BRITISH BEER A report on the 2015 Members' Survey of the Society of Independent Brewers
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BRITISH BEER
A report on the 2015
Members’ Survey of the
Society of Independent Brewers
Dr. Ignazio Cabras
Newcastle Business School
University of Northumbria in Newcastle
Commissioned and published by SIBA
MARCH 2015
1
Foreword
By Mike Benner, Managing Director, SIBA
A Remarkable Year
for British Beer!
Welcome to the all-new 2015 SIBA ‘British Our members are keen to boost
BRITISH BEER Contents Beer’ Report. their businesses through export and
clearly more support and help is Business School at the University of
Foreword������������������������������������������������� P1 In recent years the independent British needed by both Government and SIBA Northumbria in Newcastle. Ignazio is a
brewing industry has been a leading light in this area. Tax relief is also essential leading economist with a great interest
A report on the 2015 Executive Summary�������������������������������P2-3
in great British manufacturing, creating
thousands of new jobs across the country
to most of our members; 90% regard in and passion for beer having published
Small Breweries’ Relief at at least current
Members’ Survey of the SIBA Membership���������������������������������P4-5
with dozens of new and exciting brewing levels to be essential or very important to
several studies on the economic and
social impacts of beer, brewing and
businesses setting up every year. Never has their businesses and this hints strongly at
Society of Independent Brewers this been more true than in 2015. the opportunity to extend this winning
pubs. Ignazio is an active member of the
‘Beeronomics Society’, an international
1. Introduction��������������������������������������P6-9 scheme to create even greater benefit and
This report sheds even more light on the organisation which comprises high-profile
Dr. Ignazio Cabras promote growth. academics and economists worldwide,
2. Data Analysis������������������������������������� P10 trends in the independent brewing sector
as represented by SIBA members1. and chaired the third Beeronomics
Newcastle Business School It’s a win for consumers too. The market
conference in 2013 – the first in the UK.
2.1
Beer Production�������������������������P11-13 leading innovation of the independent
Looking at the whole of the UK beer
University of Northumbria in Newcastle sector together with the huge consumer– Our partnership brings a new focus to
market in 2014 we saw thousands of
2.2
Beers�����������������������������������������P14-15 led boom in the number of brewers our survey report and the credibility and
new jobs created in brewing and pub
Commissioned and published by SIBA means beer drinkers are faced with independence that comes from working
retailing, UK beer sales were in growth for
unprecedented beer choice and access with a University. In these days of statistics
2.3
Employees���������������������������������P16-18 the first time in a decade, there are more
MARCH 2015 to a simply amazing and ever-expanding to make every case, we think it is important
breweries per head of population than
range of beer styles. that our report stands up to scrutiny and
2.4
Business Activity�������������������������P20-23 any other country in the world, huge
increases in sector-wide investment and is highly regarded as evidence in support
With over 1,400 breweries estimated to
the lowest increases in pub beer prices of the various campaigns run by SIBA on
2.5
urrent Investments and Future
C produce around 8,000 regular beers and
since records began. behalf of independent brewers.
Developments ���������������������������P24-26 thousands more seasonal and one-off
beers, consumers are enjoying a beer Our report is a tool of our new strategy.
These overall positive trends set the
2.6
Your Brewery and SIBA������������������� P28 revolution never seen before. Almost every SIBA’s vision to ‘deliver the future of British
tone of our report on the independent
community boasts at least one brewery beer and become the voice of British
brewing scene and the findings of our
producing great local beers usually
3. SIBA’s Direct Delivery Scheme������������� P30 members’ survey underpin these exciting brewing’ is as ambitious as it is exciting
enjoyed sociably in community pubs. and the key findings of the ‘British Beer’
developments.
Comments and suggestions������������������� P32 report provide essential market insight
SIBA, the Society of Independent Brewers,
The survey results suggest that beer which will help us deliver our strategic
represents independent brewers from
production across the SIBA membership is objectives.
small brewpubs through to established
up by 15.8% year on year from 2013-
family brewers with their own pub estates I hope you enjoy reading the report. If you
14; a fantastic achievement which far
and our members’ survey aims to get their have any comments on the content or
outweighs growth in 20132 and 20123.
views on a number of key issues such as suggestions for improvement I would very
Three out of four brewers are expecting
production, employment and investment. much like to hear from you. You’ll find
their turnover to increase in 2015. On
jobs, a staggering 83% of members contact details at the back of the report.
The purpose of the Beer Report is to
expect to create one or more jobs in 2015 provide SIBA itself, our members, policy Cheers!
and two-thirds of employees live very local makers and the wider industry with useful
to their breweries, which often provide insight and information on what is going
much needed employment in deprived on in British independent brewing.
and rural areas. 77% of those surveyed Mike Benner
expect to invest in staff training in the For the first time this year we have worked Managing Director, SIBA
next year. with Dr Ignazio Cabras from Newcastle March 2015
There are approximately 800 full SIBA members in March 2015 and the survey does not account for the activities of brewers which are not members, currently around 600 companies
1
9.4% 35.7%
2
2 3
Executive
Summary A new approach to the survey to build for the future:
• A new improved survey methodology
• Seven key themes on member breweries, production, beers,
employment, business activity, investments & future plans and
• 1 in 4 employees are women
• 3 out of 4 jobs are full-time
• Good spread of ages in employment – half are aged 35-54,
with 34% aged 16-34 and 17% aged over 55
SIBA membership • Investing in young people - One in ten employees are aged
• 323 responses to the survey 16-24
• 270 valid responses – around 35% of SIBA membership • Local jobs in local breweries. Strong impact on local
• Strong statistical reliability employment – over a third live in the same town or village as
their brewery with a further 29% living within five miles
Breweries and Beer Production: • Survey indicates that part-time jobs have trebled between
• 100 breweries joined SIBA in 2014 bringing the total to 2012-14
almost 800
Growth:
• 13 breweries joined SIBA in the first two months of 2015
alone, translating to an expectation of around 80 more new • 3 out of 4 respondents expect their turnover to increase
members in 2015 in 2015
• Over 226 million pints produced by respondents is estimated • One out of five forecast growth in turnover over 25% in 2015
to translate to 526m pints, 2.99 million hl by SIBA members • 38% of respondents turnover between £50k-£250k in 2014
4
in 2014 • Only 8% expect a decline in turnover in 2015
• Beer production estimated to have increased by 15.8% from • 55% of production is supplied to free-trade pubs, with 14%
2013-14, compared to 5.7% 2011-12 and 9.4% 2012-13 going to controlled pubs
• Over half of respondents brew less than 1000hl • Over 80% of beer sold within 40 miles of the brewery
• Keg proportion of production expected to more than double • 15% of respondent brewers now exporting their beers
in two years to 6.9% in 2015
• Almost 58% of brewers are interested in exporting their beers
• 23% of members are now selling some craft beer in keg
• Cask production 71% of total in 2014 Investment:
• More bottled, kegged and canned beers – cask proportion of • Nearly 70% of breweries made capital investments in 2014
production expected to fall to 68% in 2015 from 84% • 12% invested more than £100k in 2014
in 2013 • Bulk of investments were in modernising equipment, premises
• Majority of respondents brew less than 10% of production as and to expand transport
bottled beer • Duty savings from two successive duty cuts and Small
• Average beer strength is 4.1% ABV Breweries’ Relief were mainly used for more capacity, new
• Golden ales are the most produced beer style – 92% of equipment, pub acquisition and new staff
respondents brew at least one, followed by traditional • Training is very important to members – 77% intend to invest
bitter – 81% in staff training in the future and over 90% are interested in a
• 30% of members still brew a traditional mild, while 20% SIBA-led training scheme
brew a lager • Small Breweries’ Relief at at least current levels is essential to
• Most brewers produce between four and six regular brands the future – Over 70% say it is vital to their business and a
further 24% say it is ‘very important’ or ‘important’
• 90% of respondents brew seasonal beers
• SBR is defined as either ‘vital’ or ‘very important’ by nearly
Jobs: 93% of those breweries expressing an interest to start
• 83% of brewers plan to recruit one or more new employees exporting
in the next 12 months • Almost one out of five breweries plan to double their current
• Estimated 840 new jobs to be created by members next year levels of production, sales and turnover by 2018
• 4 full-time and 1.5 part-time employed by members on
average
Excludes associate members of SIBA
4
4 5
SIBA
Membership
• 100 new members in 2014
• Majority of members indicate SIBA’s campaign
in defence and for the development of Small
Breweries’ Relief as an extremely important activity
• Political lobbying by SIBA on behalf of independent
breweries is also considered very important
• Organisation of beer festivals and competitions
and SIBA’s Direct Delivery Scheme valued as
initiatives by members
• Results support SIBA’s new strategies to
build improved member benefits including
campaigning, beer competitions, improved
communications, training provision and
quality auditing.
6 7
1.
Introduction
The researchers used a questionnaire to collect the relevant information
to conduct their analysis and elaborate this report. The questionnaire was
developed on the basis of previous templates provided by SIBA utilised
KEY POINTS for surveys conducted between 2011 and 2013. The templates presented
• A new survery methodology some significant variation with regard to order and types of questions,
• Seven key themes on member answering methods, and overall structures. For instance, some questions
breweries, production, beers, were repeated in successive surveys, but the types of options given to
employment, business activity, respondents varied from year to year. In addition, the timing in which
investments & future plans and previous surveys were conducted frequently failed to capture data and
SIBA membership information related to full years (e.g. twelve months from January to
December), with some questions asking for estimates rather than actual
• 323 responses to the survey
values and with targeted answers often related to different time-frames.
• 270 valid responses – around
35% of SIBA membership In order to rectify and minimise the impact of these issues, the
• Strong statistical reliability questionnaire for this annual report had to be developed and finalised
between October and November 2014. This exercise involved several
exchanges between researchers and SIBA officers with regards to its
content and structure. In its final format, the questionnaire framework
comprised of seven sections associated with specific domains related to
the members’ activities, operations and relationship with SIBA.
The seven sections were named as:
• Brewery
• Beer Production
• Beers
• Employees
• Business Activity
• Current Investments and Future Developments
• Your Brewery and SIBA
The first section aimed to gather information related to the surveyed
businesses, their owners/managers, and their respective locations and
length of membership. The second section examined levels of production
accounting for cask, kegs, and bottled beer. The third section explored the
types of beer styles brewed by members. In particular, questions aimed to
specify the level of ABV associated with bestselling beers, the number of
regular brands supplied by members and the number of seasonal beers
produced in 2014. The fourth section focused on the level of employment
generated by surveyed members. Questions aimed at capturing levels of
full-time and part-time work, employee’s ages and location, personnel
holding relevant qualifications and provision of training. The fifth section
investigated the members’ annual turnover, and current routes to markets.
The sixth section examined capital investment made in 2014 and members’
plans for future expansion and development.
Finally, the seventh section explored and examined the benefits and services
provided to members by SIBA with regards to different levels of importance.
The section comprised a list of 22 items for respondents to evaluate and
rank, with an open-question inserted to identify and expand on any other
important issue not included in the list.
The use of the questionnaire served in identifying many aspects and issues
associated with members’ business activities. More specifically, the survey
served to identify main attributes of characteristics of SIBA members,
to map the spatial patterns related to brewing operations and brewers’
markets, and to evaluate potential trends occurring in the brewing sector.
A survey-pilot of the questionnaire was conducted in November 2014
with the objective to test questions on respondents. Eight members were
approached and seven responses were obtained. The content of these
responses was then used to further improve and finalise the questionnaire.
Draft questionnaires were reviewed successively by two senior academics
specialising in quantitative data analysis for relevance, clarity and ambiguity
of wording. This process resulted in several non-fundamental revisions.
8 9
Table1: Responses analysed by location and proportions
Members Survey Members/survey Differences in
Regions Members 2014 Survey 2014
proportions proportions proportions representation
East Midlands 83 10.6% 33 12.2% 39.8% 1.7%
East of England 74 9.4% 25 9.3% 33.8% -0.2%
London 36 4.6% 12 4.4% 33.3% -0.1%
North East 29 3.7% 7 2.6% 24.1% -1.1%
North West 98 12.5% 32 11.9% 32.7% -0.6%
South East 113 5.2% 30 6.3% 26.5% 1.1%
The survey was officially launched on 28 November 2014 and South West 117 14.4% 41 11.1% 35.0% -3.3%
the data collection progressed until 14 January 2015. Data were West Midlands 68 14.9% 26 15.2% 38.2% 0.3%
collected by means of an online survey. Several attempts were Yorkshire and the
made during the six weeks in order to increase the number of 89 4.8% 31 5.9% 34.8% 1.1%
Humberside
responses, including repeated email approaches. A total of 323 Scotland 41 11.3% 17 11.5% 41.5% 0.2%
responses were gathered at the end of the data collection, a very Wales 38 10.6% 16 12.2% 42.1% 1.7%
similar number to totals gathered in the two previous surveys (327 Total 786 270 34.4%
and 315 collected in 2014 and 2013 surveys respectively). A more
detailed inspection enabled to identify 270 responses as ‘valid’,
thus providing an appropriate level of data and information in
relation to all the sections included. Valid responses accounted
for 83.5% of the total responses received, and for 34.3% of total
memberships, meaning that about one out of three members took
part in the survey.
Several statistical tests were conducted in order to evaluate the Figure 1: Surveyed breweries by types of membership (counts)
quality and reliability of the responses captured by each section
in the survey questionnaire. Results confirmed the good quality
of data and information gathered across sections and within the 60%
questionnaire overall.
139
Table 1 analyses responses by location. Rates of response vary
50%
from little above 24% covering total memberships located in
the North East, to nearly 40% of total memberships located in
the East Midlands. Differences in proportions indicate very little
variation between groups weighted using total membership 40%
and groups using survey responses as their basis respectively, 91
although memberships from the South West appear to be slightly
underrepresented, and membership from the East Midlands and 30%
the North East slightly overrepresented with regard to gathered
responses.
20%
Figure 1 shows that more than half of respondents (51%) are
categorised as Level 1 SIBA memberships, with about 33% 33
categorised as Level 2; 12% categorised as Level 3, and the 10%
remaining categorised as Level 4 and Level 5 (1.4% and 1.1%
respectively). 4
3
0%
Level 1 Level 2 Level 3 Level 4 Level 5
(up to 999 HL) (1,000-4,999 HL) (5,000-29,999 HL) (30,000-59,999 HL) (60,000-200,000 HL)
10 11
KEY POINTS
2.
Data analysis • 100 breweries joined SIBA in 2014 bringing
the total to almost 800
• 13 breweries joined SIBA in the first two months
• Over half respondents brew less than 1000hl
• Keg proportion of production expected to more
than double in two years to 6.9% in 2015
of 2015 alone, translating to an expectation of • 23% of members are now selling some craft
around 80 more new members in 2015 beer in keg
• Over 226 million pints produced by • Cask production 71% of total in 2014
respondents is estimated to translate to 526m
• More bottled, kegged and canned beers –
by SIBA members5, or 2.99 million hl in 2014
cask proportion of production expected to fall
• Beer production estimated to have increased to 68% in 2015 from 84% in 2013
by 15.8% from 2013-14, compared to 5.7%
• Majority of respondents brew less than 10%
2011-12 and 9.4% 2012-13
of production as bottled beer
2.1 Beer Production
Levels of beer production provided by respondents indicate a cumulative total of 1,07 million HL. This
equates to roughly 226 million pints produced by respondents, and translates to approximately 526m
pints brewed by SIBA members. Table 2 illustrates levels of production for the past six years. There is some
variation in terms of hectolitres (HL) produced among the five membership categories, although data
shows a clear and progressive pattern of growth as demonstrated in Figure 2
Table 2: 2009-2014 Production levels by membership6
2009 2010 2011 2012 2013 2014*
Level 1 91,140 96,174 114,926 124,026 152,527 162,063
Level 2 379,577 421,638 447,752 514,381 613,123 578,505
Level 3 598,928 673,268 773,106 847,667 851,978 1,021,102
Level 4 142,237 206,617 221,596 222,959 317,250 576,535
Level 5 509,409 487,356 677,105 652,105 649,314 654,542
Totals 1,721,291 1,885,053 2,234,489 2,361,138 2,584,192 2,992,747
*estimated on full year amounts (previous estimates based on Jan-Sept month predictions)
6
SIBA Membership levels are as follows: Level 1 – up to 999HL, Level 2 – 1,000-4,999 HL, level 3 – 5,000-29,999 HL Level 4 – 30,000-59,999 HL,
Level 5 – 60,000-200,000 HL
Figure 2: Production totals 2009-2014 (thousand HL)
3,500
Thousands
3,250
2,993
3,000 ◆
2,750
◆
2,500 2,361
2,584
2,234 ◆
2,250 ◆
2,000
◆
1,750 ◆ 1,885
1,721
1,500
1,250
R2 = 0.9845
1,000
2009 2010 2011 2012 2013 2014
5
Excludes associate members of SIBA
12 13
Figure 3b: Total 2014 production by packaging accounted for surveyed members
100% 4.8% 4.5% 8.5%
1.2% 1.9%
Figure 3a compares levels of production in 2014 with those Only two breweries indicate more than 50% of their production
estimated in the 2013 survey and those forecast for 2015, being allocated to beers with a 2.9-3.4% ABV. However, six 90% 18.1% 14.9% 23.6% 15.6% 53.1%
reflecting a steady increase in the total hectolitres produced and breweries report beers with 4.3-6.0% ABV accounting for more ■ Keg
a significant increase in the amount of bottled/canned beer. As than 90% of their total production. 80%
■ Bottled/
shown in Figure 3b, bottled/canned beers in 2014 represented
The other two ABV range intervals used in the questionnaire, 70% Canned
a significant part of the production for Level 5 members (more
than half of captured production), although the majority of ‘Up to 2.8%’ and ‘Above 6.0%’, provided contrasting 60% ■ Cask
respondents brew less than 10% of production as bottled/ responses. On the one hand, just seven breweries reported
canned beer. Most of the beer produced by Level 1, Level 2 and brewing low-alcohol beers below 2.8%, which anyway 50%
Level 4 members remains predominantly cask (an average 80% accounted for very low proportions of their total production in
2014 (mostly below 5% with only one brewery reporting up to 40%
of totals), while Level 3 members indicate a relatively a higher 77.1% 80.6% 67.9% 83.2% 45.0%
production of kegged beers compared to other members. 10%). On the other hand, 96 breweries reported brewing beers
30%
with an ABV higher than 6.0%, which accounted for more than
Beer production has been investigated in relation to ABV. 20% of the total production in four cases as shown in Figure 5. 20%
Figure 4 shows findings gathered by crossing proportions of
total production with three ABV range intervals: between 2.9% 10%
and 3.4%; between 3.5% and 4.2%, and between 4.3%
0%
and 6.0%. The latter two range intervals define the average Level 1 Level 2 Level 3 Level 4 Level 5
strength of the vast majority of beers produced by surveyed
breweries in 2014, as shown by the mid bars in the graph.
Figure 4: Production levels by ABV (count of respondents on top of bars)
6
Above 90% 27
Figure 3a: Proportions of beer production according to packaging (2013-2015) 90
Above 75% 176
100% 2.8% 4.2% 6.9%
90% 13.5% 122
Above 66% 189
25.0% 25.1%
80%
70% 191
Above 50% 225
60% 2
83.7% 70.8% 68.1% ■ Keg
50% 0 50 100 150 200 250
■ Bottled/Canned ■ 2.9-3.4% ABV ■ 3.5-4.2% ABV ■ 4.3-6.0% ABV
40%
■ Cask
30%
*Estimated Figure 5: Breweries producing beers with ABV above 6% (count=96)
20%
10%
4%
0%
2013 2014 2015* 9% Shares of total
production allocated to
beers with ABV >6%
■ Below 5%
■ 5%-10%
46%
■ 11-20%
41% ■ Above 20%
14 15
Figure 6: Average ABV for bestselling beers
2.2 Beers
Surveyed breweries were asked to indicate the strength
of their bestselling draught beer in 2014. The histogram KEY POINTS 60
Mean = 4.17
in Figure 6 shows an average 4.1% ABV, with the bulk Std. Dev. = .521
of responses concentrating around this value and with • Average beer strength is 4.1% ABV N = 266
about a fifth (20.1%) indicating an ABV above 4.2% for • Golden ales are the most produced
their bestselling beers. beer style – 92% of respondents
brew at least one, followed by
Frequency
40
Beer styles brewed by surveyed breweries on a regular traditional bitter – 81%
basis are reported in Table 3. The regular production • 30% of members still brew a
of Golden Bitter/Ale beers has been indicated by more traditional mild, while 20% brew
than 90% of respondents, followed by traditional bitter a lager
ales, stout/porters, and strong bitter/IPAs also brewed by
• Most brewers produce between 20
the majority of brewers. Conversely, only a handful of
breweries indicated gluten free and low-alcohol beers four and six regular brands
in regular production. Interestingly, roughly one out of • 90% of respondents brew seasonal
three breweries brew organic and speciality beers on a beers
regular basis.
0
2 4 6 8
Figure 7 groups responses obtained with regards to the
ABV %
number of regular brands and seasonal beers brewed.
More than 70% of respondents indicated having more
than four different brands regularly brewed (a), with a
quarter indicating having at least seven different brands Figure 7: Brands (a) and seasonal beers (b) in regular production
in regular production. Engagement with seasonal or
‘one-off’ beers is also significant. More than 90% of
a)
respondents engaged in brewing seasonal beers in
60%
2014, with about 22% having brewed more than ten 55.6%
seasonal beers in the period considered and only 23
breweries (about 8%) not brewing any seasonal beers. 50%
40%
30%
26.3%
148
20%
15.4%
70
10%
41
2.6%
Table 3: Types of brands and seasonal beers* 7
0%
1-3 Regular Brands 4-6 Regular Brands 7-10 Regular Brands >10 Regular Brands
Beer Styles Percentage Beer Styles Percentage
Golden Bitter / Ale 92.2 Craft Keg Beer 19.6 b)
Traditional Bitter 81.1 Local Ingredients Beer 18.9 30%
Stout / Porter 73.0 Wheat Beer 18.1 26.2%
26.2%
Strong Bitter / IPA 72.6 Strong Ale / Barley Wine 14.8
25%
Super-Premium Bottled Beer 42.6 Unrefined Cask Beer 14.1
Organic Beer 30.7 Foreign-Style Ale 11.5
Traditional Mild 30.0 Bottle-Conditioned Beer 10.7 20%
Speciality Beer 29.3 Varietal or Green Hop Beer 7.0 16.5%
70 70
Strong Mild / Old Ale 24.8 Low alcohol beer (25
Seasonals Seasonals Seasonals Seasonals Seasonals Seasonals
16 17
2.3 Employees
The workforce captured by the 2014 survey comprised 1,549 staff KEY POINTS
employed in the breweries approached, with total employment among Figure 8b: Surveyed workforce by type of membership
• 83% of brewers plan one or more
surveyed breweries rising to 1,819 when accounting for owners,
new employees in the next 12
managers and directors. As shown by Figure 8a, the vast majority of Workforce
months
surveyed employees are full time equivalent (1, 125 - equal to nearly
• Estimated 840 new jobs to be 600
73% of the total), with men representing approximately three out of four ■ Full time employees
employees. Figure 8b reports cumulative totals of employees by type of created by members next year
■ Part time employees
memberships. Average hours accounted for by part-time employment • 4 full-time and 1.5 part-time 503
are reported by Figure 9: about 43% of part-time employees work employed by members on average 500
between 10 and 20 hours per week, with another 26% working above • 1 in 4 employees are women
20 hours. Jobs of less than 10 hours per week related to one out of three
• 3 out of 4 jobs are full-time
non-full-time employees.
equivalent 400
Figure 10 classifies employees by age bands and residency. Half of the • Good spread of ages in
employees surveyed in 2014 are between 35 and 54 years old on average, employment – half are aged 35-54,
with about one out of three employees aged under 34. Interestingly, the with 34% aged 16-34 and 17% 300 339
number of employees grouped in the oldest age band (55 years and above) aged over 55
outnumbered those grouped among the youngest category (16-24 years old). • Investing in young people - One in
The majority of workers live in the same town or village as the brewery, with ten employees are aged 16-24
about two out of three employees living within five miles of their brewery. 200
• Local jobs in local breweries. Strong
143 136 131
The data confirms the importance of breweries in terms of impact on local impact on local employment – 132 124
employment. Further corroboration to this statement is provided by Figure over a third live in the same town
or village as their brewery with a
100
11, which reports findings obtained with regards to future recruitment plans.
The vast majority of breweries are planning to expand their staff in the next further 29% living within five miles
21 20
twelve months, with 18% of respondents saying they won’t recruit anyone • Survey indicates that part-time jobs
and the remaining 82% saying they will recruit at least one employee, with have trebled between 2012-14 0
Level 1 Level 2 Level 3 Level 4 Level 5
38% recruiting two and above which could generate about 840 new full time
jobs among members in 2015. This positive trend is also confirmed in Figure SIBA Membership
12, which shows trends related to employment taken from a subsample of 20
breweries for which data were available in different years. The data identify
clear patterns of growth for both full-time and part-time employment, with
the latter trebling in numbers in the period 2012-2014.
Figure 9: Proportions of part-time employment by working hours
Figure 8a: Surveyed workforce by type of contract and gender* 35%
31%
29%
1400 30%
1200 72.6%
75.9% 25%
1000 20%
17%
14%
800 15%
9%
600 10%
27.4%
400 24.1% 5%
200 0%18 19
Figure 10: Workforce categorised by age bands and place of living
10.9%
16.4%
22.8% 36.5% 28.9% 34.6%
25.6%
■ 16-24 yo
■ 25-34 yo ● Brewery location
■ 35-44 yo ● Living in same town/village
24.4%
■ 45-54 yo ● Living within 5 miles
■ 55 yo and older ● Living further than 5 miles
Figure 11: Recruitment plans of surveyed breweries
3%
4%
■ No plans to recruit
18%
■ Planning to recruit at least
one new employee
31% ■ Planning to recruit two or
three new employees
■ Planning to recruit four or
44% five new employees
■ Planning to recruit more
than five new employees
Figure 12: Full-time and part-time employment 2012-2014 (subsample n=20)
120
105
100
75
80
64
60 ■ FT
■ PT
40
31
20
10 13
0
2012 2013 201420 21
2.4 Business Activity
Figure 13 shows the distribution of surveyed breweries with regard KEY POINTS
to levels of annual turnover. One out of four breweries approached
by the survey indicated an annual turnover in 2014 below £50k. • 3 out of 4 respondents expect
However, the majority of responses obtained are in the band their turnover to increase in 2015
£50K-£250k, with about 35% reporting an annual turnover above • One out of five forecast growth in
the £250k threshold and 10% reporting an annual turnover above £1 turnover over 25% in 2015
million. Estimation for this year seems very positive overall: three out of • 38% of respondents turnover
four respondents are expecting an increase in annual turnover in 2015, between £50k-£250k in 2014
with nearly one out of five forecasting growth above 25%. Conversely,
• Only 8% expect a decline in
about 8% of responses expect a decline in turnover for the next year,
turnover in 2015
with another 15% predicting no change.
• 55% of production is supplied to
As shown in Table 4a, around one out of five breweries in the survey free-trade pubs, with 14% going
indicated that they own, lease and rent pubs. Table 4b reports pubs to controlled pubs
owned or tenanted/leased according to memberships. The total • Over 80% of beer sold within
number of pubs owned by breweries captured by the survey is 333, 40 miles of the brewery
while those leased/tenanted are 223. The majority of respondents (30)
• 15% of respondent brewers now
indicate that they own at least one pub, while five respondents seem
exporting their beers
to directly possess more than ten pubs each for a cumulative total of
233 controlled pubs. Conversely, figures related to leased/tenanted • Almost 58% of brewers are
pubs are smaller, with just eleven respondents indicating that they interested in exporting their beers
control at least one pub under these types of management, and only
nine revealing that they have more than two. Operations conducted
and finalised in 2014 saw the purchasing/undertaking of 24 pubs, of
which 10 were bought and 14 were undertaken by respondents.
Figure 13: Annual turnover in 2014 and estimates for 2015
Table 4a: Number of surveyed breweries owning or leasing/tenanting pubs (counts)
Annual Turnover in 2014
Freehold Leased/Tenanted
37.8%
100 No. pubs operated Total Bought in 2014 Total Taken on in 2014
Zero 172 - 199 -
One 46 1 19 9
80 Two 7 (14) 1 2 (4) -
25.9% Three to five 10 (26) 4 3 (16)
24.8%
Six to ten 2 (14) 2 1 (6) 5
60
102 More than ten 5 (233) 2 5 (178) -
Total 244 (333) 10 229 (223) 14
40 70
67
8.5%
20 Table 4b: Surveyed breweries owning or leasing/tenanting pubs by memberships*†
23 Freehold pubs
1.1%
3 Level 1 Level 2 Level 3 Level 4
0 No. pubs operated
(up to 999 HL) (1,000-4,999 HL (5,000-29,999 (30,000-59,999 HL)
£5M
One 22 17 6 1
Two 3 (6) 3 (6) 1 (2) -
Three to five 1 (4) 8 (18) 1 (4) -
Estimated Annual Turnover in 2015 Six to ten - 1 (8) - 1 (6)
More than ten - 1 (33) 5 (182) 1 (18)
100 36.6%
Totals 26 (32) 30 (82) 13 (194) 3 (25)
80
Leased/tenanted pubs
Level 1 Level 2 Level 3 Level 4
No. pubs operated
60 96 (up to 999 HL) (1,000-4,999 HL) (5,000-29,999 HL) (30,000-59,999 HL)
18.7% One 6 10 3 -
17.9%
Two - 2 (4) - -
15.3%
40 Three to five 1(5) - 1 (4) 1 (7)
Six to ten - - 1(6) -
47 49 More than ten - - 4 (162) 1 (16)
20 5.7% 40 Totals 7 (11) 12 (14) 9 (175) 2 (23)
2.3%
15
6
0 *
Total numbers of owned/leased/tenanted pubs corresponding to categories are reported in brackets
Down >10% Down 1-10% No change Up 1-10% Up 11-25% Up >25% †
No owned/leased/tenanted pub reported by breweries holding a Level 5 membership22 23
Current sales routes to market were investigated by using Respondents were asked to estimate percentages related to
percentages of total beer sales made through eight specific total on-trade sales made beyond a 40 mile radius of their
channels: a) direct to breweries’ owned pubs; b) direct to free respective breweries; responses are reported in Figure 15.
trade pubs; c) through the SIBA DDS route; d) direct to pub- As expected, the majority of responses indicate the largest
companies tied pubs; e) direct to pub-companies free-of-tie proportion of production (80% and above) sold within spatial
pubs; f) reciprocal to other breweries; g) direct to wholesalers; proximity. However, about one out of three breweries sell more
and h) other routes. than a fifth of their beers beyond a 40 mile radius, with 43
breweries selling more than half of their production further Figure
Figure 14 shows histograms and normal curves computed for Figure3.15: Proportionofofbeer
15: Proportion beer production
production sold
sold beyond
beyond a 40amiles
40 miles radius*
radius*
away from their location.
each of these categories. At a first glance, responses indicate
a high level of variation among the eight different routes. Figure 16 shows data and figures related to export. About
35%
However, surveyed breweries appear to indicate free trade pubs, 15% of breweries responding export their products overseas,
owned pubs and wholesalers as the main channels for their with 30 destinations reported in the survey. Main markets 78
sales. In particular, an average 55% of breweries’ production are in Europe (Italy, Sweden, Finland, Norway and Spain), but 30%
appears to be supplied to free trade pubs, about 14% to some breweries indicated exporting to Brazil, Canada, Australia
owned pubs and little more than 13% to wholesalers. Sales and China. The majority of breweries which are not exporting
through the SIBA DDS and reciprocal sales with other breweries manifested an interest to start. 25%
are the lowest categories, accounting for an average of 5.4% 54
and 3.8% of the total sales respectively.
20%
42
15%
23
10%
17
Figure 14: Beer sales routes 15
Figure 14: Beer sales routes 11 12
5% 8
Direct to owned pubs Direct to free trade pubs SIBA DDS
a) b) C)
25 60
Direct to owned pubs
Mean = 13.93 Direct to free= trade
Mean 55.23 pubs Mean = 5.38 SIBA DDS
a) 125
Std. Dev. = 26.675 b) Std. Dev. = 26.72 C) Std. Dev. = 6.371
N = 217
Mean = 13.93 25
N = 253
Mean = 50
55.23 60
N = 224
Mean = 5.38
0%
20
Std. Dev. = 26.675 Std. Dev. = 26.72 Std. Dev. = 6.371
Fewer than 1% 1-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-75% More than 75%
125100 N = 217 N = 253 40 N = 224
50
15 20
Frequency
Frequency
Frequency
100
75
30
*Percentage bars – counts on top
10 40
15
Frequency
Frequency
50
Frequency
20
75
5 30
25 10
10
50 0 20
0 0
0 30 60 90 120 0 30 60 90 120 -10 0 10 20 30 40 50
Percentages 5 Percentages Percentages
25
Direct to pubco-tied outlets Direct to pubco free-of-tie outlets Reciprocal to other10
breweries
d) e) 120 f)
100
Mean = 6.44 Mean = 5.48 80 Mean = 3.8 Figure 16: Export activities among surveyed breweries
0 Std. Dev. = 10.645
N = 18590 100
0 Std. Dev. = 10.615
N
0 Std. Dev. = 6.162 Figure 16: Export activities among surveyed breweries
0 30 60 120 0 30= 188 60 90 120 -10N = 1930 10 20 30 40 50
80 Percentages Percentages Percentages
60
80
Direct to pubco-tied outlets Direct to pubco free-of-tie outlets Reciprocal to other breweries
d) e) 120 f)
Frequency
Frequency
Frequency
60
100 60 80
Mean = 6.44 Mean = 5.48
40 Mean = 3.8
Std. Dev. = 10.645 Std. Dev. = 10.615 Std. Dev. = 6.162 14.8% Main destinations:
40 N = 185 100 N = 188 N = 193 14.8% Italy Main destinations:
12.8%
40
80 Sweden Italy 8.5% 12.8%
20
20
60 USA 7.7%
Sweden 8.5%
20 80
● Exporting Australia 6.0%
85.2% Finland USA 6.0% 7.7%
Frequency
Frequency
Frequency
60
0 0
60
0
●● Not exporting
Exporting Norway Australia
6.0% 6.0%
0 20 40 60 -20 0 20 40 60 80 100 -10 0 10 20 30 40 50
Percentages Percentages 40
Percentages
85.2% Spain Finland
6.0% 6.0%
40 Wholesalers Other retailers
● Not exporting Norway 6.0%
g) h) 40
Mean = 13.13
100
Mean = 10.43
Spain 6.0%
Std. Dev. = 16.654 Std. Dev. = 16.697 20
20 60 N = 222 N = 185
20
80
0 0 0 42.5%
Frequency
Frequency
60
40 0 20 40 60 -20 0 20 40 60 80 100 -10 0 10 20 30 40 50 ● Want to export
Percentages Percentages Percentages 57.5%
40
● Not interested
Wholesalers Other retailers
g) 20 h)
100
Mean = 13.13 20 Mean = 10.43 42.5%
Std. Dev. = 16.654 Std. Dev. = 16.697 ● Want to export
60 N = 222 N = 185 57.5%
0
-20 0 20 40 60 80 100
0
0
80
30 60 90 120
● Not interested
Percentages Percentages
Frequency
Frequency
60
40
40
20
20
0 0
-20 0 20 40 60 80 100 0 30 60 90 120
Percentages Percentages24 25
The willingness to invest to increase the quality of training but also for future expansion. For instance, the SBR is defined
2.5 Current Investments and KEY POINTS
available for employees is explored in Figure 19. More than as either ‘vital’ or ‘very important’ by nearly 93% of those
three out of four breweries intend to increase the quality of breweries expressing an interest to start exporting.
Future Developments training provision in the future. In addition, the huge majority
• Nearly 70% of breweries made capital Breweries expressed their objectives in terms of growth and
investments in 2014 of respondents expressed an interest in taking part in training expansion over the next three years. As shown in Figure 21,
The majority of breweries approached with the
• 12% invested more than £100k in 2014 developed and provided by SIBA. Surveyed breweries consider the vast majority of breweries plan to increase production,
survey made capital investments in 2014, as shown
Small Breweries’ Relief extremely important with regard to their sales volume and annual turnover in the next three years, with
by Figure 17. More than one out of four breweries • Bulk of investments were in modernising ability to compete as small businesses. Figure 20 shows more only 15 breweries indicating no plans in terms of growing their
invested less than £10K, with 42% investing above equipment, premises and to expand than 70% of respondents indicating SBR as ‘vital’ for their business. While the bulk of responses expressed an intention
this threshold and 12% investing more than £100K transport activities, with another 24% as ‘very important’ or ‘important’. to achieve marginal growth up to 25%, almost one out of five
in their breweries. The purposes of these investments • Duty savings from two successive duty cuts Only six respondents did not regard SBR as important for their breweries plan to double their current levels of production, sales
are reported in Figure 18. The bulk of respondents and Small Breweries’ Relief were mainly businesses. Overall, responses corroborate evidence of the and turnover by 2018.
(43%) invested to modernise equipment, while other used for more capacity, new equipment, pub significance of SBR not only for members’ current activities
respondents purchased or expanded their transport acquisition and new staff
fleet (15%), enlarged their current premises (14%)
or purchased new premises (7%). Other investment • Training is very important to members –
purposes (21%) varied significantly, although buying 77% intend to invest in staff training in the Figure 18: Priorities
Figure ininrelation
18: Priorities tousing
relation to using duty
duty savings
savings
more casks and refurbishing/repairing were among the future and over 90% are interested in a
most common. SIBA-led training scheme
• Small Breweries’ Relief at at least current More capacity 30%
More capacity 30%
Breweries were asked to indicate and rank their levels is essential to the future – Over 70%
priorities for utilising duty savings related to the beer say it is vital to their business and a further New equipment 28%
duty reductions and Small Breweries’ Relief (for those 24% say it is ‘very important’ or ‘important’ New equipment
who qualified) with regard to their business activities. 28%
• SBR is defined as either ‘vital’ or ‘very
Priorities were ranked from 1 to 7 in order of their important’ by nearly 93% of those breweries Pub acquisition 12%
importance, where 1 is the most important and 7 the expressing an interest to start exporting Pub acquisition 12%
least important. Increasing capacity and purchasing
new equipment were indicated as top-priorities in • Almost one out of five breweries plan to New staff 11%
30% and 28% of the cases respectively, while savings double their current levels of production,
seemed less important in relation to staff training, sales and turnover by 2018 New staff
Branding, marketing 11%
discounting prices or developing marketing and and design
10%
branding.
Branding, marketing
Discounting
and design
10%
10%
Staff training 7%
Discounting 10%
Count
0 20 40 60 80
Staff training 7%
Figure 17: Levels of capital investments made in 2014 and related purposes
Figure 17: Levels of capital investments made in 2014 and related purposes
Count
Capital investments in 2014 Investment purposes
Capital investments in 2014 Investment purposes 0
Figure 19: Attitude 20
towards increasing 40 available for employees
quality of training 60 in future 80
To enlarge current
Above £100K
Other premises
purposes To enlarge current
Above £100K
Between Other premises
12% No 14%
£50K-100K investments 21%
purposes To purchase new
Between 8% premises
12% 31%
No 14%
7%
£50K-100K investments 21% To purchase new
Interested in
8% To purchase premises
22%
31% or expand
transport fleet
15% 7%
No taking part to a
To purchase 59 (22.7%) SIBA-led training
27% or expand 15% 43%
Between
£50-10K
22% transport fleet
scheme?
Invested less To modernise
27% than £10k 43%
equipment
Between
£50-10K
Yes: 91.3%
Invested less To modernise No: 8.7%
than £10k
Yes
equipment
201 (77.3%)26 27
Figure 20: Importance of Small Breweries’ Relief for breweries (percentages in brackets)
Not important: Quite important:
6 (2.3%) 6 (2.3%)
Important:
14 (5.4%)
Very Important:
49 (18.8%)
Vital:
185 (71.2%)
Figure 21: Future plans for investments
Figure 21:
30%
Future plans for investments
30%
25%
25%
20%
20% 15%
64 57 69
10% 58 61 54
15%
43 38 42 49 51 50
64 57 69
5%
10% 58 61 54
15 15 15 16 19 18 15 17 17
43 38 42 49 51 50
0%
No 1-10% 11-25% 26-50% 51-75% 76-100% >100%
5%
■ Increase production ■ Increase sales ■ Increase turnover
15 15 15 16 19 18 15 17 17
0%
No 1-10% 11-25% 26-50% 51-75% 76-100% >100%
■ Increase production ■ Increase sales ■ Increase turnover28 29
2.6 Your Brewery and SIBA
Breweries expressed their views in relation to services and benefits
associated with their SIBA membership. These were ranked in terms of KEY POINTS
importance by using a Likart scale with factors ranging from 1 to 5 (1 • Majority of members indicate SIBA’s
= least important and 5 = most important). The survey questionnaire campaign in defence and for the
proposed 22 specific services and benefits; the ten most valued by development of Small Breweries’
members have been ordered and shown in Figure 22. Relief as an extremely important
activity
The defence and development of instruments in support of breweries,
such as Small Breweries’ Relief, appear to be significant by members, • Political lobbying by SIBA on behalf
with 55% indicating these as the most important services and another of independent breweries is also
14% as a relevant service. Similarly, political representation and considered very important
lobbying on behalf of independent breweries generally, is also seen • Organisation of beer festivals and
as a significant service (64% cumulative comprising ‘most important’ competitions and SIBA’s Direct
and ‘relevant’ responses), followed by the organisation of beer Delivery Scheme valued as initiatives
competitions and festivals (52% cumulative). by members
• Results support SIBA’s new
Conversely cellar services, advertising opportunities, support related
strategies to build improved
to Cyclops and dealing with alcohol issues are valued least in terms
member benefits including
of significance by members. A question inserted in the questionnaire
campaigning, beer competitions,
asked to indicate the level of importance of other services or benefits
improved communications, training
not included in the pre-defined list. Among the 32 responses
provision and quality auditing.
generated, the provision of training and improving access to website
and information were frequently mentioned as the most important,
together with an expansion of the Direct Delivery Scheme and
improved quality control checks/audits.
Figure 22: Services and benefits offered by SIBA and ranked by level of importance
Advertising Opportunities
Annual Beer Report
Beer competitions and festivals (regional/national,cask/keg/bottle)
Brewing technical support, including helpline and training
Commercial/sales initiatives, business development, eg exporting
Cellar services
Centralised purchase schemes - eg glasses, beer mats
Container management - NCRNet, SPA-Trak, colour-banding
Cyclops - support and accreditation subsidy
DDS
Dealing with alcohol issues
Defence and development of SBR and PBD
Legal and business support, including helpline
Political representation - lobbying at national level
PR support
Regional representation (trusts, meetings)
SIBA BeerX event (AGM, Annual Conference, Trade Exhibition etc)
SIBA Business Awards, including Design Awards
SIBA Toolbox - members’ intranet and internal communications facility
SIBA Journal
SIBA Website
Supplier Associate members - trade directory, discount rates
0% 10% 20% 30% 40% 50% 60% 70% 80%
■ Most important ■ Indifferent ■ Least important30 31
SIBA’s Direct
3.
Delivery Scheme
Responses to this year’s survey suggested that, on average, only around 5% of a
member brewer’s sales were made through the SIBA Direct Delivery Scheme (SIBA DDS).
However, this low figure belies the importance that SIBA DDS has had over more than
a decade, since its inception in 2002, and does not adequately reflect the impact of
the scheme in bringing a huge choice of quality, locally-brewed beers from over 550
participating brewers to, in 2014, some 2400 pubs in the UK.
The idea is simple – by providing a centralised administration service, handling the
whole process from order capture to final invoicing, SIBA DDS enables small brewers
to trade in their heartland with pubs owned by multiple retailers, companies which are
typically much larger than the supplying brewers, and often based many miles away.
As the Figure 23 below demonstrates, the annual turnover of this wholly-owned, not-
for-profit sales agency has continued to grow over recent years, from £6.5 million in
2006-07 to £13.6 million for the year to Sept 2014 with an average annual increase of
14% each year.
Figure 23: DDS Annual turnover
£/thousand
15,000
14,000
13,602 ◆
13,000
12,110 ◆ ◆ 12,138
12,000
◆ 11,377
11,000
◆ 10,777
10,000
◆ 9,817
9,000
8,000 ◆ 8,091
7,000
◆ 6,500
6,000
5,000
2007 2008 2009 2010 2011 2012 2013 201432 33
Comments and suggestions
Please send your comments and
suggestions on the Beer Report
addressed to Mike Benner, Managing
Director at sara.knox@siba.co.uk
You can download a copy of the report
at www.siba.co.uk/beerreport2015
Thanks
Mike Benner and Ignazio Cabras would like
to thank all the SIBA members who took
part in the 2015 members’ survey.
Published by SIBA, the Society of Independent Brewers
PO Box 136, Ripon, North Yorkshire HG4 5WW
Tel: 08453 379158
www.siba.co.ukwww.siba.co.uk/beerreport2015
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