Tuesday 5 June 2018

The real tie.

Getting micro-brewed beer onto keg taps in outlets is no easy task. It occurs to me that in actual fact this is a far greater barrier to growth of small independent craft breweries than PubCos or any other form of hard tie.

"There's been an interesting bloke on the phone" Ann informed me as I returned to the office "He's just bought a hotel and wants our beer"

At that point it seemed a reasonably ordinary enquiry and I assumed it was part of the usual irritating background noise that distracts me from my own job.

"OK, that's good" I replied, with a fairly thick layer of dismissiveness "Do go ahead and sell them some of our beer, after all, you are the sales department"1

"They want Space Hopper in keg" Ann persisted in breaking down the barrier to her information flow "the guy tried it in that place we sent a keg to the other week and really likes it. Likes the beer and likes the branding"

"Oh?" I replied "not cask, that's nice, but..... equipment?" she was starting to get through, a sale of keg to a new account was something that interested me.

Intergalactic Space Hopper at Haweswater
"He doesn't think he'd be able to serve cask beer as they have no cellar" ah, so that's going to see me heading off to sort something out in this place. "You need2 to go and look and see if they have the right things to serve our keg"

This was following on from a recent bad experience where we had installed a keg font in a pub and a few months later, when the manager changed, they then decided not to buy our beer anymore. I rushed to the pub immediately I discovered this to remove our equipment only to find a Marstons sales rep there trying to argue that my equipment in fact belonged to them.

So, I felt a little bruised and reluctant to spend the best part of £500 on another project of unknown outcome. Never-the-less I pitched up at this rather remote location on the shores of Haweswater in the Eastern Lakes.

That was over two years ago. I installed the tap I had removed from the previous pub and we've been merrily selling the place beer ever since and in enough quality to justify the effort and expense. It turns out that the new owner of the hotel is delightfully alternative in his outlook towards business.

They contacted me a couple of months ago as they were negotiating with suppliers of their major brand lager. It seems that they were being offered a cash lump sum for a two year exclusivity deal. They were being offered £2k cash to kick our Intergalactic Space Hopper off the bar. Apparently it isn't just one major beer producer that is doing this, it is most of the big multinational brands and is looking a little bit like a cartel and anti-competative action.

Now, Stephen the owner is no ordinary hotelier. He seems to have no intention of removing our beer, even with an incentive so great. John, who is dealing with most of nitty gritty, was simply contacting me to see if we could do anything to go someway to match the offer from the big boys. We considered for a while, contemplated taking over with our own exclusivity deal involving sourcing more artisanal lagers etc, but then our decision to stop brewing at Millom rather took over the situation. Indeed, the realisation that big multinational beer brands are actively tying up many routes to market in ways that we simply cannot commercially compete against was partly a catalyst to us deciding that we had to be drastic with our business progression.

£2k is roughly the annual value of this particular account. We cannot compete in this territory. It isn't about the small amount of extra revenue they are trying to buy, it's about keeping the growth of small producer keg off the bar fronts in run-of-the-mill outlets.

I firmly believe that growth of micro-brewing has to focus on gaining acceptance on the bar for keg. That has to be in your regular nominally free-of-tie pub, restaurants, hotels and similar. However it looks very much like the big multinational brewers have agreed a plan to make sure that we cannot make much progress into these areas.

I recognise a barrier, but to quote a famous person, we choose to do these things "not because they are easy, but because they are hard". I just wish the rest of the beer world would wake up and realise that this is where the real effort should be targeted.

The good news is that as a result of us announcing our cessation of brewing at Millom we have been chatting a little bit more with Stephen and John. Interesting and supportive people with whom I hope we will continue to have business dealings with.


1It is entirely likely that as this is a while ago, and I'm grossly paraphrasing the actual conversation, that in actual fact I displayed high levels of irritation at the intrusion into my current thought train. It happens, I may have been in the middle of fixing something in the brewery, which does tend to put me in a less than ideal mode for receptive dialogue. It might also be the case that I was considering some wider beer-related issue that I felt required a blog post to be written, or a tweet replied to, or some such thing. On many days it happens that both things are occurring simultaneously and my mind often fails to complete either task with satisfactory levels of competence. The sales department keeping me abreast with micro-details of individual customers seems a waste of any remaining brain power that might be surplus to requirements. Thought train derailment I do find so frightfully annoying.

2I'm really working hard to remove this word "need" ... I'm sure it would be awfully useful, but no one is going to die as a result of it not happening.