SIBA report: Indie brewers still on a roll

Doom and gloom may still cloak the industry in many areas, but there are shards of light.

And these shards of light are ruby red, golden and dark. Yes - locally brewed craft beers are still very much the industry's success story. Evidence of this came this week with the publication of the Society of Independent Brewers (SIBA) Local Brewing Industry Report 2011​.

It revealed that small, mainly independent, brewers are continuing to buck the trend of the overall beer market.

Volumes are up 8.8 per cent for around half of SIBA's 463 members, who were surveyed for the report. It also found SIBA brewers' total beer volumes have more than doubled since the start of progressive beer duty (PBD) in 2002. All this was compared to an overall decline of 3.9 per cent in the UK beer market last year.

Increasing volumes

Based on actual volumes for the first nine months of 2010, plus estimates for the final quarter, the survey found a 7.5 per cent rise in production by brewers. And responses from new brewers added an extra 1.3 per cent to the annual volume rise. The survey also revealed a rise in keg draught beers' production share from 1.9 per cent to 2.8 per cent.

SIBA members were asked about the alcohol content of beers they brewed:

- The average strength of respondents' best-selling draught beer is 4.3 per cent ABV

- 60.5 per cent of local beers are within the range 3.5-4.2 per cent ABV

Choice and Diversity

The amazing diversity of beers being produced by SIBA members is revealed in the report.

Cask ale maintained its production share of around 80 per cent, but keg beers grew as smaller brewers looked to create a broader 'craft beer' market. SIBA members are producing around 2,500 cask beer brands a year, 3,500 seasonal ales and 1,750 bottled brands, compared to just 300 in 1976.

The most popular type of beer is a golden bitter/ale - with 91 per cent of SIBA members brewing this type of beer on a regular basis. Next popular is traditional bitter, then strong bitters/IPAs.

Threats

The report also warns of the threat to the "punitive" duty charged on beer in the on-trade.

Julian Grocock, SIBA chief executive, said: "Local brewers are just the kind of business this government has been saying it wants to see succeed: they create jobs for local people, contribute to the local and wider British economy by using home-grown ingredients such as barley, and have impeccable environmental credentials.

"It is time for the government to become more 'joined up' in its approach to taxation across the brewing and pubs industries."

He also called for a lower VAT rate across the hospitality sector.

Impact of progressive beer duty

The report is unambiguous about the role played by progressive beer duty (PBD) in the sector's success. Since its introduction in 2002, the number of SIBA brewers has doubled, their sales have doubled and the number of people employed has doubled.

Grocock added: "The removal of PBD would destroy the industry, leading not only to brewery closures, but more pub closures and the loss of jobs."

Sixty per cent of respondents to the survey said they believed their brewery would fail if PBD was withdrawn.

Direct Delivery Scheme (DDS)

The report reveals that the DDS scheme continues to go from strength to strength.

Founded in 2002, the scheme allows pub companies and licensees to order micro-brewed beers from SIBA's office. At the time it was introduced there was "little confidence at the time it could succeed", the report says. But sales through DDS grew by 9.8 per cent year-on-year in 2010 and now stand at almost £10.8 million (y/e Sep 2010).

More than 2,000 pubs ordered through DDS last year, a 13.8 per cent increase, and 94 per cent of deliveries through the scheme are to pubs within 40 miles of the brewery the beer is from.
Keith Bott, SIBA's chairman: "the culture of pub-going is under threat"

"Although the on trade continues to struggle, the iconic concept of the Great British Pub is alive and well - and evolving too, as locally brewed craft beers add value, quality and choice for enterprising publicans and an increasing number of discerning customers.

"But the culture of pub-going is under threat - it must never be reduced to a luxury experience, reserved for the well-to-do and tourists but priced beyond the reach of ordinary folk except as an occasional treat. SIBA's voice will continue to be at the forefront of calls to government to take positive action to reverse this worrying trend."