Craft beer and good food lead pub revival

Craft beer sales rose by 79 per cent​​ in the year to August 2013, representing 1.9 per cent of total beer volumes sold, and many pubs big and small are jumping on the craft bandwagon.

Stonegate Pub Company announced yesterday the £260,000 refurbishment of the former Varsity pub in Durham, which will be renamed The Library and specialise in craft beers. The drinks menu will offer a choice of five regularly rotating craft beers on tap, with the option to try three at once with third pint taster trays.

Reopening on 23 May, the pub will have a range of cocktail and food options, a grab-and-go counter and a ‘secret DJ feature’ allowing customers to play music from their phone in the venue.

Today also sees the opening of the Dragonfly Brewery at the George & Dragon in Acton, London. Headed up by Conor Donoghue, who previously worked at the Lamb Brewery in Chiswick and The Botanist in Kew, the venue produces 1,200 litres of cask and kegged beer per brew, and aims to be one of the largest brewpubs in London.

Launching with four beers including a deep bitter, a pale ale, a Bavarian style wheat beer and a dry stout, the brewery will also introduce niche and seasonal brews, such as a fruit beer and a golden ale for the summer, as well as an aged Dopplebock beer. The menu has been crafted with beer in mind, and often uses the drink as an ingredient.

Phil Tate, chief operating officer at CGA Strategy, told BigHospitality: “Over the last five years we have seen 12,000 outlets close in the marketplace and over 6,000 outlets come in. The outlets that are coming into the market are very different to the outlets going out. They are much more customer-centric and customer-focused so are offering a higher quality.

“So as such we are seeing the world beers, craft beers and cider in particular benefiting from this. As people are starting to look at their ranges they are starting to look at the customer base and ask what they want.”

CGA forecasts an 8 per cent rise in food pub​​ openings by 2018, compared to a 12% drop in wet-led pub outlets and a 15 per cent fall in the number of sports and social pub venues.

“It comes back to the changing nature of the outlets themselves. They are more family and food orientated. If you look at the outlets that have closed, 60% of sales were in the beer category whereas outlets coming into the category, 60% of their sales fit outside of the beer category.

“People are being much more female focused, 40-50s, family oriented as well. What comes from that is a more diverse range, with more premium beers and ciders,” added Tate.

Pubco buy-outs​

Large pub companies are gaining even more market share​​ as small pubs struggle to stay open. The latest examples of this include the sale of 274 Greene King venues to Hawthorn Leisure for £75.6m, and purchase of The Pheasant in Wellington, Shropshire, by Everards Brewery.

Everards invested £390,000 in The Pheasant, including acquisition, refurbishment and addition of the brewery. Of that sum, £20,000 was a building regeneration grant from Shropshire County Council. David Goldingay, founder of Wrekin Brewing Company (formerly known as Ironbridge Brewery) will run The Pheasant, and invested £55,000 in the project through his firm.

He said: “The Pheasant will serve lunches from its new kitchen and open from 10am for coffee. It will also have nine cask ales and ten keg beers, including several craft keg brews.”

The Pheasant is part of Project William - a scheme in which the Everards teams up with microbreweries and ‘cask ale champions’ to purchase and revive struggling or failed pubs.

Competition on low price​

Other pubs are choosing to deal with the increasing competition from supermarkets by offering £1 drinks. Manchester recently welcomed its second ‘pound pub’, selling half-pints of no-frills alcohol for £1, and pints for £1.50.

The government is expected to roll out a ban on below-cost sales of alcohol from 28 May, under which a 440ml can of 4 per cent ABV beer will have to cost at least 41p, among other measures.

The Association of Licensed Multiple Retailers (ALMR) has welcomed the policy, but is urging the government to do more. Strategic affairs director Kate Nicholls said: “This is a step in the right direction towards tackling the continued problem of very cheap alcohol which the ALMR first identified in evidence to the Competition Commission in 2006.

“With more than 70% of alcohol now consumed away from the safe, supervised environment of a pub or bar - and the latest research showing two thirds of consumers citing price as the main factor behind that – we need swift, tough and effective action not only to tackle pocket money prices but to impose the same regulation of promotional activity in the off trade as pubs, clubs and bars currently face.”

Figures released by the government last year showed that between them six out of seven supermarkets sell 220 million litres of alcohol below cost each year.