winner, just prior to the announcements being made and therefore in complete ignorance of the results, commented to me that these things are always a lottery. I'm not sure I completely agree, although clearly there are going to be a number of variables associated that will very surely throw up a different result on a different day.

As a brewer, and a business man, I have to consider what the outcome of such a competition really means. The 130 assembled judges obviously came from a variety of different backgrounds. Some beer bloggers, some brewers from other SIBA regions and presumably some publicans and perhaps some of the general public. The result of such a competition should at least represent the opinions of a spectrum of people.

While waiting for the final judging to finish I had a half of Magic Rocks Rapture 4.6% (Premium bitters) which I thought to be so good that I thought to myself "The bastards, I think I like this better than Infra Red" full of over-the-top dry hopped flavours that over-shadow my own attempts at progressive beer. Afterwards I got to taste Continuum, which risked failing to register on the hop-o-meter due to palate overload, despite normally fully satisfying my humulus desires.

We settled down to wait for the results of the competition. In the preamble to the announcements it was pointed out that everyone's perception of what is good is different. That fact is not only true but left sufficient impact on the assembled audience for a number of people to point this out later, and perhaps supports the view mentioned above that the outcome is to some extent subject to variables beyond the beer.

The Best Bitters category came and went and Continuum failed to get a medal. Equally, the premium bitters category came and went without Rapture gaining any recognition. I had been suffering from the fact that I had had a couple of beers and had not yet found the little boys room despite having been there 5 hours. Infra Red clearly wasn't going to get anything if Rapture and Continuum didn't. Too many hops, too narrow an appeal, too flavoursome I assumed. I took a comfort break fairly happy I wasn't going to miss anything important.

I happened to get back from dispensing with the aqueous proportion of previously consumed beer in time for the premium strong beers category to be announced. Hawkshead NZ Pale Ale got Bronze.

"Oh well" thought I "Hope yet for properly hopped beers"

Then came Silver. "Hardknott Infra Red"

I think that my thought process at that point included a proportion of profanities of delight that rarely get used in my writing, but oft enter my head. I had been convinced that Continuum would be more likely to win than Infra Red. Needless to say the evening that followed would have been difficult to spoil as I floated on a cushion of very comfortable euphoria.

The next day we set off early from Manchester to deliver beer and pick up empties from London. We were due in Essex in the evening to attend a beer verses wine dinner hosted by The Thatchers Arms with the beer writer Adrian Tierney-Jones and wine writer and Saturday Kitchen presenter Tim Atkin.

If you've been following our blog you will be aware of our attempts to change a little bit the perception that beer is unworthy to drink with quality food. The dinner was a great success and in the end was more about like minded people getting together with great food and great drink than about any real contest. The results concluded that both beer and wine are equally worthy at the table when good company is in plentiful supply.

It is intriguing to me that various people at the dinner did have some preconceived ideas about which beverage should work better. I tried very hard to put aside my own. In the end the best match of the evening was, in my view, a wine, although I still think that beer came out slightly on top overall from my perspective.

Irrespective of what I thought, there were clearly some differences of opinion. How much that is influenced by peers, media, ancestors and more is debatable. It is very common for people to go to the pub and order a pint before a meal, but then swap to more robust wine for a meal. In my view this is mainly due to preconceived ideas, but also because the beer industry fails to do enough to change that.

Both the dinner and the competition from the day before have interesting enlightenment for me. Hawkshead Windermere Pale won the SIBA competition. It is very popular and I know the team at the brewery work very hard to make it a good, solid and consistent product. It has wide appeal and certainly enjoys commercial success. This is clearly because this beer is suitable for the regular beer drinker in the regular pub where quite rightly the majority of beer is consumed.

Infra Red and perhaps even Continuum might just have too narrow appeal for the wide range of judges that are quite rightly assembled for such competitions. Indeed, my suspicion is that Infra Red won partly because the number of beers in the strong premium beers category is somewhat less than in the best bitter category.

If Hardknott made a beer that tried to have as wide an appeal as Windermere Pale, or perhaps another very popular Cumbrian beer, Loweswater Gold, I could sell a lot more beer. But then, I'd only be copying what these very good breweries have done. Instead, our aim is to carry on making beers that are different, have narrower appeal, and some I hope that can further lever into the quality dining arena.

Having tasted Magic Rock's Rapture, I now feel Infra Red is somehow inferior. No doubt if I tried to ram more hops into it, quite apart from no longer being the beer that gained silver, might also be even less popular with a wider audience. Equally, Light Cascade, which I consider to be the runt of my litter, perhaps should have been entered into the competition, and does continue to enjoy good sales on cask.

In conclusion, I am left thinking that the only thing I can continue to do is ensure Hardknott makes the beers that define us. If we win a few prizes along the way, then so much the better. If we can convince a few more people to focus on trying beer as an alternative to wine with food, then better still.