Cast your mind back to 2013. It was the year the horsemeat scandal rocked UK suppliers and retailers, Sir Alex Ferguson retired as Manchester United manager, and Daft Punk’s hit ‘Get Lucky’ became the sound of the summer.
It’s also the year when five big names in UK craft beer were born. London’s Five Points, Brixton and Fourpure all came into being a decade ago, as did Berkshire’s Siren Craft Brew and Yorkshire’s Northern Monk.
Founded after the likes of Camden Town, The Kernel and Magic Rock, but before Cloudwater, Verdant and Lost & Grounded, these startups went on to form the basis of what can now reasonably be termed the UK’s “second wave” of craft brewers.
All five have – at various stages – been listed with national grocers. Two have been bought out by multinational brewers (with one returning to independence last year) and all have played a part in growing the reputation of small, independent British breweries in the last decade.
So what does the future hold for the class of 2013 as they enter their second decade? What pressures and challenges will they face, and what opportunities do they see on the horizon?
The explosion of craft beer
The year 2013 was a good time to get into beer, Five Points brewing director and co-founder Greg Hobbs recalls: “There was a real buzz around craft beer; new breweries were popping up regularly, all with different approaches but the same goal of brewing the best possible beer for passionate drinkers.”
In 2013, Five Points was one of 35 members of the London Brewers Alliance, and felt “like we were running late to the party”, Hobbs says. By 2019, however, this number had swelled to over 130, and the Hackney brewery was “considered as part of the old guard”.
London certainly played a big role in the explosion of craft beer in the UK. Brixton’s founder and MD Jez Galaun admits being inspired by “the emerging beer scene in places like Bermondsey” and deciding to make it “our mission to put Brixton on [the] map for great beer”.
Initially, many of these businesses were small-scale operations, with founders working long hours brewing, cleaning and making deliveries to get their dreams off the ground. Northern Monk’s existence was made possible by £5,000 gifted from founder Russell Bisset’s grandmother, while Galaun remembers fondly “delivering most of the beer by hand using a borrowed trolley” in Brixton’s early days.
“We all initially bootstrapped our businesses using savings, then through crowdfunding or major brewers making acquisitions, some more successfully than others,” says Galaun.
Multinationals and supermarkets
Craft beer fever was taking hold, and all five of these businesses experienced rapid growth in their first five years of existence. Bermondsey’s Fourpure caught the eye of Australasian outfit Lion, which snapped up the business in 2018 (it returned to independence last year), while Heineken took 49% stakes in both Beavertown and Brixton the same year.
“We were looking for a path to growth at the time Heineken approached us offering their help,” Galaun says. Access to Heineken’s distribution network and the chance to build its new brewery in the heart of Brixton were key factors in the decision to partner with the Dutch multinational, he adds.
“It was an easy decision to make, as I knew what a fantastic opportunity it would give our brand and our team. We embraced it fully and moved to full ownership in 2021.”
Supermarkets were also investing behind craft beer in a big way. Five Points secured listings for its Pale and Pils in Waitrose in 2017, the same year Northern Monk went into Morrisons with packs of its Eternal and New World brews.
“Once we made the decision to find a larger production facility and step on to that duty escalator, our ambitions went beyond trying to make amazing beer but also to increasingly have it as widely available as possible,” Bisset explains. ”To do this in the UK, retail had to form part of the strategy.”
All this meant, pre-Covid, craft beer was one of the more dynamic and exciting categories in fmcg, both in grocery and out and about in the wider world.
Is craft beer in crisis?
Fast forward to 2023, however, and the landscape looks mighty different for these businesses. A dangerous cocktail of runaway inflation, soaring raw material costs and shifting consumer trends have made it a tough time to be a small, independent brewer.
And that’s off the back of an unprecedented global pandemic, the fallout of Britain’s exit from the EU, and the rationalisation of craft ranges in many of the mults.
“Where we are now is a very challenging environment for a brewery like ours,” explains Siren Craft Brew’s founder Darron Anley. “The small independents [venues and outlets] are really struggling and closing down in their droves. The support the consumers gave them during Covid has dwindled, unfortunately at a time where costs are going through the roof.”
For some that set up shop in 2013 – including Weird Beard, Hopstuff and Brick Brewery – the pressures of the past few years have proven too much to bear.
And for those that have survived, it has been far from easy.
“The industry generally feels more competitive these days than when we first started out, particularly with the multinational breweries pushing hard with their own ‘craft’ offerings,” Hobbs says.
Shifting retail landscape
The shifting retail landscape has forced Five Points into a rethink of its supermarket offer, after deals with Waitrose and Tesco wound up during the pandemic. In their place, the brewer has turned to the “arguably less fashionable premium bottled ales category”, launching Five Points Best in 500ml bottles in Sainsbury’s, Asda and Morrisons.
“There was a period pre-Covid where the retailers seemed to be oversaturated with craft beer cans, which despite being great for the enthusiast, was overwhelming for the general consumer,” Hobbs says. “Retailers were focusing on exclusive beers which, combined with unknown rates of sale and long shelf-life requirements, made production and planning difficult.”
Hobbs still believes there is “scope for growth” for craft beer in grocery, but adds Five Points’ efforts in the future will be focused around a single brand – Five Points Best – for the sake of “efficiency and simplicity”.
Others are directing focus away from single-SKU specials and towards the volume growth offered by multipacks. Siren, after coming to the small-pack party late in 2019, has secured four-pack listings in Asda and Waitrose recently, alongside a host of its single can beers in a larger 440ml format.
“Grocery and independent are both hugely important to the growth and development for Siren, they both have a role to play,” Anley says. He acknowledges the rationalisation currently taking place, but adds his belief that “expansion will come again” as grocers and independent retailers figure out “what works for them”.
Planning for the future
The brewers themselves – even those now nearing their teens – are also still trying to make sense of this changing landscape. For some, like Five Points and Northern Monk, that means doubling down on a commitment to their community, and working more closely with suppliers to cement a reputation as an ethical and locally rooted business.
“Today, community is our most important company value and this manifests in a host of ways,” Bisset says. “Whether it’s our community foundation Faith in Futures providing £5,000 grants to community projects across the UK, or the Patrons Projects showcasing the very best of creatives in the north, we have always endeavoured to put community at the heart of what we do.”
For others, like Brixton, it’s about embracing the shifting identity of the UK craft beer drinker. Galaun says having been “quite monocultural” in 2013, craft beer has “opened up a lot” in the last decade.
“It’s nice to see it slowly becoming more diverse and less of a niche interest for a specific type of person,” he says. “It’s a more energised and healthier industry for that change.”
On how craft beer can stay interesting and relevant, Anley says “the main drivers” of “provenance, connection and stories” remain vital to retaining existing drinkers and attracting some of the “many that are yet to take an interest” in the category.
“I truly believe there is still huge growth for this industry, both for the brewers and our partners,” he says. “It’s not easy, but no one said business was easy.
“You have to keep watching, listening and adapting, all whilst holding true to the values that got you there in the first place.”
Those values, of hard work and a relentless focus on quality and consistency, will be needed if craft beer’s second wave is to survive the myriad of challenges that lie ahead.
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