London craft brewers' growth dilemma
As foreign markets from Italy to Asia develop a taste for the capital's specialist brews, producers are grappling with new decisions about scale, exports and 'keeping it real'. Barney Thompson reports.
Produced by Jerry Andrews. Filmed by Petros Gioumpasis. Edited by Oliver McGuirk.
If you want to find a craft brewery in London, A good way to start is to look for the railway arches where they often cluster. From just eight brewers in 2009, there are now 92 of all types and sizes across the capital, according to the Campaign for Real Ale. These young businesses face a dilemma. Should they stay small, and risk being crowded out, or take the plunge, and go for growth?
On what's become known as the Bermondsey Beer Mile, stretching southeast from near London Bridge, there are half a dozen. In many microbreweries, there's barely room to raise your elbow. And they're happy that way. They're small, local, independent, spit and sawdust, authentic.
We started homebrewing in 2011 when my lecturer at uni said if I homebrewed I'd save myself a bit of money. We got quite good at it.
Our first beer that was any good was our porter. Had a go at brewing some pales and IPAs, and they were awful. It was largely in our kitchen and in the bathroom. Our flatmates just hated us for it.
We started with a 100-litre kit. That's 100 litres per batch. And we're now in a 1,100-litre kit-- and without previous careers or money behind us. So we've had to fight for everything we've got, really.
There has been a subsidy from the government to small breweries, which has really been great for entrepreneurship, reduction in duty under certain capacity of production, which we are under, and actually quite a few of the microbreweries that people will know of will be under it as well. There's a ceiling, and once you go past it you start to pay closer and closer to the full rate of duty, the same duty rate that the much larger players would be paying.
On an industrial estate a mile along the railway lines is a very different operation. Fourpure started as two brothers, experimenting with interesting brews for their friends, but has grown into a much bigger business. It is a story repeated across the UK, as volumes produced by craft brewers have risen rapidly. Most of Fourpure's beer is sold in London and across the country, but about 10% goes abroad.
So when we started there were three of us. So Dan and Tom-- the co-owners-- and myself. We now employ about 50 people.
The largest proportion of our beer stays fairly local. So we especially like to trade into local bars and pubs and bottle shops in southeast London. We also have some nationwide distribution, and a small amount of export.
When picking an export market, we want to make sure we're working with the right partner. The most important consideration for us is that they look after the beer properly, and they order the beer frequently enough.
Australia, the US, Sweden. In the US, for instance, there's such a saturation of craft beer that it's really important that you send the right products, that they'll stand out. The Swedes really like stronger beers, we have noticed, stronger, more interesting beers. And Singapore is pretty similar to London, in that they like to drink beers that are just [? exceptional, ?] and can be served nice and cold.
Scale is relative. When you compare us to the other breweries in London, we certainly are big. But when you compare this to craft breweries in the more developed markets, we really aren't.
As the craft beer sector thrives, London's brewers are expanding their horizons. For microbreweries like Anspach & Hobday, as much as craft brewers with multinational muscle behind them, such as Meantime in Greenwich, there are fast-growing export markets in Europe and beyond. The global beer market is expected to be nearing $700 billion by 2020. That's plenty of discerning drinkers for London's craft brewers to tap into.
Barney Thompson, Financial Times, the Bermondsey Beer Mile.