Category Archives: Beer Industry

What Keg?

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Keg menagerie in my kitchen

Keg menagerie in my kitchen

OK – so… I’ve been asked about four times by different brewers about what I think of the various sorts of kegs UK breweries are using. Each time my thoughts are expanded and now I have nearly 2000 2500 words worth of blather about kegs. I don’t have time to clean it up much… but I’ve been left with an unexpected gap in a day so… here is is, in pretty raw “brain dump” form.

Here’s my thoughts on a few of the keg types I find amongst the menagerie in my coldstore. Note that my own views are from the handling end – I’m a distributor not a brewer. I’m used to dealing with all these from receipt from brewery through to dispense of beer – helping pubs get beer serving, and serving beer myself at events

With respect to costs I suggest brewing folk talk to other brewing folk as, like I said, I am not a brewer so any vague cost info below is 2nd hand!

[Or skip to bottom for a TL;DR]

Conditioning

First, an aside on conditioning. Some folk simply fill their kegs the same as they fill their casks with final conditioning occurring due to continued fermentation in the keg. This is often a source of pain… venting a cask is usual, venting a keg is something UK pubs no nowt about. So unless you’re accurate with your conditioning in the keg then you’re going to have problems with returned beer. I’m finding more breweries are shifting to getting final condition nailed in CT before filling to keg. Then again folk like Moor seem to keg condition consistently and reliably. YMMV… I’d say it is a subject you’re best off talking about with breweries who use different methods of keg filling/conditioning.

Conditioning in kegs also means you want (IMO) to instruct pubs to let their kegs settle for 48 hours before connecting. (A lot will ignore this unfortunately.) Whereas racking relatively-bright to keg causes less “London Murky” hassle. [KeyKeg is a bit of an exception as it draws beer from the top and not via a spear, so you’ll have brighter beer sooner.]

I know a few folk who rack brightish into keg and then force-carb in keg… but this looks like a right pain. Time consuming and thus unscalable. Get yourself a CT!

Brewery Steel Kegs

Summer Wine Brewery kegs and casksYour very own steel kegs… Easy to handle. Robust. Expensive up front. And as much of a pain to track down and repatriate as your own casks. But breweries are used to handing cask tracking so just the same really. You also obviously need specialist keg cleaning equipment. Although I know at least one brewery de-spears their kegs for cleaning… and so far doesn’t seem to have killed anyone.

Most breweries with their own kegs have them in 30l with Sankey connectors. But I’ve seen a handful about who use A-type connectors, and some 50l kegs – 50l size is great for house lagers, etc… beers that sell in volume.

Summer Wine Brewery are an example of a brewery with a good population of their own kegs. SWB use 50l kegs for the 4.1% Pacer too. Another example is Outstanding brewery in Bury who have 50l A-type kegs – and focus on “house lagers” & Guinness-alternative stout markets – i.e. good quality indy replacements to mainstream “macro” lagers and Guinness.

With respect to keg size think about the market you’re targeting. The “rotational craft beer” market seems to be mainly about 30l keg sizes.

From an environmental PoV I side mainly with reusable steel kegs when it comes to selling beer to the UK market. I don’t trust the effectiveness of the recycling chain to be a great fan of any of the plastic kegs on “eco” grounds (EcoKeg do take reuse/recycle very seriously mind you!). The UK just isn’t big enough for the weight/transport issues to be a major concern. (But by all means use 1-way kegs for export…)

eKegs

eKegs

eKegs

Close Brewery Rentals e-kegs – same as your own, but perhaps a better way to start out for some. I don’t know what the single-fill cost of an eKeg is but I am told it is “about half” that of what most are paying for KeyKegs. (Some breweries list eKeg vs KeyKeg pricing and charge less for beer in eKeg – some just average it out.)

The biggest drawback of eKeg is, I suspect, that you can _ONLY_ shift them to registered distributors such as myself. If you want to sell keg direct to customers you then have a problem. (I see plenty of abuse of the eKeg/Cask situation… which just drives up the cost for everyone so makes little sense. Don’t do it. [And I will report any significant seeming abuse, as per the spirit of my contract with Close Brewery Rentals. Albeit I gather a handful of breweries have some special arrangements with CBR on this front.])

Some breweries who use eKegs: Buxton, Five Points, Hardknott – worth noting that these three entirely, or almost entirely, shift their keg volume through distributors. Five Points & Hardknott also have a population of their own kegs for direct distribution.

I have never had any technical issues with steel kegs with respect to coupler connections, leakage, breakage, or handling. (I have had the odd over-conditioned one, but this isn’t the keg’s fault.) Fifty litre kegs are a hassle to handle, but not too bad, and no trouble compared to kils (which I currently handle an increasing number of).

[I would be happier if Close Brewery Rentals didn’t call them “Craft EKegs” however. Grrrrrr…] 

EcoKegs

EcoKeg - the 30l keg that is the size of a 50l keg.

EcoKeg – the 30l keg that is the size of a 50l keg.

Available in different coupler types, but best to use Sankey as that’s what everyone else uses. The EcoKeg is a 30l top-pressure keg that works effectively the same as steel kegs. The Sankey connector is sturdy and I’ve never had any trouble using them. Breweries can buy these pressurised and ready to be filed as per a normal keg. Alternatively you can buy them with the top loosely screwed on so you can unscrew and rack beer in exactly as you do for cask.

As an added bonus the robust outer on an EcoKeg is opaque to light – and the inner bladder uses an O2 scavenging plastic.

They’re also part-reusable… under the name ReKeg. The inner bladder with connector can be removed and replaced with a new one.

EcoKeg with "Bladder" removed.

EcoKeg with “Bladder” removed.

The kegs can be (and are) collected by EcoKeg to be “ReKegged” at their facility in South Wales. Or EcoKeg can tool up your brewery to do the “ReKegging” yourselves. This way you can just have the bladders shipped to you and reuse your kegs.

I’ve no real handle on the costs of EcoKeg – especially with the ReKegging in mind, and TCO if you’re doing your own ReKegging. Speak to a brewer about this, or EcoKeg themselves.

Manufacturer in Wales can re-use or re-cycle all parts except the rubber washer. (And they're working on that.)

Manufacturer in Wales can re-use or re-cycle all parts except the rubber washer. (And they’re working on that.)

The most well known user of EcoKeg I know is Moor – who also take advantage of how easy it is to condition in EcoKeg. Moor keg is consistent and reliable so in my mind prove both EcoKeg and keg conditioning can be a good thing.

As a distributor I’d be happy to see more EcoKeg about. I also collect EcoKeg empties which can be palletised for collection by EcoKeg. (No cost to me except storage space.)

EcoKegs have the disadvantage of being the size of a 50l keg despite being only 30l. But a storage advantage that they stack – which is nice. But they’re not as space-efficient as KeyKegs.

KeyKegs

Slimline KeyKegs stack nicely.

Slimline KeyKegs stack nicely.

I have written about KeyKeg before. And Magic Rock have an informative post regarding KeyKeg dispense. (I tidied up that flowchart for them!;)

KeyKeg is possibly the most widely used “craft beer” keg packaging – and this is probably why it is possibly also the most discussed, and ranted about. The old cardboard-outer spherical KeyKegs attract a lot of dislike. They melt when wet, degrade rapidly with being moved about, and have a habit of dropping their balls. Unfortunately British weather tends to the damp side and sadly British cellar too… this doesn’t help.

Squashed Beavertown Keg

KeyKegs compact down nicely.

However for the most parts the complaints are about the handling and the outer part of the packaging and this has now been fixed. The new “slimline” KeyKeg is, in my opinion, quite awesome. Easy to handle. Seems to be robust. Stacks beautifully too. Takes up less space in my coldstore than EcoKegs, and even steel kegs in a way. (More vertical, more stackable.)

The next complaint most often heard is that you need a special coupler for them. But folk like myself and breweries who use them tend to stock these. I sell them to customers at near-cost, which is about £38 ex-VAT. Brewfitt stocks them at reasonable prices now too.

Old-Style "Cardboard KeyKegs"

Old-Style “Cardboard KeyKegs”

One note is that pubs using KeyKegs really need regulators with gauges on as the usual 1st-stop to solving fobbing problems with them is to turn up the pressure. (Max rating on a KK is 51psi, mostly they work find at about 20 at cellar temperature, but I tend to run them at 30psi by default.)

Breweries who chose to use KeyKeg include much of the cream of the UK “craft beer” crop: the likes of Beavertown, Magic Rock, Thornbridge…

Old-style cardboard KeyKegs are flimsy and their balls escape.

Old-style cardboard KeyKegs are flimsy and their balls escape.

And I believe they choose them on the basis of beer quality. With KeyKeg the brewery gets the beer exactly how they want it and then packages it in a format that makes it harder for someone else to bugger it up. No CO2 top-pressure means no probs with the pub messing with the carb, or being cheap and using air top-pressure to dispense beer (it does happen). In fact KeyKeg makes dispensing with compressed air a perfectly reasonable thing to do. KeyKeg also reduces risk of contamination of the beer. I’ve seen CO2 lines in pubs that don’t look like they’ve been replaced for over a decade. I’ve seen some that seem have had beer backed up the lines even (and presumably never cleaned/replaced). Not to mention the sad state of coupler cleanliness I’ve spotted in places too. Line-cleaning via your coupler is great – but is not where coupler maintenance ends!

The new SlimLine KeyKegs are easy to break down to toss in the recycling too. Just how recycling-friendly they are I do not currently know however.

Dolium

Dolium: the keg that falls apart and leaks beer

Dolium: the keg that falls apart and leaks beer

I don’t like these. I’ve had more trouble with them than any other form of keg.

Technically they’re the same as a steel keg, or an EcoKeg… top-pressure with spear. Folk can and do condition in them.

My problem with them is they’re not robust. I picked one up the other day and the whole top handle part fell off, and then it started leaking.

Another one that arrived recently was leaking from the connector.

Leaky Dolium

Leaky Dolium

I’ve had endless problems with the coupler seating on Sankey type ones – finding no way to get the coupler connected without having a leaky seal and thus losing (a little) beer over time and making a mess.

From another PoV I know brewers who will not use them simply because they do not trust putting their beer into anything they can see through. No matter how brown it is.

The brown plastic is another matter – apparently the recycling chain pretty much isn’t interested in this stuff and its recycle value is low to zero.

One plus of Dolium: they stack. They use about as much storage space as KeyKeg but aren’t quite as stable/sturdy when stacked.

Apparently they are cheap. They definitely seem it.

PETainers

Just don’t. Really. NO!

Only reason I’ve had less trouble with them than Doliums is that nobody uses them any more. Last time I used a PETainer the spear actually fell out internally and I had to prop the keg up upside-down in order to dispense beer from it. Every PETainer I have used (about 4) has given me trouble of some sort. Their Sankey connectors seem to be even worse than Dolium.

A note on Sankey

Brewers: Put a fucking cap on it...

Brewers: Put a fucking cap on it…

For what it is worth I actually really dislike Sankey connectors. And doubly dislike breweries who ship Sankey type kegs without caps on the connectors! (Too many do this! They’re cheap… BUY. SOME. FFS.) I’ve had some that don’t even seem to have been post-fill sanitised by the brewery. The sankey connector is a grime-trap and a pain to clean. By comparison sanitizing an A or G type coupler in the cellar is trivial and quick.

But Sankey seems to be the defacto “craft keg” standard… so on those grounds perhaps the best choice for your kegs if you’re not going the KeyKeg route.

A-Type keg connector, so much more sanitary!

A-Type keg connector, so much more sanitary!

A Sankey/S-type coupler

A Sankey/S-type coupler

There are other kegs out there…

Not often seen, I’ve had some foreign beers in various forms of 1-way keg I can’t recall the names of. There are also EcoFass kegs that are a bit like KeyKegs (beer-in-bag) and a new entrant to the UK market is Emmerald. I expect we shall see more takes on the 1-way & plastic keg over the coming years.

In conclusion, the TL;DR:

The answer is not so simple. I’m happy to work with steel kegs, KeyKegs, and EcoKegs… they each have different properties and advantages. It is up to the individual brewer/brewery to determine what works best for them from the options available. I like the sheer robustness and handling of steel kegs, I like that EcoKegs are light as well as robust and highly reusable, I like the technology of KeyKegs as well as their compact and stackable form-factor.

I do not accept PETainers from breweries, and I think I’m resolved now to no longer buy beer that is packaged in Dolium. After one broke, dropped on my foot, and then leaked everywhere the other day I’m doubly unhappy with the things. (I was wearing steel-cap shoes thankfully!)

Broken Dolium

Broken Dolium

The impact of duty/excise on the price of a pint

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Captain’s log, additional… 

OK – yesterday I posted about gross profit, what it it means and how it compares between beers and pubs.

@YeastieBoys remarked that it is worth noting the impact of excise (duty) on the cost of beer. A definite factor, and one to be aware of – even if it is unlikely to change and thus a bit futile to worry about too much. But definitely worth having a good grump about from time to time…

In the UK at the moment the full rate of duty is £18.37 per-hectolitre-%… (a hectolitre is 100 litres, or 176 pints) i.e. on a hectolitre of 5% beer you’d pay £91.85 in duty. But only if you’re a “big brewer” – one that brews 60,000 hectolitres or more. A “small brewer” who brews no more than 5000 hectolitres pays half the duty rate. And there is a “progressive” rate between these two sizes. This is due to the progressive-beer-duty scheme which is intended to give start-up breweries a boost to counter the economies-of-scale unlocked by being bigger. (There is debate over whether or not this discount is right, too much, or too little…) I’ve illustrated the progressive beer duty scale previously.

At the end of the day duty is a part of the production cost of beer. Breweries pay it and factor it into their price. Then pubs calculate their GP on this price, typically as a %, then VAT is added also as a %. So duty gets amplified such that it can have a significant impact on final price.

Regardless of the price of a firkin of beer (ignoring economies of scale) the difference between half duty rate and full after amplification by a typical 65% GP* and 20% VAT is always 74p on the cost of you pint. (The reality is that large breweries economies of scale allow them to sell firkins at the same price as small breweries so this difference hits the brewery books but not the consumer.) And between a zero duty rate and the current full duty rate the difference in price is amplified such that the difference to the consumer can be seen as a whopping £1.48… £1.96 at no-duty versus £3.43 at full-duty. I.e. £1.48 of your 4% ABV pint from a big brewery is added purely as a result of duty.

So if duty was scrapped entirely we could probably enjoy more than a quid off the price of a pint. Wouldn’t that be nice!

 

It isn’t so simple of course – if the taxman had to lose the huge pile of £ made out of the duty and amplified VAT he’d have to tax us in other ways. Perhaps more equitible ways though? Do we really think the cost of alcohol to society is equal to the amount of £ raised by the level to which it is taxed? (I really don’t know – the beer industry would likely say ‘no’, but the schmucks at ‘alcohol concern’ probably think it needs even higher taxation!)

I expect I’d personally be in favour of scrapping or massively scaling-back beer duty and increasing VAT to 25%… but I’ve done no sums to support the total economic impact of such a change. This is just wild, and probably pointless, speculation at this point.

It is worth noting that across the EU beer duty varies… the UK is one of the highest.

There is very detailed comparative information in a PDF right here, this is from 2014 and is the pre-reduction rate of UK duty. Here’s a quick summary of how my £45-quid firkin would fare in a few different countries – all other things being equal. This is making all manner of assumptions… also I’m totally unsure of my translation of the German/etc hectolitre-degree-Plato duty to a roughly equivalent UK hectolitre-% rate. Think of it more as: were taxes from <country> applied within the UK context:

I’ve included both the pre-2015-budget “penny off a pint” rate and the current UK rate. At 4% it really is about a penny off a pint, which is then amplified to 3 pennies by VAT & GP. Woohooo…

So… there you go. Google tells me the average price of a pint in Germany is £2.12 so the above seems not too far off. Time to move to Germany!

* typical 65% GP – I say this as my observation here in Cambridgeshire. Across the country this varies. Rents and wages are higher in Cambridge than, say, Hull – so where I pay £3.50 for a pint of a given type of beer I know some folk up north are paying £3.00 or even less. All the numbers above scale with the change in GP. If you want to play here’s the spreadsheet.

Gross Profit – why £6 is a good price for a pint of Gamma Ray

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“Ich habe Pläne große Pläne” – Rammstein, Stein um Stein

No no, wrong take on “gross” – this is definitely not about making an obscene amount of profit… I’m writing about “gross profit” as in “GP” – a term often heard when industry folk are talking about beer prices. I have written about GP before, with a focus on the role of the distributor in pricing – in this post I focus more on the pub and the beer. The motivation comes from recently having had £4.50 pints of Beavertown Gamma Ray being compared to £3.00 pints of £60-per-firkin bitter as if the Beavertown ought to be closer to the £3.00. As it stands £4.50 for a pint of Gamma Ray is near unheard of as that is pretty heavily discounted for promotional purposes.

GP is the “gross profit” made on goods sold. That is the margin made by the business in ex-VAT terms. If I sell pints of beer for a bargain £3.20 per pint I have a revenue of£2.67 per pint once the 20% VAT is scraped off. If that pint comes from a cask that costs me £60 (about normal for a local “boring brown bitter”) then each pint is costing me 86p (assuming a 70 pint yield per cask). So my gross profit on a pint is about £1.81… typically GP is expressed as percentage – this is the percentage the gross profit is of the revenue and in this case is 67.9%. This would be considered “pretty healthy” by most pubs.

When pubs talk GP they’re generally speaking of the average for the beer they sell. They’ll be targeting some specific figure that suits their overall business plan. This can be anything from as low as 40% in a countryside tied pub that probably survives only on profits from non-drinks sales to 70% in a city-slicker freehouse which might get away with being pretty much “wet-led” (most income is based on drinks). Two extremes of the pub spectrum.

All business situations are different – tie, location, rent, staff costs, etc. There’s a good breakdown of the costs of running various sorts of pubs available from the BBPA. There isn’t a one-size-fits all when it comes to GP. Yet customer expectations set a pretty narrow band for acceptable pricing of a pint, a trend now being a little broken out of by the “craft beer” scene. Still – a tied pub next door to a freehouse can hardly sell equivalent beer for a quid more per pint than the freehouse… so it typically makes a significantly lower GP on beer.

Let us look at a well known brown bitter as an example, a “20th century IPA” style of thing at about 3.6%. I’m talking about Greene King IPA of course. This is available on the open market at pretty low prices, I’ve heard of pricing as low as £55 from one reliable source. Meanwhile I know one Greene King landlord who pays £99. These prices are all ex-VAT, as is the way of these things. The problem is both pubs have to sell this beer for about the same price… in Cambridge let us say this is £3.20 in the freehouse and £3.40 in the Greene King place. The Greene King place isn’t going over the top on the price and there are plenty of drinkers in Cambridge who won’t be at all fussed by 20p if the pub is otherwise pretty good.

Pricing: Tied vs Untied

The freehouse GP here is a very healthy 70.5%… but the poor old Greene King pub is only at 50%. Keep in mind that these are pretty much extremes and there is a range between them, and then things differ again per beer and per pub.

The GP as a % versus “margin” in £ is important because punters generally only go out with so much £ in their pocket. Most people are living within a finite budget when it comes to luxuries like having a pint. The freehouse is making more per average customer. If the tied pub want to achieve similar profits it has to sell more volume (be larger, be in a better location) and/or shift other products – i.e. turn into a gastropub. Or maybe it can get by just fine as a wet-led pub simply making less profit… like I said before, every business situation is unique.

So that’s GP – and GP compared for tied and untied pubs. Now I get to the next core point of this blog-post: what does this mean for “craft beer” and why does my pint of Beavertown Gamma Ray cost me six bloody quid?!

Great tasty beer costs more. I won’t try to explain why – there are plenty of debates about how reasonably, or not, it is priced. All I’ll say is the brewers I know brewing what I think of as awesome craft beer are mostly working at capacity and expanding. Textbook supply-vs-demand means they can command a higher price for their product – within reason. Flavour is a factor, ingredients, and quality – but big factors are also fashion and brand… the best have all of these right. These folk haven’t founded a brewery with the aim of competing in the lowest-common-denominator end of the market. If this craft beer also happens to be in keg it’ll cost even more per pint, another debate to be had (and has been had) elsewhere.

In my opinion Beavertown stuff is reasonably priced, in the grand scheme of mid-5%s kegged craft beers. A pub will be typically paying anything between £85 and £100 for 30 litres of this lush 5.4% beer – depending on location, volume, and supply chain. For some calculations below we’ll pick £95 for a 1-off keg purchase in a very craft-keg-rotation-happy bar. This is to compare to the same bar buying any one of a dozen mid-3%s local bitters at £60 for a firkin.

We’ll say you get 52 pints out of a Gamma Ray keg, so a pint is costing £1.83 – more even than the pint of *tied* Greene King IPA (£1.42). But at £6 per pint the GP the pub is making on this beer is 63.5%. Most freehouse crafty places I know are aiming for the 65-70% GP range. They’ll cut a bit from target GP selling Gamma Ray at around £6 but balance this out by selling a “craft lager” at £4.50-£5.00 and higher GP (in the 70-75% range).

But, the punter says, a 70% GP pub selling a 3.6% 20th-century-IPA (brown bitter) is only making £1.88 from my pint – but this craft beer bar is making £3.18 from my 5.4% new-wave IPA… the profiteering SCUM! Fuck’em!

It doesn’t work like that. Going back to my point of punters with only so much £ in their pocket. Their limited beer cash might get them 4 pints of bitter or 3 two-third glasses of modern-IPA. Either way your business needs its target cut of their precious limited £… and in the above numbers a freehouse will make £7.24 out of the £12.80 worth of bitter and £6.36 out of the £12 worth of modern-IPA. (In the graphic below we’ve assumed the lowest brewery duty rate, but it isn’t really going to make a lot of difference which rate is involved.)

Pricing: Keg vs Cask

So, at £6 per-pint the pub has just given you a discount on some pretty lush IPA.

That’s GP for you. And why you really cannot think a £60 firkin of 3.6% brown bitter ought to sell for a very similar per-pint price as a £95 keg of 5.4% hoppy modern IPA.

Check my working… hopefully I’ve got all the above correct. Here’s the spreadsheet to go with this post.

Whether the keg of modern hoppy IPA ought to be £95 is a trickier debate… but that’s the price and your choice is to have that beer at that price, or some other beer at a lower price. My experience of “cheap” keg IPAs so far has not been excellent, but there is some good stuff on the market at prices down to around £85 I think. Below that it mostly starts to get a bit suspect.

Keg: All Tied Up

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Tied Keg Tap

Tied tap

An impromptu #BeeryLongRead inspired by a little Twitter exchange earlier today. It’s a bit of quickly typed up “brain dump” really… little time for finesse with such things these days. I’m very keen to hear any other views on these things. Always learning, ever adapting…

I’ve spent the last year selling good beer to pubs & other drinks sellers – good beer in any format: cask, keg, bottle, can… cask is by far the larger volume market for me. There is a strong “freehouse” scene in the UK, with pubs that like their variety of beer on the cask pumps. And a strong drinker following for enjoying the variety they supply. (Yes, this is a minority of the overall drinking market, but a significant one.)

So – why, when you walk into these amazing freehouses, do you find on the keg taps alongside the cask a very predictable list of ubiquitous multinational-brewed products: Stella, Fosters, Guinness, Carling… here I offer my observations on this. Take note that a) I’m a newbie in the industry and b) I’m in the industry – and fight my own corner.

Anyway, why the lack of variety? Simple: nearly all keg lines in the UK are tied – including those in “free”houses. It’s an interesting situation really… the UK keg beer market is very much like that in New Zealand described here. [I don’t have a survey or stats to quantify any of this – it is merely observation from a year of working with pubs. I’d be very interested in any real data, or just other views on the topic.]

OK – but there’s plenty of complexity under the hood! The basic principle is this:

Beer company (Heineken say) says to pub: we’ll put all the equipment you need to serve these beers into your pub, we’ll look after it for you, you just have to buy the beer from us.

An attractive offer! Single simple delivery of all your keg products, and a whole load of stuff you just don’t have to worry about. The pricing for the “premium” keg brands is also fairly reasonable, and pubs can make a slightly higher GP on them (for the often higher-volume product). So it also subsidises those pesky cask drinkers who go apecrap if their pint costs 10p more than they think it should. (Spirits are actually better still, I’ve been told by many a pub they’d not be in business were it not for cheap vodka & whisky.)

Tied KeyKeg Coupler

Tied beer line…

Until recently there was very little cause to want to do anything else with keg. There simply weren’t diverse keg beer options on the market – you want ultra-premium, you’ve got -say- Hoegaarden and Leffe… so against the rise of cask ale the big brewers and distributors got themselves very solidly embedded into the freehouse market. And it was pretty much good for everyone. (Yes, there were always a few outliers – bars with knowledgeable enthusiast landlords who get hold of special imports and carved their own niche.)

But now things are changing. Small brewers are toying with keg, led perhaps by BrewDog’s bold positioning of switching over to being keg-only. Keg has various technical advantages – which can be discussed another time – and some folk simply prefer the beer the “keg way”. Usually folk inspired by European and American brewing. BrewDog were far from the first of course – Meantime, Camden, Freedom, and others were forging themselves little keg empires of their own already – with a big focus on supplanting mainstream premium lagers.

Speaking of these lager brewers – they had the strategy that was necessary to crack into this keg market. You’re a small brewer wanting to get your beer into keg, problem: how to you get that keg into a bar? All your locals have equipment owned by BigBrewCo and none of the publicans have the 1st clue about handling kegs beyond absolute basics. Put beer in keg… easy… but what next?

Those who successfully got their kegs into bars knew exactly what: put keg lines into pubs, follow the same model that the pub already understands. We start to see Meantime, Camden, Freedom, etc branded fonts showing up everywhere (in London and the South East at any rate). But this just means more tied lines! There’s a bit more diversity than before, but it’s still mostly “just lager”. The established-keg-breweries themselves provide a little diversity – pale ales, red ales, stouts… but all the same brands and little real “fun” to the beer. “Gateway beers”? Cask is still very much supreme for a tasty pint.

BrewDog’s little keg revolution changes this though – loads of little breweries now put their exciting beers into keg. But there’s a problem: the number of pubs with free of tie keg lines and clued up landlords is relatively minuscule. So now you’ve got dozens (hundreds?) of little breweries all vying for a tiny volume of keg throughput. Mostly relying on a small number of “craft” bars to get beer in front of consumers.

“Craft bars”? To me what it takes to make a pub or bar actually “craft” in ethos is total freedom and no compromise. We see places like the Euston Tap showing up – they know what they want, they don’t want to be tied up, they invest in their own equipment. Ostensibly they’re successful, others follow suite… we’ve now got a small raft of craft venues supporting these breweries. Cambridge 5 years ago probably had zero free-of-tie keg lines, now across 4 venues there are over 30 – and more to come no doubt. But that’s four venues in a city of dozens of cask freehouses. There’s a long way to go.

Coupler Fittings

Simple plastic fittings…

So what needs to happen to keep on growing this free-of-tie “craft” keg beer market? Pubs need to invest… in both equipment and know-how. Both are seriously lacking. I keep coming across pubs that have had free-of-tie keg equipment installed. But with only half the couplers they need, they don’t even know how to change a coupler on the lines, they don’t even have pressure gauges on their gas. They’re heading in the right direction but they need a lot of hand-holding in the short term. That’s what we have to offer – myself as a distributor, breweries to their direct clients. I fully support all keg beer I sell because this is necessary. I drove 80 miles to replace a simple plastic fitting last week – that’s how dire the state of knowledge in the industry is. The tied-keg-line status quo has done a good job of keeping landlords clueless and dependent.

Which raises that point too: the vast majority of publicans really don’t have a clue. After decades of fully supported keg lines the entire keg system is a black box to them. We need to help them skill-up, and really could do with a useful manual of keg system operation. I’ve done my BIIAB ABCQ – and it’s utterly basic, it teaches a reliance on Big Beer – which is of course relevant & correct for most of the current industry. We need something a bit more technical… I believe Cloudwater may be working on something in that direction. For the most part maintenance and operation of keg systems is actually pretty simple stuff, once you’ve got on top of some basic principles.

What’s next? Publicans need to be convinced that it is worth investing in the equipment. Because if I own the equipment in a pub I’ll pretty obviously want only beer I sell going through it – this is just sensible, there’s a cost to be recovered. What I want to do is support pubs in taking ownership of their own equipment, help with installs if needed, and then as part of the service of selling them beer offer full technical support – folk like me and all breweries selling kegged beer need to do the same to make it a viable option for pubs.

We need to get smart and start doing this now. Because the alternative future will be keg lines under the control of medium sized operators. Another recent conversation on Twitter I had was about Adnams. They’re aggressively going after the craft-curious market, sticking their kit in, and creating a craft-monoculture of Adnams/Camden beer across these eastern parts. Now I like Adnams and quite enjoy their Dry Hopped Lager. But this particular practice is pretty damn close to “craftwashing”. We’re getting a growing mid-tier of pseudo-craft-bars with an unchanging range, including craft beers like Bitburger… yes, I really have seen this billed as “craft” in several bars. (Camden and Adnams both deserve a place in a craft lineup… but unchanging lines of either and nowt else isn’t where it should be at.)

From both a personal and a business perspective it is very disheartening to have a good conversation with a pub about getting free of tie keg up and running for them, then to find a fortnight later that rather than that they’ve got the same two beers from Adnams as everyone else. The offer that the likes of Adnams has for these folk is simply too good… the price of stuff like Dry Hopped Lager is good too, as you’d hope. Adnams aren’t “the enemy” per se, they’re very nicely building their own market and if an Adnams tap is replacing a Fosters tap this is a step up. But… y’know… ho hum.

I’ve considered going the whole-hog myself, simply paying to put lines in, tied to myself. But it is so against my own world-view that I’m hesitant… but it is tempting.

There’s a long way to go on this. I’ve done my first full keg install for someone this year, and hope to do more – targeting the micropub sector a bit. I’ve spent a lot of the last 6 months helping folk understand keg, obtain couplers, and handle outlier support cases like “venting” various forms of keg. (Making up for brewery screw-ups, which comes and in hand with the micro/craft sector unfortunately.) It certainly isn’t trivial.

If we all support pubs in this way between us we can build the free-of-tie keg market. Giving publicans and drinkers more options – which is what it is all about in my opinion. It’s what I’m here for anyway.

Sadly necessary disclaimers, because everyone always seems to think that anything I say is all-or-nothing or black-and-white:

  • I am NOT saying that all bars and pubs need to be “craft beer” bars/pubs. This is very very far from what I believe.
  • I do NOT think that Fosters/Stella/etc need to be eradicated from the face of the Earth. Folk like drinking these beers, they’re the largest part of the beer industry, they’re not going anywhere and they have their place.
  • I LIKE ADNAMS – my favourite regional brewer by far, and by securing lines in pubs what they’re doing is simply good business and an attractive deal for publicans. If I were them I’d do the same, and they’re actually a bit “loose” with their tie – to my benefit!
  • I don’t claim that keg is superior to cask, I’d not claim the reverse either – they’re different and I believe both have their place.
  • I simply want more diversity in a small number of pubs and bars, and I see their lack of access to free of tie lines as an obstacle to my desired level of diversity. (And yes, I have a business interest in this obviously.)
  • Another topic: microbrewery keg pricing… a sticky issue and a definite barrier for publicans.
  • And the simple fact is that fancy keg beers are a harder sell for the publican. It takes a bit more work than shifting a pint of Stella. It’s definitely not for everyone… yet look to the “craft beer bars” and observe their apparent success. Why not give it a try?

Route to Market

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OK, I’ve got a general whinge to get off my chest. It’s about sales and route to market and the seeming immaturity (infancy?) of the wider British craft/microbrewing market. Take it with a grain of salt if you will – what would I know? I’ve only been in the market for 9 months. But as in everything I do my natural tendency to analyse & optimise is insuppressible. However, as any fellow computer scientist knows, obvious optimisations often aren’t as useful as they seem. So perhaps I’m barking up the wrong tree… I don’t feel particularly well qualified to be talking about these things… but I will anyway… I lie awake at night with all this sort of crap running through my head and I need to purge it somehow.

 

Small operators like myself are not simply shopfronts for beer. We’re very much unlike online retail for example, who have a wide customer base across the UK. To sell your beer we do a lot of legwork going out forming relationships with pubs, promoting beer at both a time and financial cost to ourselves. So if we’re doing all this hard work on behalf of a brewery and that brewery then go and sells to someone competing on the same turf it costs us – to small operators like myself it can be a huge blow to morale to boot. Bypassing the distributor and selling direct is very similar… we’ve got your beer into there, they’ve liked it, and after that effort of promotion and logistics (and financial risk) on our parts we’re cut out of the picture. Thanks folks!

I understand why bigger pubs may do this. If they get the same price from the brewer as the distributor then it cuts maybe 20p per pint from their costs, which could be as much as 60p to the consumer after being amplified by pub GPs. The onus here is somewhat on the brewery – the cost to them of effectively outsourcing sales to the distributor ought to be a sufficient discount on the beer to make it not worth a pub ordering direct. Across distribution for regions UK-wide (6 distributors, say?) the brewery is definitely saving themselves the salary of at least one full-time sales body. This secures the distributors’ route to the big customers, which in turn makes it possible for them to keep stock to shift to the wider market of smaller customers.

I’d like to see distribution valued higher by small breweries… of course I would say that though, I’m a distributor. So rather than just put that out there, here’s a couple of reasons this is good for you – the brewer:

  1. Marketing: You get an actual representative – someone keen on and loyal to your “brand”. If the distributor has the security of exclusivity then they can safely invest more in growing their business around your beers. No exclusivity contracts are needed, just a good set of ground rules laid down to define the relationship.
  2. Sales: You have a reliable go-to contact in a region that you can direct people to for your beer. If you have a willy-nilly bunch of distributors out there who can you point a potential new outlet to? All of them? Do you think pubs really want to chase your beer with 3 different contacts? Will those 3 distributors see buying a pallet of your beer as too risky in case one of the other 2 does as well?

Sure – we may start out as a relatively small account and also shifting a pallet to the chap next door may be quite tempting to a brewery keen on growth. But think long-term. Be committed in your relationship with one of them – to buy their loyalty and then ride with them as they achieve sales growth with your beer.

Further to that I’ll add why I think *I* am the guy you should go to. I care passionately about good beer, I’m no mere sales channel. I am versed in cellarmanship, beer care, and have a lot of beer knowledge. I work hard to ensure your beers go to the right venues and are served in good form. At our end everything is received and kept in temperature regulated storage until delivery – this is expensive in rent and electricity (as you as a brewer probably know).

Some breweries understand all this. Unsurprisingly if you knew which they were you’d be looking at a list of some of the most sought-after craft brewers in the UK. These guys value their route to market and through that relationship build a better sales channel. At times I resent it because I really want to be able to get beers from some of these guys to my customers but I cannot because they’re tied up with other folk in the region. But I respect this too… these guys are doing unto their distributors and I would have my suppliers do unto me.

Also, I’m a very small operator currently, only just starting out. So I can see why you’d want to sell to someone more established – the term “ability to execute” comes to mind. My small size makes my “ability to execute” low – thus I come with my own risks. (Who wants to do a Gartner Magic Quadrant for UK beer distribution?) Then again because I’m small I’ve got more personally invested, and more riding on making those breweries I work with successful for me. I’m also too small to deal with *all* the breweries I want to of course. So by all means if I can’t shift your beer look elsewhere. No worries at all with that. (I wish I could do all the breweries I actually have access to… but it is impractical at my scale unless I just want to be exist only in the crowded “guest ales” market.)

Anyway, please – take note – distribution is your sales channel to the wider UK market. Foster good relationships with your distributors, let them flourish with your brand – your trust in them will be returned by their willingness to invest in representing your brewery as best they can.

 

This is a bit of a wild thought-exercise on my part. And perhaps I just haven’t a clue. This is a most definite possibility. But something strikes me as broken about the way things work currently. I started doing this as the only one in my region focusing on what I consider the “craft sector”. Within three months 2 other distributors had shown up, both started by folk signed up to my mailing list. Both approaching many of the same breweries. Which makes no sense – why sell the same stuff? There’s loads to choose from out there! I should be flattered perhaps, I’ve clearly chosen the best… but that is a small consolation for ending up in some daft & unviable “price war”. Don’t get me wrong – competition is a fine thing, and part of how any market works. But forging stable business relationships is part of how markets work too. It’s just common sense, no?

I cannot of course separate the thought process from my own involvement so like any such a thing is it a POINT OF VIEW. And points of view are subject to bias and quite often not well grounded in fact. At the same time I have thousands of my savings invested in a business with which it thus is strongly in my interests to ponder the viability of and act to strengthen said viability as best I can. Personally I wish we could all, as much as possible, work together to grow our overall market… it’s such a tiny tiny slice of the beer pie as it is. But perhaps that’s just foolish… if there isn’t enough pie someone’s gotta starve.

I’ve made plenty of mistakes of my own in the last 9 months. Too many to list. A major one is not saying “no” often enough – so simple, but so hard. In 2015 I hope to find focus…

I may have simply got into a bung market! C’est la vie.