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Brew Small, Think Big

Micro-breweries are booming and Londoners are thirsty for more craft beer. But is it possible to scale up and stay special?

London, it seems, simply can't get enough of the malty, cloudy flavours of its burgeoning micro-brewing industry. You're nobody these days unless you're clutching a brown bottle in your sweaty hand, complete with a little known craft brewer's logo on a pared-back label and a high percentage of alcohol.

For evidence, look no further than the series of craft beer festivals that have popped up in parks and outdoor venues across the capital, all of which see hordes of people happily swigging back micro-brews from across the country. The more obscure and interesting the better – particularly when coupled with artisan street food.

But what happens when a city's insatiable appetite for craft beer means that demand for your humble product, brewed under a leaky railway arch by eight friends whose daily highlight is their lunch of beer and cheese, quickly outstrips supply? Can and will the capital's craft breweries make the transition into major brewers?

It's a Scotsman who can be seen as the catalyst for this brewing revival. Chancellor Gordon Brown oversaw the introduction of the Small Breweries Relief Scheme in 2002, which provides companies that produce no more than 60,000 hectolitres of beer with duty discounts of as much as 50 per cent.

Incentives such as this have seen a wave of newcomers to the industry, with 15 new breweries established in London alone in 2012, and 10 in the first half of this year (figures from London Brewed.) Putting this into sharp context, pre 2000, Fuller, Smith & Turner was the only brewery still operating in London. Far from creating a surplus, many new and established London breweries are still reporting an upsurge in demand, both from consumers, specialist craft beer bars and, increasingly regularly, pubs.

Crate Brewery, Hackney Wick

So therein lies the rub – as a small brewer, your brand is founded on the homespun, niche appeal, but as demand increases the temptation to expand can be strong. But does expansion prove dangerous to the winning formula and erode the very qualities that attract consumers in the first place?

A huge part of the attraction people feel towards craft beers originates in their lo-fi approach. Handcrafted and 'anti-designed', they are a million miles from the glossy, global brands such as Heineken and Carlsberg. If these mega-beers are the equivalent of a Big Mac, craft beers like Kernel, Redemption and Crate are more akin to a gourmet burger made from organic beef raised on sustainable farms.

So for many, small is good – it shows you're a discerning drinker, that you know your malt from your barley, your IPA from your Weiss beer. In the age of the smart food consumer, the focus has shifted to locally sourced ingredients and community focused, artisan production and craft beers are perfectly placed to tick all these boxes. By shunning a crate of Stella Artois, and bringing a box of Kernel to the Christmas party, you're buying not just a beverage, but a product that demonstrates your values.

Kernel Brewery, Bermondsey

Evin O'Riordain, founder of Kernel Brewery in Bermondsey, has given a lot of thought to the issues that face many small brewers when success comes knocking. “People only realise they've made a mistake after they've made it. Everything is going well here at the moment, we will increase, we could keep going, but then we might get to the point at which the whole thing ceases to work," says Evin, who founded Kernel in 2009.


–Evin O'Riordain, founder of Kernel Brewery

“I think we'll eventually start brewing once a day, but for more than that, we'd have to move to a warehouse, which would change the whole dynamic. There's eight of us here, and we all bottle, we all brew, we're all involved in every stage of the process. I want everyone who works for me to be able to do everything involved in making a great bottle of ale."

Everyone at Kernel knows each other and “that changes when you get bigger – the process has to become more efficient and I don't want that. If we can make more beer here but keep operating in the same way, then that's what we'll do."

As he points out, handmade things often don't scale. “Cheese for instance, when you put it in factories, you kill it. But beer isn't like that, which is why it should be possible to expand and still create something with quality."

Kernel Brewery, Bermondsey

This South-East London brewery has been a roaring success, with Selfridges and numerous other high-end retailers all clamouring to stock it. Kernel has made a name for itself astonishingly quickly, partly due to its distinctively minimalist label, an identity Evin says is more down to giving the customer credit than to any calculated marketing strategy.

Prior to being one of the founders of Hackney Wick's Crate Brewery, Tom Seaton spent years working in the corporate world, for companies like Nestle and InBev, the largest brewing company in the world. The ability to be flexible and fast-moving are part of what drew him to start his own small brewery. “Working in that world, I had huge amounts of money I could spend but everything was so slow that it bored the hell out of me. I hated it."

“Here, if I decide I want to knock a wall down, I just pick up a sledge hammer and it's gone – there's instant gratification. All the people who work for us, they really feed off that and operate the same way. Everyone really feels satisfied, like we've achieved something together."

This hands-on approach is something that drives many small breweries. Andy Moffat, owner of Redemption Brewery in Tottenham, says he's never looked back to his days of working in a bank, now spending his days striding about his premises in a pair of wellingtons.

“We want to keep our business small and personal," he says of Redemption, which began brewing in 2010 and now supplies around 50 bars and venues around London and further afield. The winner of numerous awards, the brewery produces a core range of six cask beers with an emphasis on environmentally-friendly and sustainable production methods.

To get bigger, I worry that we'd lose part of our personality. Staying small is central to our identity.

–Andy Moffat, founder of Redemption Brewery

It's not just in their approach to business that craft breweries differ from the majors; being small allows them to be creative. Tom from Crate defines his time in the corporate world as one where “even to do one little thing, you had to write a brief, get approval, all of that nonsense." Having a smaller team puts you closer to the product, suppliers and the customer.

The resulting freedom allows time to experiment with different ingredients and create new flavours, something that Sam Smith, one of the founders of Pressure Drop, knows all about. This tiny brewery works with such a small kit that they're able to use more adventurous hop varieties, resulting in offerings like 'Wu Gang Chops the Tree', a foraged herb hefeweisse and 'Freimann's Dunkelweiss', a dark, smoky wheat beer.

“Making beer in small quantities gives you the freedom to experiment, mess around, to try things and focus on creating something with quality. When you have found the quality product, then you look at putting it into production, not the other way around," says Sam, who, along with his partners Ben Freadman and Graham O'Brien, is in talks with former MasterChef winner Tim Anderson about supplying the chef's planned new restaurant, Nanban, with a Japanese sweet potato beer.

The past decade has seen a flowering of British brewing and the next few years could prove to be interesting for these businesses. Will the public's appetite for the product keep growing or begin to taper off? How many more new arrivals will we see and which of them will make it?

As in any increasingly crowded market, there will be successes, failures and possibly mergers, as the major breweries respond to the rise of craft ales. As with the growth of alcopops in the nineties – a reaction to the rise of the clubbing and the ecstasy scene – the industry is often slow to react, but is then capable of swiftly flooding the market with 'me too' products.

It's not inconceivable that some of the majors will look at acquiring smaller breweries in order to capitalise on the trend. How will the need to stay independent be impacted by the need to survive and expand?

Of course, there is another option for the major brewers – to respond with their own products, brewed, branded and marketed to emulate the crafted feel. After all, many of the lagers and ales we drink today were at one time lovingly created in small breweries, the brainchild of an enthusiastic brewer.

Take US label Blue Moon. With 15 percent of the US craft beer market all to itself, the brand is a prime example of an in-house 'craft' product produced by a megabrewer, in this case MillerCoors (responsible for mainstream offerings like Miller, Fosters and Coors Light).

With its own dedicated website (that includes no mention of MillerCoors whatsoever) distinctive branding and attractive, homespun back story, Blue Moon appears to have all the credentials of a craft beer, but with the money and brewing power necessary to go global, whilst still exerting a niche appeal.

MillerCoors has recently defended the brand from claims that it's a wolf in sheep's clothing. “We should be proud to make beers that grow and are popular – that's the American way," MillerCoors Chief Executive Officer Tom Long said in a interview. “Being small and unpopular – what's the utility in that?"

Making beer in small quantities gives you the freedom to experiment, mess around, to try things and focus on creating something with quality.

–Sam Smith, co-founder of Pressure Drop

Crate Brewery, Hackney Wick

How to scale up without losing your soul

Is it possible to grow your business, while keeping all of the personality and passion that discerning consumers know and love? Small brands have a niche appeal, but for some successful large businesses, 'small' can be more of an ethos. Following some simple rules could pave the way towards a strategic expansion that doesn't alienate your core customer base and erode your personality.

Some of the most successful small businesses attract customers with an interesting story, whether it's the heart-warming tale of your origins as a six-member team making beer under a railway arch or your pledge to recycle every ounce of your leftover hop mash to a local urban farm. If you don't have a story, it's going to be really hard to get people's attention in a crowded market. Once you have that story straight, keep it central, no matter how much you expand, just like Ben & Jerry.

Crate Brewery, Hackney Wick

A well-designed brand identity can save a brand from slipping into homogenised obscurity. Think of Brooklyn Beer. This global player started life as a New York micro-brewery but what quickly set it apart was its eye-catching logo, created by world renowned designer Milton Glaser (best known for the 'I Love NY' logo). The brand is still considered a trendy choice, despite distributing across 25 US states and 20 countries, something that's partly down to its eye-catching identity.

Don't let your product become too widely available. One of the reasons that we gravitate towards craft beers is the perception that you have to go a little further, look a little harder to find that limited edition oatmeal stout you tried at a beer festival two months ago. Finding that same beer on sale in Tesco can somewhat dampen the appeal. It's possible to make your product available internationally, without compromising its quality in consumers' eyes, by sticking to highly regarded off licences and craft beer pubs.

All the breweries interviewed for this piece cited the direct relationship they have with beer drinkers as a factor to why they love their jobs. They all love the brewery visits, for the chance to open the doors of their premises and walk people through the process. They all love beer and enjoy nothing more than talking hops, malts and barley with civilian enthusiasts. This doesn't need to stop once you increase your production - many of the larger breweries still offer tours, beer-tasting workshops and cheese-pairing classes, all of which are opportunities to connect with consumers on a personal level.

I had huge amounts of money to spend but everything was so slow it bored the hell out of me.

–Tom Seaton, co-founder of Crate Brewery

Crate Brewery, Hackney Wick

Kernel Brewery, Bermondsey