True brews
Over the past 20 years scores of long-established regional breweries have gone to the wall, including 10 in the past year alone. As punters turn to lager, and increasingly to wine, the traditional beer industry has struggled badly. And now that Whitbread and Bass have chosen to stop brewing, more than four-fifths of the nation's beer will soon be brewed by just three firms, two of them based abroad.
Against such a backdrop, Philip Parker of the Freedom Brewing Company in Fulham sounds remarkably upbeat. "When you get a marketplace where you have a rapid concentration into the hands of a few it's the middle ground that gets squeezed. You have the large players controlling the market, yet it's the small, niche practitioners that are the beneficiaries." Freedom is one of about 400 microbreweries and brewpubs that account for perhaps 2% of the 37 million barrels of beer drunk in the UK each year.
The company was set up in 1995 and currently produces a core of four draft beers plus the occasional, more esoteric brew at its two microbrewery-barsin London's Covent Garden and Carnaby Street. These are a pilsner lager, a red beer, an India Pale Ale and a Bavarian-style wheat beer. A bottled version of Freedom Pilsner, available everywhere from Tesco to Conran and Groupe Chez Gérard restaurants, has just been joined by Freedom Organic.
"We are unashamedly trying to build a brand," Parker says. "It's the vehicle through which everyone will understand what we're all about - namely, beer at its best." From the start the company put its faith in lager, and aimed to break free from the "beard and belly brigade" that tends to symbolise real ale. "If you want to characterise the difference in design, we're about beechwood and stainless steel as opposed to the brass and oak of a traditional Firkin-style operation."
Today's spit ‘n' sawdust style of brewpub was pioneered by people such as David Bruce, who opened the first Firkin in Southwark in the 1970s. It was really just the revival of an ancient tradition that had lapsed - 150 years ago half the country's 30,000 pubs brewed their own beer. What is new is the American concept of dragging the brewing equipment out into the open and then wrapping a restaurant around it. One of the first in Britain was Oliver Peyton's Mash & Air, which opened in Manchesterin September 1996. Peyton had long had strong views on beer. "I feel there's a stigma attached to it - the quality of the product is often appalling and so is the environment it's drunk in," he said.
Alastair Hook understands this fledgling industry better than most, having been one of the original founders of Freedom and then Mash's brewmaster in Manchester. Four months ago he left Mash to set up the Meantime Brewing company in Greenwich to brew and bottle beer on behalf of others as well as produce his own Union Beer - a Viennese-style amber lager. Clients include his former bosses at Mash and the new Tate Modern gallery.
In Hook's words, "There's no better place to drink beer than in a brewery - on draft, fresh and from small batch production. But its short shelf-life often leads to problems with bottling." This may explain why the Canal in Glasgow, Scotland's only brewpub-restaurant, which opened in the summer of 1998, stopped supplying Oddbins with its Miller's Thumb brand. However, operations director Bill Hughes insists it was just a test run and that they may begin bottling again in the future.
Back at Meantime, the brewery is already working to full capacity, pumping out 1,500 cases of beer a week. And yet, given the size of the discounts in the free trade, Hook knows that sooner or later he will have to find his own outlet to make a decent return. According to Philip Parker, mass-market beer brands that wholesale for as little as £15 a case (excluding VAT), sell out for £60 or more (excluding VAT) in the bars of central London. This explains why Whitbread and Bass have given up on brewing, and why raising outside investment for a microbrewery is such hard work.
At the Pacific and Oriental Brewery, a 150-cover restaurant in London's Bishopsgate, having the microbrewery on show is a crucial part of the design. "It's an interactive experience," declares Peter Frost, the head brewer. "People can lean over the balcony and pat me on the head if they want."
It's a feeling shared by Philip Parker, who was thrilled when Time Out described his Covent Garden venue, with all its gleaming tanks and pipework, as the "fashionable bees bollocks!" The downside is the amount of space taken up by the brewing equipment, space that might otherwise be full of paying customers. At Pacific and Oriental, the brewhouse and twin dispensing tanks take up a third of the ground floor. It will be interesting to see whether the new Mash in London's Mayfair, being launched this October, will have a brewery at its heart. Meanwhile Freedom also plans to open a third site in London, still focusing very much on wet sales - which account for 75% of turnover. Food in the 70-cover restaurant in Covent Garden is freshly prepared and aims not to be clichéd - the fact that Thai-spiced mussels for example are cooked with pilsner, is not mentioned on the menu.
Less seems to be going on outside the capital with last year's planned expansion of Mash into Brighton still to take place. Mash in Manchester is set to close (Caterer, 31 August, page 4), because Peyton believes that the location is now wrong. He hopes to open a smaller version elsewhere in the city in the near future. Because a brewpub-restaurant requires a far greater investment, it is essential to find the right location in an area with a high disposable income. "What works in Covent Garden may not work in Doncaster or Bradford," says Ian Low of the real ale pressure group Camra. Low believes there is potential for provincial brewpubs that are "not quite as posh as Mash or as earthy as Firkin."
Plans on hold
This gap could have been filled by the Canal, but plans to turn it into a chain of up to a dozen microbreweries are on hold. The Glasgow-based parent company Big Beat has been preoccupied with its nightclub brand, Home, though two possible sites for a Canal-style microbrewery in Manchester and Edinburgh have been considered. There does seem to be a growing interest in craft-made premium beer outside London "You see it in cities such as Manchester and Glasgow, which would not have been the case three or four years ago," says Dave Steward of Marblehead, on-trade distributors for bottled Mash.
Microbreweries also serve an emerging market on the other side of the Atlantic. "Over here craft beer still represents only 5-6% of the total, and the marketplace for well-designed and well-operated brewpubs is not even near its peak," says Jim Bunting, one of America's top brewpub consultants. In the USA such brewers benefit from having duty rates linked to the size of the brewery. The same is true throughout the EU, but not in the UK where the smallest microbrewer pays the same as the biggest beer baron. If Gordon Brown were to mend his ways, Alastair Hook and others believes the industry could really take off.
Source: Caterer & Hotelkeeper magazine, 28 September - 4 October 2000
