Hop Burns and Black, a beer bottle shop in south east London, recently announced it would be pulling its best-selling product. Financially, it made little sense. Nor was there a problem with supply – if anything, a surplus was on the way.
The best-selling product in question was canned beer from Beavertown, a brewery known for its voracious criticism of ‘big beer’ and nicknamed ‘the champion of London’s craft beer scene’. It had just struck a £40m deal with Heineken.
‘Beavertown has been hugely instrumental in developing the UK craft beer scene and to sell to Heineken – no matter what the share – feels, quite frankly, like a slap in the face,’ Hop Burns and Black said in a statement.
Beavertown’s flagship brews Neck Oil and Gamma Ray made up around 8% of the shop’s revenue, and yet out it went.
The likes of Heineken and AB InBev (the world’s largest brewing company and producer of Stella Artois and Budweiser) have long been trying to muscle in on craft beer’s growing popularity. According to research from YouGov, 50% of UK beer drinkers were choosing local craft beers in 2017.
Big beer’s creep into craft’s space started in 2011 when AB InBev snapped up Chicago indie brewery Goose Island for £24m. Four years later in the UK, the Greenwich-based Meantime brewery was acquired by SAB Miller – the world’s second-largest brewer – for an undisclosed amount. Soon after, Camden Town became another AB InBev acquisition, for £85m. In November 2017, just four years after the company was founded, Brixton Brewery sold a 49% stake to Heineken. And less than a month after the backlash against Beavertown’s ‘sell out’, the south London brewery Fourpure announced it had sold its business to the giant Australian beverage company Lion.
Craft beer drinkers have long voiced their objection to these moves by multinational corporations. Tweets following the news of Beavertown’s sale ranged from ‘RIP Beavertown,’ to ‘Beavertown now part owned by a company that sells cat’s piss. Sad times’. Beyond the Twitter tantrums, independent bottle shops argue that they already operate on razor-thin margins and that these deals are straining their bottom lines even further.
Sometimes it can be difficult to sympathise with small breweries and bottle shops when they’ve been tapping into a sector where people will pay through the nose for products. Craft beers are commonly priced at around £3 per 330ml can, and in August 2017, The Rake pub in Bermondsey priced a pint of Cloudwater brewery’s North West Double IPA at £13.40. Still, people drank up.
Bottle shops, meanwhile, which specialise in selling a wide variety of craft beers, have become a more common feature on high streets. Whenever a buyout from a big brewery happens, ‘it drives down the price of craft beer,’ Jen Ferguson, Hop Burns and Black’s founder argues. ‘It’s more and more challenging for an independent retailer.’ With the boost from Heineken, it won’t be long before Beavertown is available more cheaply in most major supermarkets. ‘[It creates] an unfair pricing expectation,’ Ferguson adds.
Despite dropping such a popular product, Ferguson says Hop Burns and Black had overwhelming support for its decision to cut ties with Beavertown. The silver lining for customers is that this newly empty shelf space can now be filled by less familiar breweries, which will hopefully become new favourites. ‘What we’re doing at the moment is migrating people over to alternatives.’
She says the shop is in active discussions with Brick Brewery (based in Peckham, south east London) and Gypsy Hill brewery (also in south east London) to agree a balance between order volumes and pricing which will allow the shop to offer a comparable alternative to Beavertown.
It’s not only through variety that bottle shops are hoping to keep supermarkets at bay. Experience is everything in retail, and these shops have made sure they offer a lot of it. Hop Burns and Black doesn’t just sell beer; it sells hot sauces and records, too.
‘People get obsessive about craft beers. They also get obsessive about hot sauce and records,’ she says. ‘That was the reasoning behind our product mix.’ More importantly, Ferguson made sure the shop could facilitate drinking in: ‘Customers can buy a beer and run home or they can sit outside with a nice lager on a hot sunny day.’
Similarly, Mother Kelly’s bottle shop in Bethnal Green looks more like a bar. Fridges line its walls, where beer can be purchased to drink in or take away, and a small number of taps serve beer.
Bottle shops can also score points against supermarkets when it comes down to product knowledge. Beer sommelier and author of The Little book of Craft Beer, Melissa Cole argues that ‘supermarkets should treat their beer better’. ‘It sits on ambient shelves and in ambient warehousing, cooking away. There are limited amounts of information about beer, staff aren’t trained on it, they don’t cross-pollinate meal deals. I could go on.’
Will Jack, co-founder of Clapton Craft, which opened its first bottle shop on Lower Clapton road in 2013, agrees that people are key to running a successful bottle shop.
‘You might spend 10 minutes with someone and sell them two beers,’ Jack says. ‘It’s about really developing a relationship with the customers. Everyone who comes into the shop should have a good experience.’
‘Our customers are always going to look to someone to guide them, to deliver on the trends they know about and the ones they don’t,’ Ferguson adds.
The Hop Hideout opened in Sheffield’s Antiques Quarter in November 2013. Alongside bottles and cans, it has five taps for serving draft beer and filling up ‘flagons’ (reusable bottles) and a ‘tasting table’ that can seat 10 people.
‘That conversation over a beer is really important for us,’ Jules Gray, the shop’s founder, says. She isn’t simply running a shop, either. Hop Hideout has positioned itself at the heart of Sheffield’s beer drinking community (even though the store itself is on the outskirts of town), with a running club, monthly ‘meet the brewer’ sessions, and Sheffield Beer Week.
‘In the independent beer sector, and it’s as much for the bottle shops as it is for the breweries, you’ve got to have your own character, uniqueness and personality,’ she says.
While the bottle shops battle to hold their own against the supermarkets, another (albeit much smaller) threat has been slowly moving in on them: the breweries themselves.
Several craft breweries are starting to open their own tap rooms. Howling Hops and Crate Brewery have created a mini-hub of breweries and bars in London’s Hackney Wick. The ‘Bermondsey Beer Mile’ in south London is home to the tap rooms of Partizan, Brew By Numbers and more. In March 2018, Bristol-based Moor Brewery opened its first ever tap room on the strip. These businesses can offer a comparable experience to the bottle-shop-cum-bar model, offering take-out cans alongside beers straight from the source.
Some have even bolstered their online offering, with Cloudwater brewery in Manchester being the most prominent example of this. Its online shop supports its ‘hype-focused’ business model, whereby it regularly releases limited edition beers that generate buzz among beer fanatics.
‘Online is a threat for small bottle shops setting up and expecting to reap the hyperlocal benefits,’ Ferguson says. ‘[Bottle shops] have got to be able to hold their own online – if not [on] price, they’ve got to beat [breweries] on selection.’
‘Unless their target is to sell 100% direct to customers they’re going to have some on-trade [customers] that they need to have a collaborative relationship with,’ Gray adds.
Hop Burns and Black estimates that 30% of its business takes place online. Ferguson says the type of customer that buys online tends to be on the nerdier end of the scale – someone who wants the latest, rare beers and is afraid they could miss them in the time it takes to walk to the shop.
The take-home beer competition keeps getting more fierce. Indeed, it’s expected that new bottle shops will continue to open up on high streets up and down the UK. ‘I’d hazard that London doesn’t have even 200 independent or small chain bottle shops dedicated to mainly beer,’ Cole says. ‘Given this doesn’t even match the amount of breweries that exist in this metropolis of over eight million people,
I think we’ve got some room for expansion.’