Has The UK Reached Peak Craft?

Has The UK Reached Peak Craft?

With high-profile buyouts and news that Lidl is to start stocking speciality brews, what next for the craft beer market?

When the Campaign for Real Ale (CAMRA) was formed in 1971 by four beer enthusiasts concerned about a prevalence of low-quality and poor-taste beer, it was unimaginable that four decades later, we would be asking whether the abundance of craft beer might be expanding too quickly for British consumption.

But that’s exactly what has happened. A year ago, the British Pub & Beer Association reported that a new brewery was opening up every other day in the UK and community pubs minister Marcus Jones hailed the country as a “brewing powerhouse”. CAMRA reports that 70% of pubs now serve “real ale” and last year the net growth of breweries exceeded 10% of the total, for the third year in a row.

The astounding rise of real ale and craft beer has meant that CAMRA have opened a consultation on whether it should change its focus. “Who do we represent now, and who should we represent in the future to help secure the best outcome for the brewing and pub industry? Do we continue with our narrow focus, or should we become more inclusive?” CAMRA co-founder Michael Hardman asked in a statement.

The difference between real ale and craft beer could be significant for the industry’s future, particularly if CAMRA members opt for rebranding the organisation. Real ale – as defined by CAMRA – is brewed using natural ingredients and is matured in the cask. By contrast keg beer, which has a longer shelf life but arguably a less distinctive taste, is what CAMRA has historically stood against, but craft embraces many types of beer and its boundaries are not clear.
Dancing around a definition

Knops Beer Company is based in a picturesque golfing enclave in East Lothian, supplying its products to the estate it inhabits. Founder Robert Knops, who produces (among others) an American-styled option called California Common, based on a type made during the Californian gold rush, may be a far stretch from the surroundings it’s brewed in, but America is where the craft beer trend originated, and where the culture is far more entrenched than it is in the UK. Craft beer in the US is regulated by the Brewers Association and deems output, independence from large industry groups and a traditional taste among the conditions you need to meet in order to call yourself a craft brewer.

The desire to define is strong among some UK brewers. Knops says that without a definition, craft is “open to being hijacked for use by larger corporations who use the term to try to persuade consumers that the beers produced are small scale and not connected to the parent company. We call these crafty beers!”

“The sheer number of brewers has made this market very competitive and it may be that we are close to the point where supply is outstripping demand”

Robert Knops, founder, Knops Beer Company

An attempt to agree on a definition was made last year by a group called the United Craft Brewers, involving among others BrewDog, considered by some to be the superstar of the UK’s craft industry, with a chain of bars and memorable products including a premium beer encased in taxidermied squirrels. United Craft Brewers apparently failed to agree on output and levels of independence; that one of its members, Camden Town Brewery, was bought last year by the world’s largest beer company, AB InBev, perhaps highlights the difficulties of agreeing to limit an industry when opportunities for expansion are rife.
Growing onwards and upwards

Knops, who would support a definition of ‘independent’ as opposed to ‘craft’ beer, based on a company being largely controlled by the brewer, supplies to Asda through the Craft Beer Clan of Scotland. “We recommended brewer types, retail types, taste,” says director of the clan, Chris Miller, who is in talks with other supermarkets for a similar supply chain. Lidl is among the discount retailers adopting the trend for craft, having put premium and vintage bottles on its shelves a year ago.

But with all the opportunities in the industry, it has come to a point of reflection. Arguments abound about whether craft should be made using contract breweries. Many are opposed to the idea, believing the product should be local. Brewers often operate in limited locations, which makes expansion difficult without moving to a new site – something Knops Beer Company had to do three years ago.

“We have planned for the [current] brewery to have a capacity of 5,000hl [hectolitres]. The rate-limiting step is the number of fermenting and conditioning tanks we have. As we grow we will add to the tank farm. We have just bought an additional three tanks which will be in action in the next few weeks,” notes Knops.

Despite the room for expansion, Knops feels that we may be reaching ‘peak craft’ in the UK. “The sheer number of brewers and beers available has made this market very competitive and it may be that we are at, or close to, the point where supply is outstripping demand.”

Miller believes there is still room to grow, but the Craft Beer Clan’s chief focus is on exports, particularly to Asia where a burgeoning middle class in emerging economies is sipping up supplies. And asked about the impact of Brexit, he doesn’t sound too worried. “Exporting will be an important part of our longer-term business plan,” he says.

Knops is less sure of the future. “I am very concerned about Brexit on a number of levels. We started in 2010 when the economy was beginning to recover… the number of breweries [since then] has risen dramatically and a huge amount of drive, innovation, passion and energy has been invested by small brewers.” He says that while weak sterling might benefit exports, it won’t help with imports of hops, crown caps, kegs or brewery equipment, and is worried that in the longer term Europe could catch up with the UK’s “innovation and high-quality, exciting products”.

Though the direction of the industry is unclear at present, it’s unlikely that craft beer will be on the decline. As CAMRA explains: “In the 1970s you could count the number of breweries on two hands. Now there are more than 1,500 across the country. Early campaigners struggled to find pubs serving real ale. These days it’s rare to find a pub which doesn’t have one hand pump.”

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