Boak and Bailey's Beer Blog - News & Nuggets Special: Open Season
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Mostly out of nosiness we’re always pleased to see brewers being honest and this week, with new year’s spirit in the air, has seen a bonanza.
First, though we missed it, there was this reflection on profit-per-cask of ale*from Ade at Wishbone Brewery, based in Keighley, West Yorkshire:
We know Landlords feel pressure to*sell beer at competitive prices, we also often wonder where the fairness is in the profit share between beer-making and*pint-pulling as it often seems that pubs demand*the lion’s share in comparison to what the brewery makes. (Includes brewery profit at approx £25 per cask)
Brewery Cask per pint including VAT (Blonde) = £1.20 (approx)
Pub served pint including VAT (Blonde) £2.70 to £3.20+ (estimate)
@ £3.20 per pub-pint that is £146 per cask profit for the pub.
https://i2.wp.com/boakandbailey.com/...size=650%2C436SOURCE: CloudwaterThen there was the Cloudwater blog post which, quite apart from the hot potato cask issue, also gave a top level run down of the brewery’s financial position (sales, growth, margins):
There’s another standout commercial difference I noticed on my trips to The States in these past couple of years – many of the breweries we hear and get excited about manage a staggering amount of direct retail, leaving UK breweries lagging way behind.* From West Coast breweries turning anything between 50-85% of their beer over in their own tap rooms, to East Coast breweries selling 100% straight off the canning line at retail value, the margins our American peers and friends are making are both impressive and powerful… So it’s without apprehension that I’ll say that by focusing on opportunities we have now, and will work to develop in 2017 to maximise the margin we make, we’ll put ourselves, and every business in our supply chain too, in an ever stronger position next year.
https://i0.wp.com/boakandbailey.com/...size=650%2C425
That prompted Steve at*Beer Nouveau, a man who never shies away from providing detail, to go all in with a numbers-heavy post detailing the costs of producing, and profits from, casks, kegs and bottles of the same beer. He concludes with an intriguing suggestion about the purpose of draught beer, as a kind of marketing tool:
Putting your beer out on cask or keg doesn’t make you much money. We’d be looking at less than £500 a month. That would be my wages. Would you expect anyone to work 60 plus hours a week for that? But as breweries we have to put beer out on draught because that’s generally where the majority people first see and try it. And those first impressions are what are vital to us, because if someone likes our beer on draught, they’re more likely to buy it in bottles or cans. And that’s where we start looking at making a living wage. So as brewers we have to strike a balance between getting out names out there, and getting our bills paid.
https://i0.wp.com/boakandbailey.com/...size=650%2C425
Finally, today, we have a frankly worrying post from Dave Bailey at*Hardknott — another brewer who has always worn his heart on his sleeve, for good or ill. Cynics might read it as asking for special treatment or pleading for pity-purchases but, based on our dealings with him, we’ve no reason to doubt Dave’s sincerity when he writes…
It seems to us the only thing that might help us to make a go of it would be to sell our home, downsize and in so doing release some capital. I’m going to be honest, this scares the living shit out of me, not least of which because although we will release capital our house is really efficient and low-cost, our bills are low, should we move into a draughty house we might see bigger bills, which we cannot afford on our non-existent earnings… Our house is on the market, and I’m hopeful that we will find a buyer this year. Our plan requires that we move and so I can no longer hide the fact that a move out of Millom is essential. I understand it is possible to find some quite nice caravans and this sacrifice will be worth it to save Hardknott. What if even that doesn’t get us on an even footing?
With our amateur historian hats on we’re going to file these posts away — they may well be vital evidence in a Where Did it All Go Wrong/Right analysis in a decade’s time. In the meantime, it’s worth reflecting on that common theme of the price of cask ale — is there anything we can do as consumers to convey the message to the Trade that, while we don’t want to be exploited, we wouldn’t object to people like Dave earning enough that they don’t have to live in caravans?
News & Nuggets Special: Open Season originally posted at Boak & Bailey's Beer Blog
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