The Northern Monk Refectory in Leeds has become a go-to destination for fans of good beer, local or otherwise. An integral part of the brewery’s operation, 16 keg lines and two cask lines dispense beer from one of the UK’s leading lights, as well their sought after collaborations with breweries from across the globe.
Rewind four years and the same brewery addressed questions about where its beer was brewed. The answer was Hambleton Ales in North Yorkshire.
“This means our beer is brewed by us, based on our recipe but we do not own the equipment that we use to brew it,” they explained. “This method of brewing does not define us, it is not who we are, it is where we are at.”
But it was an arrangement that suited the team at that point in time, allowing them to build the solid foundations upon which they sit today. And across the pond in North America, companies such as Evil Twin and Grimm Artisanal Ales are investing in breweries in Queens and Brooklyn, respectively while Mikkeller is building upon its San Diego facility with a presence at the Citi Field stadium.
Closer to home, we spoke to the UK’s leading contract brewers to learn how they challenge preconceptions about contract brewed beer, the changing demands placed upon them and the role they play in getting new brewers off the ground.
TBJ: There are many preconceptions that still exist when it comes to contract brewed beer. That it may be in some way inferior to the beer made at a brewer’s own brewery. Or that the brewer in question may be somewhat less committed or credible than their bricks and mortar peers. What do you tell potential customers or detractors when these statements arise?
Tracy Sambrook, managing director of South East Bottling, explains: “I would actually say that this is often the exact opposite because the contract brewing and bottling/canning services we offer are from experienced, quality-focused and highly skilled breweries, rather than from someone new to the industry.
“It can work on so many levels since an organisation looking for a contract brewing partner will know what they want to achieve in terms of style, focus, taste and the experienced contract brewer can interpret that direction and add value from their years of brewing experience. Our contract brewing partners are more than credible – with deep experience, having more than 24 years combined brewing experience!
“I think that the industry should challenge the pre-conception that anyone can produce great beer. Producing great beer comes from years of experience and that is what a contract brewer and packager can offer.
“In terms of the credibility of our contract customers we have seen that as the market has become more crowded, new entrants are looking at specialising and creating niches. This does not mean that they are less committed but taking a new perspective on how to enter the market and with so many breweries in the UK, testing new products through contract brewing would seem a much more credible way to enter the marketplace. The key to making this a success is to work with our customers in partnership. We find that our customers value the quality of our end-to-end offering of contract brewing and bottling/canning and the expertise that we bring to this relationship.”
Ben Hambleton, brewery manager at Hambleton Ales, says: “At Hambleton we brew our own beers, as well as contract brewing for other breweries. We don’t treat the beers differently here, and treat every brew as if it is our own. We aren’t huge, but our 20BBL plant means that we do have more capacity than a lot of the very small brewers across the UK. Our brews are still very manual, involve lots of hard work and significant brewing skill. Our customers can also be incredibly demanding, and we can’t afford to skimp on quality of ingredients or on the brew itself – the beer has to be right or we won’t get paid!”
For Dr Keith Thomas, director at Brewlab, he explains: “I think that this raises the issue of the variability of brewing generally – and that’s not limited to the craft brew arena, international brewers have difficulties matching their beers around the world. Breweries and brewers differ – in fact it’s not impossible that a contract brew could be better or more consistent than the original. Craft beers with strong and distinctive flavours are even more susceptible than standard brands to variability of brew kit, ingredient sources, production management and fermentation control.
“Our approach at Brewlab is to have very tight specifications on each of these along with accurate analyses of the parameters to provide confidence that the targets are met. We also have the confidence to say no when the requests are too extreme like if we were asked to produce a direct match of Chimay Blue or even John Smiths. Drinkers committed to a popular brand will soon pick up the difference.”
Camerons director and general manager Chris Soley, adds: “To the contrary, our approach towards brewing third party beers is to aim to achieve quality and flavour to the same specifications as the owner brewer. We pride ourselves on our contract brewing reputation and we have often been credited with producing beers for other brewers that surpass their own standards. As well as being accredited to ISO9000 and BRC grade “AA”, we need to achieve the individual quality standards of all of our national and international partners which means we can learn from each of them and adopt best practice from each of our customers.
“This has ensured a continuous improvement in our quality and service levels, growing our contract brewing business through reputation, thus supporting significant investment in new technology, flexibility and continual improvement. Contract brewing makes up 95% of our business and we are absolutely 100% committed to achieving consistent beer which replicates exactly the beer brewed at the brewer’s own brewery.”
Chris Wilson, sales at Keltek Brewery concludes: “We put just the same effort into Contract Brewed beer as our own, fair enough the drinking public may not necessarily know it was us that made it, but like in any industry – bad news travels, FAST! We work hard to make sure we are putting out consistently great beer, no matter who’s it actually is. Our head brewer, Rob Jones, is very particular with all process and a stickler for continuous improvement.”
Marketing over Brewing?
TBJ: A contract brewer is more likely to spend their time marketing beer than looking at brewing it. What are you thoughts on this? Can that be the case? And does it matter?
Tracy Sambrook: “So long as quality is at the heart of the product, I don’t think that it matters where our customers focus is. Our contract customers are often consumer-led experts, with sector experience, who recognises the skill, investment and rigour required to brew and wants to play to their strengths by focusing on brand-building, routes-to-market and distribution. In a fast-changing sector, focusing on strengths to grow quickly is the way to create value and we can provide a scalable solution that supports their objectives.
Many have plans to build a brewery and want to establish consumer demand before they do so, rather than the path of marketing a product that has been possibly years in development.
“Establishing a brand (i.e. demand) in parallel to working with an experienced contract brewing partner who can deliver the style and quality gets the contract brewer to market quickly – a market that is evolving rapidly as consumers tastes broaden. Beer is a consumer product so whilst a contract brewer can go so far with branding, ultimately the “proof is in the pudding” and consumers recognise quality – what SEB offers through its contract brewing and packaging partnerships.”
Ben Harrison: “People contract brew for a number of reasons, but one of those certainly is that they want to spend their time on other things. I don’t think this is a problem though.. and is far better than a stressed out brewer putting out mediocre beer because they are stressed trying to juggle sales, marketing and deliveries. By contract brewing you can concentrate on building a business and developing sales, without needing to also be brewing 9 hours a day 7 days a week. By choosing the correct contract brewer you can end up with beer being brewed to your recipe, but by very experienced and dedicated brewers.. who have the time to make sure it is perfect.”
Dr Keith Thomas: “That can certainly be true and not a few breweries have been started by marketing experts with limited involvement in production. This can work but you need to know more than how to design a good label to be sure the beer will survive. Drinkers demand more information than ever and a beer with limited substance won’t have a long track record. I think the ideal today is to have the passion in production matched with a sound awareness of what customers will genuinely enjoy rather than respond to some transient hype.
“This means getting rigorous feedback from blind tastings rather than passing bottles round the bar. Production and marketing can be achieved in a single person business but it gets difficult as sales grow. Having a partner, a consultant or senior manager with skills and experience of the market is increasingly essential for development.
“Of course, marketing can get lost up its own bottom if put out of context. We once worked with a brewery who commissioned a marketing company to draft a name for a low alcohol beer highlighting the low but in a lively manner. The resulting “Low Life” suggestion from the focus group also had limited life.”
Chris Soley: “We spend very little resource on marketing of our contract brewing facility. Our brewing partnerships have been built through the years by word of mouth, networking and reputation. Our resource is significantly weighted towards the technical team, engineering and production where we continually invest in people and equipment to achieve consistently improving quality contract brewed products.”
Chris Wilson: “Perhaps small business’s will be able to better use their time marketing instead of brewing but at the end of the day they are still paying a wage to the brewer. At the end of the day a start up business always has very tight cash flow however they start production.”
Changing demands
TBJ: How have demands on contract brewers changed in recent years? What trends are you witnessing from potential and existing customers? Equally, how are you reacting to them?
Tracy Sambrook: “We work with a broad range of customers, from experienced capacity constrained breweries, to excited new entrants to the beer market, but the one thing that all of our customers share is their demand for quality and flexibility. At SEB we can offer not just the experience to create any beer style that our customer demands but we also have the packaging solutions to be able to translate that beer into something that is eye catching and unique in the market place. We see this trend of increased flexibility only growing as our customers trial unique product offerings to the UK brewing market.
Ben Harrison: “One of the benefits to us of contract brewing is that we are exposed to new ideas and trends at an early stage, which ultimately feed into our own brewing. The recent rise of Craft has certainly seen some changes, and the styles of beers we are brewing and the final packages we are filling are more varied than ever– however the demands haven’t changed, and at the end of the day our customers still require great ingredients, and high quality beer.”
Dr Keith Thomas: “The major change does seem to be the increase in start up contracts in recent years and addressing novel areas of the market. Ten or more years ago contract brewing was a feature to expand production before installing new plant – say in response to an award or to cover a period of illness or maintenance. Matching was a major issue and variably achieved. Today it is a route to test the market before committing to equipment and also to test beers with novel ingredients and character.
“For ourselves at Brewlab we need to have a good range of production options particularly yeasts for novel fermentations and packaging for display presentations. It is important to discuss and agree expectations as some ingredients may well affect standard beer features – haze, head formation, colour, carbonation, flavour stability or gluten levels. Bottle conditioning is a particularly difficult demand if the specifications are atypical.”
Chris Soley: “There has been a particular focus on continuous improvement both from a cost perspective and within quality parameters. For example accepted Oxygen levels in final beer have been driven down by customers substantially over the last few years.
“We have implemented a continuous improvement agenda to support this requirement and are on a journey towards world class manufacturing standards. We have a focus on lean manufacturing and 5 “S” having trained all production personnel in NVQ level 3 lean manufacturing techniques and level 4 for team leaders. CI is now being integrated into the day to day environment in a way that Health and Safety was decades ago. We have also invested in new equipment to support these improvements. A new bottling plant and a replacement conversion vessel have been installed in the last 2 years at a cost of c£2.5m. In addition to this we invest around £500k per year in capital as well as £1.5m in engineering revenue.
“The vast change in product ranges driven by consumer trends is also meaning that our customers are demanding a greater flexibility. A greater product range and final pack formats is meaning investment in vessels, yeast handling and filling equipment for large and small pack.”
Chris Wilson: “The demand for contract brewing has definitely grown in the last few years, This is only natural, the craft/real beer wave is one that a lot of people want to get on, contract brewing offers that opportunity with minimal capital costs.”
Potential Pitfalls
TBJ: “What key advice do you have for a brewer looking to partner with a contract brewer? What are the potential pitfalls they can avoid when taking those first steps?”
Tracy
Sambrook: “Some of the key areas I would recommend prospective customer to understand would be: Understand what you want from your contract brewing partner. Our most successful customers have a clear vision and understanding of the product that they are wanting to create and we help them achieve that vision; Take ownership in the process, we aim to create the best product for our customers but the more our customers put into the process the more they will get out of it; Don’t be afraid to ask questions – we have plenty of experience and there may be other solutions that you may not have considered.
“Don’t neglect the regulatory side of the process – we all know how much regulation surrounds beer and just because you are not brewing does not mean that you are not subject to these regulations! Understand your marketplace – who are you selling to, how will you get it to market? Again, some of our most successful customers have already buttoned this down before they have started brewing with us.”
Ben Harrison: “Think about the whole journey all the way to final package. You may find a great brewer, but if you are then having to ship your beer somewhere else for packaging then you are increasing costs and risking the quality of the beer. By keeping it all under the same roof the contract brewer can control everything, and be responsible for quality throughout the full process. Also, it is really important to choose a brewery with a recognised industry accreditation. Salsa plus Beer, which is recognised by Cask Marque is a good example. Breweries with this accreditation are subject to annual auditing, and have to conform to a rigorous quality standards. If you aren’t brewing the beer yourself, knowing that an outside body regular checks on your brewer and packaging provider can give you peace of mind and prevent future quality issue.”
Dr Keith Thomas: “Knowledge and experience are definitely key. Judge these by the brewery credentials, brewer background, training and reputation of the beers. Ask for recommendations from past customers. How good are the regular beers produced, how consistent are they and how well managed is the quality assurance? Ask to see what records are kept of the production process and the beer analysis. The more detailed records the better and check that the analysis includes abv and gravity by a reputable standard method or laboratory along with indicators of consistency – pH, colour and ideally bitterness.
“Also, to test carbonation from package. If you commit to a contract make sure that you and the company process samples for shelf life by incubating at warm temperature (27 – 30oC) to anticipate problems in advance. Also make sure that any changes made to the specification are clearly understood as the initial production conditions may not suit new targets. In fact, make sure that there is a clear written contract – telephone agreements are legal torture if problems arise. Don’t just trust to your tasting abilities good as they may be – get access to a microscope to check microbial contamination if problems are suspected – you need the evidence in front of your eyes not an argument over who has the best taste credentials.”
Chris Soley: “It is important to share as much information as possible early on in the relationship. Detailed technical specifications and any specific brewing parameters will ensure that requirements are quickly understood and flush out any early challenges. It is important to view the relationship as a partnership and be as open as possible from the onset. Be clear and honest about sales volumes so that a transparent judgement can be made as to the capability and suitability of the partnership both current and future. Expectations of standards throughout the supply chain including planning, warehousing, logistics etc. should be discussed early on. Often these are left to the end and can create challenges too late in the day.”
Chris Wilson: “Be fussy. Your name is on the bottle. You’re the one who will get the complaints and bad name from the general public. Read the small print. We use it.”
SUSTAINABLE SOLUTION
TBJ: “Previous press on contract brewing calls it “not only a great startup strategy for aspiring brewers, but also a sustainable solution for brewers looking to expand”. How does your company do this?”
Tracy Sambrook: “Absolutely and we are now regularly working with partners who are as you describe “bricks and mortar” brewers – they have a recipe and they may have brewed it themselves but they are out-growing capacity or want one-off, specialist runs and our services are perfect for these customers as well. Because of our 24 years combined experience, we understand the growth challenges these established brewers are facing. Our brewers are established in the industry and are award winners in their own right so our ability to work with established brewers is unquestionable.”
Ben Harrison: “There are a huge number of breweries across the UK who have started their lives at Hambleton, including some very big well-known names.. many have now grown much bigger than us. By starting at Hambleton it enabled them to develop a business and build a customer base, before worrying about building themselves a brewery. I’m sure that the breweries they ended up building are far better than they would have been, and far better sized, then if they had built them before they understood the market and their customers.
“Similarly we also do a lot of brewing for contract brew for breweries who are expanding, or who are renovating and having new kit installed. This enables them to consistently trade, and not lose customers during the periods that they cant produce. In such a competitive and consumer led market, this is really important.”
Dr Keith Thomas: “It certainly can cover both of these options and is increasingly a popular way to test the market – or even as a long term business plan. We outsource plenty of other services so why not the production element?
“One difficulty is to then convince customers that your products have a competent background and have been developed with skill and knowledge – in essence that you really know what you are talking about when you describe your brew. Simple errors such as not knowing that stouts are brewed with roast barley or that Maris Piper is a potato rather than a malt are examples I remember from interviews. I suppose education is an issue here and having a qualification such as the IBD certificate or diploma as well as a Beer Academy certificate would help. Naturally we provide this as part of our on site or distance learning programmes.
”
Chris Soley: “We have developed new products for brand owning companies with no aspirations for brewing the beer at all. A recent example of this is “Skinny” beer which is a low calorie, Gluten free and vegan friendly product. We have allowed that business to develop a market from scratch and has now grown substantial volumes through major retailers through both the on and off trade.
“Recently we have used our small scale microbrewery to develop a new beer for an aspiring brewer who has ambitions to invest in his own brewery if the product succeeds in the marketplace. Without our support, the barriers to entry in terms of capital expenditure on plant and equipment would have been too high and the idea would never have been able to get off the ground. Equally, we have supported smaller brewers who might have the opportunity for periodic listings in major pub groups of supermarkets but doesn’t currently justify a brewery expansion for them. We can deliver a solution which allows them to grow their brands to a level which eventually allows them to invest. We act as a contingency for emergencies through to a platform for future growth and have seen several successful brands grow from initial concept.”
Chris Wilson: “For us, this is a great way of filling in the blanks, like it or not, there are gaps in production schedules and it gives us that slot to fill. We work with start up companies to allow them the entrance to market without the colossal start up costs of a brewery, however, this has to be tied up in contracts that from the moment they say go, they are responsible for taking the finished article. No cold feet allowed.”
CONSTANT GROWTH
TBJ: “Do you expect this field to keep growing as many breweries continue to outgrow their often modest sites? Or are we reaching a plateau in both the number of breweries opening and the rate at which they are growing?”
Tracy Sambrook: “Growth in the industry is great for all of us so of course we are supportive. Our focus is quality for both packing and brewing and therefore we want to see growth in quality products. I think its fair to say we are less enthusiastic about poor quality products entering the market and lowering the consumer bar and taste expectations.”
Ben Harrison: “Whenever we think that we have a reached a plateau as to the number of breweries opening, we then receive another flurry of enquiries which makes us change our minds. The one thing we can offer all breweries, whether new or established, is additional flexibility to how their business opperates. In such a dynamic industry as brewing, where sudden large orders can come out of nowhere, flexibility is really important. We help our customers be able to say YES to their customer.. and I think there will always be a need for this.”
Dr Keith Thomas: “This is a perpetual question and a concern which has been asked since the microbrewery movement started. It never seems to reach the top despite variable trading conditions. To the industry’s great credit it seems that there are continual innovations which provide new avenues of activity. Pub breweries developed from stand-alone breweries, craft developed from cask and now it seems that retail additions either physically or web based may provide further expansion. Some of the increase recently seems to be in the nano brewery scale but most breweries seem to expand rapidly and I suspect the overall increase is still by taking share from the larger producers. Profitability is another matter and quite a few are probably carrying on for the joy of brewing than looking to fund an early retirement!”
Chris Soley: “As long as the market changes, there will always be a place for contract brewing. Volumes and styles consumed, number of products available and the number of breweries is, and will continue to constantly change. Cost pressures on supply chain and exchange rates are other examples of reasons people have opted to use a contract brewing partner.The UK production footprint will continually need to change as a result, and therefore contract brewing is necessary to support this change in both a growth and decline market. Whilst the needs for contract brewing will ebb and flow, there will certainly be a need.”
Chris Wilson: “I can see the need growing but I can also see the more successful smaller breweries being subject to buy outs and then being enveloped by their owning company and production going off site. At some point in the future I believe we will reach saturation to some extent. There’s only so many glasses to fill.”
The Contract Brewing Conundrum
The Northern Monk Refectory in Leeds has become a go-to destination for fans of good beer, local or otherwise. An integral part of the brewery’s operation, 16 keg lines and two cask lines dispense beer from one of the UK’s leading lights, as well their sought after collaborations with breweries from across the globe. Rewind four years and the same brewery addressed questions about where its beer was brewed. The answer was Hambleton Ales in North Yorkshire.
“This means our beer is brewed by us, based on our recipe but we do not own the equipment that we use to brew it,” they explained. “This method of brewing does not define us, it is not who we are, it is where we are at.”
But it was an arrangement that suited the team at that point in time, allowing them to build the solid foundations upon which they sit today. And across the pond in North America, companies such as Evil Twin and Grimm Artisanal Ales are investing in breweries in Queens and Brooklyn, respectively while Mikkeller is building upon its San Diego facility with a presence at the Citi Field stadium.
Closer to home, we spoke to the UK’s leading contract brewers to learn how they challenge preconceptions about contract brewed beer, the changing demands placed upon them and the role they play in getting new brewers off the ground.
TBJ: There are many preconceptions that still exist when it comes to contract brewed beer. That it may be in some way inferior to the beer made at a brewer’s own brewery. Or that the brewer in question may be somewhat less committed or credible than their bricks and mortar peers. What do you tell potential customers or detractors when these statements arise?
Tracy Sambrook, managing director of South East Bottling, explains: “I would actually say that this is often the exact opposite because the contract brewing and bottling/canning services we offer are from experienced, quality-focused and highly skilled breweries, rather than from someone new to the industry.
“It can work on so many levels since an organisation looking for a contract brewing partner will know what they want to achieve in terms of style, focus, taste and the experienced contract brewer can interpret that direction and add value from their years of brewing experience. Our contract brewing partners are more than credible – with deep experience, having more than 24 years combined brewing experience!
“I think that the industry should challenge the pre-conception that anyone can produce great beer. Producing great beer comes from years of experience and that is what a contract brewer and packager can offer.
“In terms of the credibility of our contract customers we have seen that as the market has become more crowded, new entrants are looking at specialising and creating niches. This does not mean that they are less committed but taking a new perspective on how to enter the market and with so many breweries in the UK, testing new products through contract brewing would seem a much more credible way to enter the marketplace. The key to making this a success is to work with our customers in partnership. We find that our customers value the quality of our end-to-end offering of contract brewing and bottling/canning and the expertise that we bring to this relationship.”
Ben Hambleton, brewery manager at Hambleton Ales, says: “At Hambleton we brew our own beers, as well as contract brewing for other breweries. We don’t treat the beers differently here, and treat every brew as if it is our own. We aren’t huge, but our 20BBL plant means that we do have more capacity than a lot of the very small brewers across the UK. Our brews are still very manual, involve lots of hard work and significant brewing skill. Our customers can also be incredibly demanding, and we can’t afford to skimp on quality of ingredients or on the brew itself – the beer has to be right or we won’t get paid!”
For Dr Keith Thomas, director at Brewlab, he explains: “I think that this raises the issue of the variability of brewing generally – and that’s not limited to the craft brew arena, international brewers have difficulties matching their beers around the world. Breweries and brewers differ – in fact it’s not impossible that a contract brew could be better or more consistent than the original. Craft beers with strong and distinctive flavours are even more susceptible than standard brands to variability of brew kit, ingredient sources, production management and fermentation control.
“Our approach at Brewlab is to have very tight specifications on each of these along with accurate analyses of the parameters to provide confidence that the targets are met. We also have the confidence to say no when the requests are too extreme like if we were asked to produce a direct match of Chimay Blue or even John Smiths. Drinkers committed to a popular brand will soon pick up the difference.”
Camerons director and general manager Chris Soley, adds: “To the contrary, our approach towards brewing third party beers is to aim to achieve quality and flavour to the same specifications as the owner brewer. We pride ourselves on our contract brewing reputation and we have often been credited with producing beers for other brewers that surpass their own standards. As well as being accredited to ISO9000 and BRC grade “AA”, we need to achieve the individual quality standards of all of our national and international partners which means we can learn from each of them and adopt best practice from each of our customers.
“This has ensured a continuous improvement in our quality and service levels, growing our contract brewing business through reputation, thus supporting significant investment in new technology, flexibility and continual improvement. Contract brewing makes up 95% of our business and we are absolutely 100% committed to achieving consistent beer which replicates exactly the beer brewed at the brewer’s own brewery.”
Chris Wilson, sales at Keltek Brewery concludes: “We put just the same effort into Contract Brewed beer as our own, fair enough the drinking public may not necessarily know it was us that made it, but like in any industry – bad news travels, FAST! We work hard to make sure we are putting out consistently great beer, no matter who’s it actually is. Our head brewer, Rob Jones, is very particular with all process and a stickler for continuous improvement.”
Marketing over Brewing?
TBJ: A contract brewer is more likely to spend their time marketing beer than looking at brewing it. What are you thoughts on this? Can that be the case? And does it matter?
Tracy Sambrook: “So long as quality is at the heart of the product, I don’t think that it matters where our customers focus is. Our contract customers are often consumer-led experts, with sector experience, who recognises the skill, investment and rigour required to brew and wants to play to their strengths by focusing on brand-building, routes-to-market and distribution. In a fast-changing sector, focusing on strengths to grow quickly is the way to create value and we can provide a scalable solution that supports their objectives.
Many have plans to build a brewery and want to establish consumer demand before they do so, rather than the path of marketing a product that has been possibly years in development.
“Establishing a brand (i.e. demand) in parallel to working with an experienced contract brewing partner who can deliver the style and quality gets the contract brewer to market quickly – a market that is evolving rapidly as consumers tastes broaden. Beer is a consumer product so whilst a contract brewer can go so far with branding, ultimately the “proof is in the pudding” and consumers recognise quality – what SEB offers through its contract brewing and packaging partnerships.”
Ben Harrison: “People contract brew for a number of reasons, but one of those certainly is that they want to spend their time on other things. I don’t think this is a problem though.. and is far better than a stressed out brewer putting out mediocre beer because they are stressed trying to juggle sales, marketing and deliveries. By contract brewing you can concentrate on building a business and developing sales, without needing to also be brewing 9 hours a day 7 days a week. By choosing the correct contract brewer you can end up with beer being brewed to your recipe, but by very experienced and dedicated brewers.. who have the time to make sure it is perfect.”
Dr Keith Thomas: “That can certainly be true and not a few breweries have been started by marketing experts with limited involvement in production. This can work but you need to know more than how to design a good label to be sure the beer will survive. Drinkers demand more information than ever and a beer with limited substance won’t have a long track record. I think the ideal today is to have the passion in production matched with a sound awareness of what customers will genuinely enjoy rather than respond to some transient hype.
“This means getting rigorous feedback from blind tastings rather than passing bottles round the bar. Production and marketing can be achieved in a single person business but it gets difficult as sales grow. Having a partner, a consultant or senior manager with skills and experience of the market is increasingly essential for development.
“Of course, marketing can get lost up its own bottom if put out of context. We once worked with a brewery who commissioned a marketing company to draft a name for a low alcohol beer highlighting the low but in a lively manner. The resulting “Low Life” suggestion from the focus group also had limited life.”
Chris Soley: “We spend very little resource on marketing of our contract brewing facility. Our brewing partnerships have been built through the years by word of mouth, networking and reputation. Our resource is significantly weighted towards the technical team, engineering and production where we continually invest in people and equipment to achieve consistently improving quality contract brewed products.”
Chris Wilson: “Perhaps small business’s will be able to better use their time marketing instead of brewing but at the end of the day they are still paying a wage to the brewer. At the end of the day a start up business always has very tight cash flow however they start production.”
Changing demands
TBJ: How have demands on contract brewers changed in recent years? What trends are you witnessing from potential and existing customers? Equally, how are you reacting to them?
Tracy Sambrook: “We work with a broad range of customers, from experienced capacity constrained breweries, to excited new entrants to the beer market, but the one thing that all of our customers share is their demand for quality and flexibility. At SEB we can offer not just the experience to create any beer style that our customer demands but we also have the packaging solutions to be able to translate that beer into something that is eye catching and unique in the market place. We see this trend of increased flexibility only growing as our customers trial unique product offerings to the UK brewing market.
Ben Harrison: “One of the benefits to us of contract brewing is that we are exposed to new ideas and trends at an early stage, which ultimately feed into our own brewing. The recent rise of Craft has certainly seen some changes, and the styles of beers we are brewing and the final packages we are filling are more varied than ever– however the demands haven’t changed, and at the end of the day our customers still require great ingredients, and high quality beer.”
Dr Keith Thomas: “The major change does seem to be the increase in start up contracts in recent years and addressing novel areas of the market. Ten or more years ago contract brewing was a feature to expand production before installing new plant – say in response to an award or to cover a period of illness or maintenance. Matching was a major issue and variably achieved. Today it is a route to test the market before committing to equipment and also to test beers with novel ingredients and character.
“For ourselves at Brewlab we need to have a good range of production options particularly yeasts for novel fermentations and packaging for display presentations. It is important to discuss and agree expectations as some ingredients may well affect standard beer features – haze, head formation, colour, carbonation, flavour stability or gluten levels. Bottle conditioning is a particularly difficult demand if the specifications are atypical.”
Chris Soley: “There has been a particular focus on continuous improvement both from a cost perspective and within quality parameters. For example accepted Oxygen levels in final beer have been driven down by customers substantially over the last few years.
“We have implemented a continuous improvement agenda to support this requirement and are on a journey towards world class manufacturing standards. We have a focus on lean manufacturing and 5 “S” having trained all production personnel in NVQ level 3 lean manufacturing techniques and level 4 for team leaders. CI is now being integrated into the day to day environment in a way that Health and Safety was decades ago. We have also invested in new equipment to support these improvements. A new bottling plant and a replacement conversion vessel have been installed in the last 2 years at a cost of c£2.5m. In addition to this we invest around £500k per year in capital as well as £1.5m in engineering revenue.
“The vast change in product ranges driven by consumer trends is also meaning that our customers are demanding a greater flexibility. A greater product range and final pack formats is meaning investment in vessels, yeast handling and filling equipment for large and small pack.”
Chris Wilson: “The demand for contract brewing has definitely grown in the last few years, This is only natural, the craft/real beer wave is one that a lot of people want to get on, contract brewing offers that opportunity with minimal capital costs.”
Potential Pitfalls
TBJ: “What key advice do you have for a brewer looking to partner with a contract brewer? What are the potential pitfalls they can avoid when taking those first steps?” Tracy
Sambrook: “Some of the key areas I would recommend prospective customer to understand would be: Understand what you want from your contract brewing partner. Our most successful customers have a clear vision and understanding of the product that they are wanting to create and we help them achieve that vision; Take ownership in the process, we aim to create the best product for our customers but the more our customers put into the process the more they will get out of it; Don’t be afraid to ask questions – we have plenty of experience and there may be other solutions that you may not have considered.
“Don’t neglect the regulatory side of the process – we all know how much regulation surrounds beer and just because you are not brewing does not mean that you are not subject to these regulations! Understand your marketplace – who are you selling to, how will you get it to market? Again, some of our most successful customers have already buttoned this down before they have started brewing with us.”
Ben Harrison: “Think about the whole journey all the way to final package. You may find a great brewer, but if you are then having to ship your beer somewhere else for packaging then you are increasing costs and risking the quality of the beer. By keeping it all under the same roof the contract brewer can control everything, and be responsible for quality throughout the full process. Also, it is really important to choose a brewery with a recognised industry accreditation. Salsa plus Beer, which is recognised by Cask Marque is a good example. Breweries with this accreditation are subject to annual auditing, and have to conform to a rigorous quality standards. If you aren’t brewing the beer yourself, knowing that an outside body regular checks on your brewer and packaging provider can give you peace of mind and prevent future quality issue.”
Dr Keith Thomas: “Knowledge and experience are definitely key. Judge these by the brewery credentials, brewer background, training and reputation of the beers. Ask for recommendations from past customers. How good are the regular beers produced, how consistent are they and how well managed is the quality assurance? Ask to see what records are kept of the production process and the beer analysis. The more detailed records the better and check that the analysis includes abv and gravity by a reputable standard method or laboratory along with indicators of consistency – pH, colour and ideally bitterness.
“Also, to test carbonation from package. If you commit to a contract make sure that you and the company process samples for shelf life by incubating at warm temperature (27 – 30oC) to anticipate problems in advance. Also make sure that any changes made to the specification are clearly understood as the initial production conditions may not suit new targets. In fact, make sure that there is a clear written contract – telephone agreements are legal torture if problems arise. Don’t just trust to your tasting abilities good as they may be – get access to a microscope to check microbial contamination if problems are suspected – you need the evidence in front of your eyes not an argument over who has the best taste credentials.”
Chris Soley: “It is important to share as much information as possible early on in the relationship. Detailed technical specifications and any specific brewing parameters will ensure that requirements are quickly understood and flush out any early challenges. It is important to view the relationship as a partnership and be as open as possible from the onset. Be clear and honest about sales volumes so that a transparent judgement can be made as to the capability and suitability of the partnership both current and future. Expectations of standards throughout the supply chain including planning, warehousing, logistics etc. should be discussed early on. Often these are left to the end and can create challenges too late in the day.”
Chris Wilson: “Be fussy. Your name is on the bottle. You’re the one who will get the complaints and bad name from the general public. Read the small print. We use it.”
SUSTAINABLE SOLUTION
TBJ: “Previous press on contract brewing calls it “not only a great startup strategy for aspiring brewers, but also a sustainable solution for brewers looking to expand”. How does your company do this?”
Tracy Sambrook: “Absolutely and we are now regularly working with partners who are as you describe “bricks and mortar” brewers – they have a recipe and they may have brewed it themselves but they are out-growing capacity or want one-off, specialist runs and our services are perfect for these customers as well. Because of our 24 years combined experience, we understand the growth challenges these established brewers are facing. Our brewers are established in the industry and are award winners in their own right so our ability to work with established brewers is unquestionable.”
Ben Harrison: “There are a huge number of breweries across the UK who have started their lives at Hambleton, including some very big well-known names.. many have now grown much bigger than us. By starting at Hambleton it enabled them to develop a business and build a customer base, before worrying about building themselves a brewery. I’m sure that the breweries they ended up building are far better than they would have been, and far better sized, then if they had built them before they understood the market and their customers.
“Similarly we also do a lot of brewing for contract brew for breweries who are expanding, or who are renovating and having new kit installed. This enables them to consistently trade, and not lose customers during the periods that they cant produce. In such a competitive and consumer led market, this is really important.” Dr Keith Thomas: “It certainly can cover both of these options and is increasingly a popular way to test the market – or even as a long term business plan. We outsource plenty of other services so why not the production element?
“One difficulty is to then convince customers that your products have a competent background and have been developed with skill and knowledge – in essence that you really know what you are talking about when you describe your brew. Simple errors such as not knowing that stouts are brewed with roast barley or that Maris Piper is a potato rather than a malt are examples I remember from interviews. I suppose education is an issue here and having a qualification such as the IBD certificate or diploma as well as a Beer Academy certificate would help. Naturally we provide this as part of our on site or distance learning programmes. ”
Chris Soley: “We have developed new products for brand owning companies with no aspirations for brewing the beer at all. A recent example of this is “Skinny” beer which is a low calorie, Gluten free and vegan friendly product. We have allowed that business to develop a market from scratch and has now grown substantial volumes through major retailers through both the on and off trade.
“Recently we have used our small scale microbrewery to develop a new beer for an aspiring brewer who has ambitions to invest in his own brewery if the product succeeds in the marketplace. Without our support, the barriers to entry in terms of capital expenditure on plant and equipment would have been too high and the idea would never have been able to get off the ground. Equally, we have supported smaller brewers who might have the opportunity for periodic listings in major pub groups of supermarkets but doesn’t currently justify a brewery expansion for them. We can deliver a solution which allows them to grow their brands to a level which eventually allows them to invest. We act as a contingency for emergencies through to a platform for future growth and have seen several successful brands grow from initial concept.”
Chris Wilson: “For us, this is a great way of filling in the blanks, like it or not, there are gaps in production schedules and it gives us that slot to fill. We work with start up companies to allow them the entrance to market without the colossal start up costs of a brewery, however, this has to be tied up in contracts that from the moment they say go, they are responsible for taking the finished article. No cold feet allowed.”
CONSTANT GROWTH
TBJ: “Do you expect this field to keep growing as many breweries continue to outgrow their often modest sites? Or are we reaching a plateau in both the number of breweries opening and the rate at which they are growing?”
Tracy Sambrook: “Growth in the industry is great for all of us so of course we are supportive. Our focus is quality for both packing and brewing and therefore we want to see growth in quality products. I think its fair to say we are less enthusiastic about poor quality products entering the market and lowering the consumer bar and taste expectations.”
Ben Harrison: “Whenever we think that we have a reached a plateau as to the number of breweries opening, we then receive another flurry of enquiries which makes us change our minds. The one thing we can offer all breweries, whether new or established, is additional flexibility to how their business opperates. In such a dynamic industry as brewing, where sudden large orders can come out of nowhere, flexibility is really important. We help our customers be able to say YES to their customer.. and I think there will always be a need for this.”
Dr Keith Thomas: “This is a perpetual question and a concern which has been asked since the microbrewery movement started. It never seems to reach the top despite variable trading conditions. To the industry’s great credit it seems that there are continual innovations which provide new avenues of activity. Pub breweries developed from stand-alone breweries, craft developed from cask and now it seems that retail additions either physically or web based may provide further expansion. Some of the increase recently seems to be in the nano brewery scale but most breweries seem to expand rapidly and I suspect the overall increase is still by taking share from the larger producers. Profitability is another matter and quite a few are probably carrying on for the joy of brewing than looking to fund an early retirement!”
Chris Soley: “As long as the market changes, there will always be a place for contract brewing. Volumes and styles consumed, number of products available and the number of breweries is, and will continue to constantly change. Cost pressures on supply chain and exchange rates are other examples of reasons people have opted to use a contract brewing partner.The UK production footprint will continually need to change as a result, and therefore contract brewing is necessary to support this change in both a growth and decline market. Whilst the needs for contract brewing will ebb and flow, there will certainly be a need.”
Chris Wilson: “I can see the need growing but I can also see the more successful smaller breweries being subject to buy outs and then being enveloped by their owning company and production going off site. At some point in the future I believe we will reach saturation to some extent. There’s only so many glasses to fill.”
ARTICLES
Comment | Turn the temperature down on rising costs
Sustainability | It’s time for change
#138 | Lessons in Licensing
Beer Day Britain returns in 2024
PODCASTS