5 The future of brewing: where next?

So it's interesting when we look at consumer patterns of alcohol consumption, because, obviously, that has a direct impact on what we're brewing here here at the brewery, and if you went back about 30 years, something like 90% of beer consumed in the UK was consumed in pubs, and the other 10% being consumed at home. Last year, it was about 50-50. In fact, I think slightly more beer was consumed not in pubs than was consumed in pubs. So there's been some huge behavioural changes. The lunchtime pint has disappeared, and so on. But also during that time, we found that people have become a lot more interested in provenance, in traceability. They want to know about sourcing of their food and their drink, and they're very keen to know what they are ingesting, if you like. And if you went back 30 years, most of our business would have been local. And it's very much in terms of behaviours and demographics, and the pub was very much a default activity for a lot of people. Now, there's so much competition for-- if you like that leisure pound. It's produced a very different landscape, a very different market. So we're producing a much broader range of beers to satisfy different consumer tastes. Some of those are new recipes, but in fact, some of them are retro recipes. And we have all the old brewing records so we resurrected a beer called double stout back in 1996. And again, talking of demographics, we stopped producing double stout in 1917 because, at that time, we were producing our own malt, growing our own barley, and producing our own malt. And to produce some of the very dark malts for a dark beer, you need a lot of energy, so a lot of coal and Coke for your kiln. Well, all of the coal and Coke was needed for the First World War for the Royal Navy. So it was interesting how that, in itself, had an impact on a beer style. So we resurrected that. We've also done some newer beers. There's a renewed interest in particularly hoppy beers, golden beers, often using hops from abroad. And we brewed our first beer in 2005. Well, we thought our first beer using American hops. But then, looking back in some of the old brewing books, we were using hops from Oregon back in 1908, when there was a shortage of supply in the UK. But what we're doing now is very important to satisfy that consumer need. People are drinking less quantity. But they're generally drinking a bit more quality, and they're a lot more exploratory, have a lot more interest in different flavours and styles. And again, 30 years ago, I think there were probably 500 brewing companies in the UK. Now, there are nearly 2,000 because there are lots of smaller people entering the market and really satisfying that consumer choice. So we've had to address what we're doing. In some ways, it becomes a lot more complex because you may be brewing five, six, seven different beers during a week. Whereas, again, 30 years ago, we brewed a bitter and a strong bitter and some mild and that was it, and we sort of sold all we could brew then. But with changing habits and more competition, so it's very much focused on that quality side and producing the right beers. So that brings some complexity needed in terms of tweaking processes and, perhaps, looking at bits of equipment. We now produce some beers that need a longer storage time here at the brewery. So that's meant investing in tanks and so on so that we can store the beer here. Obviously, if you're storing beer for four or five weeks here, that's longer than we would normally with our cask conditioned beer. So that has an impact on cash flow, working capital, and so on. So it's great fun brewing beer, but there is quite a strong business practise that we need to follow behind that.