It’s 5pm on a Thursday and the official opening time of the taproom of Threes Brewing in the heart of downtown Brooklyn, in New York City, has just arrived. But on entering this comfortable industrial space it is already alive and serving a number of people. When we hit 6.30pm the place is properly buzzing with a throng of drinkers.
It was pretty much the same story when I visited Interboro Spirits & Ales in the Williamsburg area of Brooklyn. Despite only being open since September the former wood workshop space has its bright shiny new brewery (as well as glistening copper distillery) fully operational and is tempting in many drinkers. On the day I popped in at about 4pm it already had its fair share of customers that had not been put off by a sudden sprinkling of snow.
This level of customer activity at breweries is not uncommon in the US. The reality is they frequently sell the vast majority of their output on their own premises. It is not unusual for some breweries to sell 100% of their beers in their taprooms or for takeaway – what they classify as retail sales. Even though taprooms have become a welcome phenomenon in the UK, with most new breweries now incorporating on-site bars, it is much more established in the US. It is very easy to see why this has been the case because the margins are significantly better if sold direct to the public rather than selling through myriad third-parties – wholesalers, retailers, grocery chains, and pub companies – as is the case with most breweries in the UK.
Maybe it is the trading mentality of the British that seems to have companies exporting their beers around the world (through many different organisations who take out all the profit margin) when they are not really making the most of selling their products in their own back garden. There is a real problem in the brewing industry in the UK right now involving a growing number of the newer craft brewers that have emerged in recent years. Competition is proving fierce and even with the tax break they receive as a result of Smaller Brewers Relief), the fact is many of them are struggling to make it pay. If they sold the bulk of their output direct to the drinker then it doesn’t take a rocket scientist – or an accountant for that matter – to calculate their financial situation would be significantly enhanced.
Clearly there is a challenge in attracting drinkers to out-of-the-way locations but I’d argue many of the US brewers genuinely are in a middle of nowhere wilderness, whereas in the UK we don’t really have the same definition of middle of nowhere. What these brewers need to provide – alongside their quality beers – is an offer that makes it worthwhile for drinkers to make the effort to visit them. Rigging up a trestle table might convey a rustic non-corporate artisan ethos but it increasingly doesn’t cut the mustard with more demanding drinkers.
There is a lot to be learnt from the Americans. My experience is they invariably provide a great food offer to complement their beers and typically deliver an extremely welcoming venue. Threes and Interboro both have the industrial ambience mixed with a dash of cool bar vibe and the usual high level of US customer service. Thankfully we are seeing a number of brewers in the UK up their game and deliver experiences that compare very favourably with their US counterparts. There are a number of London-based brewers – including Beavertown, Howling Hops and Crate – that have made great efforts to stand out with their retail offers.
Outside London, worthy of mention are Cloudwater and Magic Rock as well as Buxton Brewery, which has a pretty cool taproom in the heart of its brewery. Oddly, it hasn’t quite managed to open it to the general public yet – maybe this is because it has its own pub in the centre of Buxton to keep people on a pilgrimage to the town for its beers more than happy.
The new craft brewers have certainly made their impact felt in the market and disrupted the brewing industry, to the extent it is even being felt acutely by the big boys. But if they are to ensure this is not just some short-lived phenomenon then they need to get their financial houses in order and one way of doing this is investing time, effort and money into building their levels of retail sales. It might just be the difference between life and death for some brewers.
Glynn Davis is a leading commentator on retail trends