Yorkshire’s independent distillers fight to survive ‘perfect storm’

Saltaire BreweryImage Source, Mark Newton Photography

Saltaire Brewery says it’s “an extremely difficult time to go through”

Independent brewers in the region were saddened but not surprised by news this week that North Yorkshire’s famed Black Sheep Brewery had gone into administration.

Brewery owners say they are being hit by a post-pandemic “perfect storm” of debt, rising costs and uncertain demand.

According to the Independent Brewers Association (SIBA), there are around 1,800 independent breweries in the UK.

BBC News spoke to some people in Yorkshire to find out how they are coping with the economic hardship they are facing.

Great Newson Brewery, East Yorkshire

Image Source, Great Newson Brewery

Matthew Hodgson says the key is adapting to brewing something people can afford

“Raw material costs, energy costs and the impact of the current cost of living crisis on our customers and consumers, that’s probably where we’ve seen the most issues over the past few months,” explained Matthew Hodgson.

The director of Great Newsome Brewery in East Yorkshire said the costs could only be passed on to customers “to a certain extent”.

“The last thing they [customers] Because what is heard repeatedly is that we raise prices to cover costs. “

The 10-employee company opened a new brewery in January 2020, doubling capacity and the small business has survived the pandemic thanks to loyal customers, Mr Hodgson said.

However, he warned that rising costs meant “workers’ drinks” had the potential to become very expensive.

“It’s not something we ever wanted to do and we’ll do our best not to,” he added.

Mr Hodgson said the brewing industry in general was finding it challenging to produce something “people could afford”.

Abbeydale Brewery, Sheffield

Image Source, Mark Newton Photography

Abbeydale Brewery says it faces challenges sourcing equipment

Toby Grattidge, director of operations at Sheffield-based Abbeydale Brewery, agreed there was a limit to how much of the rising costs could be passed on to customers.

“Over the last year and a half, costs have generally gone up by about 15 to 20 percent, and there’s not that much more that people can afford or are willing to pay for beer,” he said.

“Generally, everything you buy goes up.

“Non-energy related stuff has gone up 8 to 11 percent, from pencil to paper.”

They’re lucky to have a flat tariff for their energy, otherwise “the sum would be very, very severe”.

Mr Grattidge said they faced other challenges, including the conflict in Ukraine, which disrupted the supply of components for cooling equipment.

However, he said they were lucky to own their own buildings with little debt, adding that Covid loans were a “lifeline” for many.

“While we are not worried about the future, we are worried about other breweries, trading conditions are far from ideal at the moment, which is very difficult.

“Sheffield’s oldest brewery, Kelham Island Brewery, closed last year.

“It was the first time I had tasted real ale and it was sad when it closed.”

Rooster’s Brewing Co, Harrogate

Image Source, Mark Newton Photography

Ian Fozard says the industry is feeling the impact of rising costs in the short term

In addition to rising costs, the country’s smaller breweries are competing in a market dominated by major global players, said Ian Fozard, SIBA’s North East regional director.

Mr Fozard, who also manages Rooster’s Brewing in Harrogate, North Yorkshire, said: “The problems affecting small breweries are sweeping through.

“They don’t have the economies of scale that the big breweries have, and they don’t have access to the markets that the big breweries have.”

Small independents who want to grow their businesses face an uphill struggle because of the dominance of big companies and the number of pubs that can only buy from a particular brewery, he said.

Rooster’s is one of the larger independents, but like all companies it has felt the impact of increased short-term costs.

“Our malt costs have increased by 41 per cent due to the war in Ukraine and its impact on world grain markets,” Mr Fozard said.

They also see the price of CO2 needed for breweries to bottle or pressurize beer in kegs more than double at some point in 2022 due to reduced production and high demand.

Many contracts also include electricity surcharges that can be very high, Mr Fozard said.

“I saw an invoice yesterday with an 80% fuel surcharge on the CO2 we bought in April, it’s hard to pass all the costs on to the market,” he said.

Saltaire Brewery, West Yorkshire

Image Source, Saltaire Brewery

Ewen Gordon says all their costs have gone up

Ewen Gordon, managing director of Saltaire Brewery in West Yorkshire, said that like any manufacturing industry, the brewing industry had been “very tough”.

Saltaire, who opened a new packaging plant in 2018, said energy prices had a major impact.

“The price of glass … has probably gone up about 60% in the last 18 months because it takes a lot of energy to make glass.”

Saltaire is a medium-sized brewery with 35 employees producing 2 million liters of beer per year.

Mr Gordon said the surge in independent winemaking in recent decades meant increased competition in a market that hadn’t expanded.

“The amount of beer you drink is static,” he said.

What has changed, he says, is the behavior of beer drinkers in choosing where and how they drink.

There have also been instances of price cuts, with people opting for cheaper products regardless of brand loyalty, he said.

“It’s a very difficult time,” he added.

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