Warning issued despite independent breweries increasing turnover by 32%

By Gary Lloyd

- Last updated on GMT

Growth strategy: independent brewer and bar operator BrewDog (BrewDog Bradford pictured)
Growth strategy: independent brewer and bar operator BrewDog (BrewDog Bradford pictured)

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The top 25 independent breweries in the UK have increased their turnover by 32% but decreased demand and energy prices could put a dent into further recovery.

The boost has seen turnover shoot up from £998m to £1.32bn for the entirety of 2022, attributed to the end of Covid restrictions and pubs returning to full capacity therefore increasing the number of sales breweries made to pub and pub groups, says national accountancy group UHY Hacker Young.

However, there are fears growth in independent breweries’ turnover will be hit by decreased demand from pubs as consumer discretionary spending decreases and pubs dealing with soaring energy prices are more limited in their beer purchasing ability than previously.

Brewery revenues are very likely to suffer the knock-on effects of the recent wave of pub and bar company insolvencies because there will be fewer pubs to make orders. There was an 83% increase in pub and bar insolvencies in 2022, with 512 companies ceasing trading, according to Insolvency Service research.

Cost-saving measures

Some breweries have already had to implement cost-saving measures, such as reducing operating hours, closing temporarily or offering a reduced menu. Many have been forced to close permanently, with craft brewers Wild Beer (whose beers were acquired by Curious Brewery​) and Tyne Bank going into administration at the end of last year.

After many years of rapid revenue growth, the seven craft breweries in the top 25 have seen growth in annual revenue slow to 20%, overtaken by the 32% growth among non-craft breweries.

BrewDog is the largest UK craft brewery and is still aggressively targeting growth – recognised at the Publican Awards 2023 (29 March) when it won two categories​.

While the top 25 independent breweries have seen revenues pick up in the past year, they have not returned to pre-pandemic levels, which saw them reach £1.57bn in turnover in 2019.

Struggle to secure debt

UHY Hacker Young partner James Simmonds said: “The UK’s independent brewery market has been fuelled by craft breweries in recent years but now there are concerns the market’s smaller companies will struggle to secure debt in a weak economic environment, due to limited cash funds or assets to use as security.

“Independent brewers in particular may struggle to reduce costs compared to larger competitors, as their smaller scale means they are less able to negotiate beneficial deals with energy suppliers.

“Craft brewers have benefited from consumers’ taste in beer becoming more sophisticated, as well as the growing preference for independent and locally sourced goods. However, the cost-of-living crisis means many consumers will either cut back on spending on craft beers or opt for more affordable products.”

Other breweries on the list include St Austell, Daniel Thwaites, Wadworth & Co, Timothy Taylor & Co and Northern Monk.

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