MICROBREWING GUIDE

Prepared by David Smith

The Innovation Partnership Ltd

118 High Street

Manchester, M4 1HQ

Tel: 0161 834 4401

Fax: 0161 834 4402

Email: tipl@innopartners.com

With thanks to

– Laurence Washington, The Purple Moose Brewery, Gwynedd

– Len Davis, Gwaun Valley Brewery, Pembrokeshire

– Tom Newman, The Celt Experience, Pontypridd, Mid Glamorgan

– Cameron Pearce, Snowdonia Park (brewpub), Gwynedd

– Brian Dooley, Preseli Brewery, Pembrokeshire

– Glen Ellis, Rotters Brewery, Powys

– Peredur Williams, Gwynedd

– Buster Grant, Breconshire Brewery, Brecon

– Dave Porter, PBC (Installations) Ltd

– Buster Grant, Chair of the Association of Welsh Independent Brewers

– Rhys Owen, Head of Conservation and Agriculture, Snowdonia National Park

– Geraint Hughes, Madryn Consultancy, Pwheli

– Adam McDonnell, Agri-Food Regional Manager for North Wales

Prepared for Gwynedd Rural Development Plan - Innovate

Gwynedd County Council

Council Offices

Shirehall Street

Caernarfon

Gwynedd, LL55 1SH

Tel: 01286 679628

Fax: 01286 678962

Copies of this booklet can be downloaded from the following web addresses:

Gwynedd Economic Partnership www.economigwynedd.info, www.gwyneddeconomy.info

Snowdonia National Park www.eryri-npa.gov.uk

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CONTENTS

1 INTRODUCTION 3

2 THE BREWING PROCESS 5

2.1 The Ingredients 5

2.2 The Process 6

3 SITE, PREMISES AND PLANT 9

3.1 Site and Layout 9

3.2 Waste Products 10

3.3 Planning 12

3.4 Basic Plant 12

3.5 Costs 15

4 ROUTE-TO-MARKET 17

5 FIRST HAND EXPERIENCE 19

6 MINI CASE STUDIES 24

7 USEFUL CONTACTS 27

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1 INTRODUCTION

This microbrewing guide is aimed at Gwynedd farmers. It has been written by The

Innovation Partnership Ltd following a Strategic Innovation Study commissioned by

Gwynedd Council. A Strategic Innovation Study (SIS) is intended to identify and

facilitate the creation of sustainable ventures that will deliver significant wealth

and create jobs within the Gwynedd rural community to benefit farmers and have

a positive impact in the wider Gwynedd economy.

The guide contains practical, up-to-date information about the microbrewing

process including ingredients, site considerations, plant layout, equipment

requirements and costs, regulations including planning, and marketing and

promotion. It is informed by interviews with several successful Welsh microbrewers,

Unlike the rest of the brewing sector, microbrewing is experiencing strong growth

averaging more than 10% since 2004. This growth is being driven by the

Progressive beer Duty (PBD), which reduces the duty paid by smaller brewers by as

much as 50%, and the growing consumer trend of buying and sourcing food and

drink locally, attracted by distinctiveness and keen to discourage ‘food miles’.

These drivers, together with low technical and commercial barriers to entry, have

fuelled the growth in the number of microbrewers in recent years.

Beers from Wales are beginning to gain prominence. CAMRA has held the

Champion Beer of Wales competition since 1996 and winning brewers are proud

to use the wining accolade in their promotional material. The Wales – True Taste

Producers Food and Drink Awards have also helped raise the profile of brewers

from the Principality. Many of the Welsh brewers use a ‘made in Wales’ on their

products, typically a dragon or flag. The Association of Welsh Independent

Brewers (AWIB) is considering the development of a logo.

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North Wales, once regarded as the backwater of beer brewing, has been making

something of a name for itself in recent years. When the Purple Moose Brewery set

up in 2005 there were only two other breweries in North Wales. Since then there

has been a whole bevy of beer makers who have endeavoured to put North

Wales on the beer map. Despite overall sales of beer in the UK going down, these

microbreweries have been bucking the trend with success stories on the Lleyn

Peninsula, in Conwy, Denbigh and Flint. These microbreweries typically employ a

handful of people and supply very distinctive tasting beers to pubs and shops in

their locality. Many of these breweries are willing to give guided tours of their sites

and are keen to share their enthusiasm for brewing.

CAMRA, commenting on the growth in small breweries in Wales, states: They’re

really coming up with some wonderful beers and people are a bit fed up with

bland, global brands that taste the same.”

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2 THE BREWING PROCESS

Brewing the perfect beer requires the brewer to use art, craft and science, in a

balance of natural ingredients and processes. Some brewers embrace modern

technology while others use more traditional means but whether the brewery is

large or small, old or new the process remains the same.

2.1 INGREDIENTS

Most alcoholic beverages have three components: a liquid medium; sugar, which

is digested by yeast to create the waste products of alcohol and carbon dioxide;

and aromatic or flavour components. With wine, everything comes in a nice little

package...the grape. With beer, however, things are more complicated. Cereal

grains are hard to ferment. In their natural state, grains contain almost none of

the required components: no liquid, no sugar and not much in the way of flavour.

All three have to be brought together before you can add the yeast.

Malt – malt is usually made from barley but brewers also use other grains, both

malted and unmalted. Wheat is a common grain used for this purpose, but oats,

rye and even rice are also added for particular purposes.

Liquor – brewers refer to the hot water into which the processed malt is ‘mashed’

as liquor. Water in a brewery is for washing and cooling.

Hops –hops contain acids that kill bacteria and protect the beer from infection.

They also contribute to flavour and aroma.

Yeast – every brewery has its own strain of yeast not least to help produce a

distinctive flavour. Yeast is a microscopic fungus that digests the maltose (sugar)

and excretes alcohol and the CO2 that puts the fizz in beer.

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Other Ingredients – more and more ingredients are being used in the brewing

process to create new flavours with fruit particularly prevalent.

2.2 THE PROCESS

The malted barley is lightly crushed into a coarse powder called grist. At this

stage, other cereals - including flaked maize, unmalted barley and wheat can be

introduced, if required by the brewer’s recipe to produce particular characteristics

of flavour or colour or appearance. Darker malts are used for stouts.

The grist is transferred to a large vessel called a mash tun, where it is mashed with

hot water (similar to the process of making a cup of tea). The natural sugars in the

malt dissolve in the liquor, and eventually a sweet brown liquid is run off. The wort

as it is called is then boiled with hops in large vessels, known as coppers.

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The next stage is fermentation, the most critical process of all. The hopped wort is

cooled and run into fermentation vessels. Yeast is added, and it begins to convert

the natural sugars into alcohol, carbon dioxide and a range of subtle flavours.

Historically, all British ales and stouts were fermented with yeast that rose to the top

of the beer, and in many cases this method is still used. These top fermenting

beers develop cloud like, foaming heads. When the yeast has done its job, the

head settles into a thick, creamy crust, protecting the beer from air.

Lagers are fermented with a different type of yeast which works at colder

temperatures, and which sinks to the bottom of the fermenting vessel. Known as

bottom fermentation, to ensure hygienic conditions, enclosed fermenters are used

with a conical base, in which the yeast settles into the base.

Finally, before a beer leaves the brewery it must be conditioned. The conditioning

process differs according to how the beer is to leave the brewery. For cask-

conditioned beers (real ales), the beer goes directly into the cask, barrel or bottle.

More hops may be added to the cask (dry hopping) for extra aroma. Finings are

added which bind the materials responsible for haze and sink to the bottom,

clarifying the beer. The yeast in the beer is still active, and the beer will undergo a

second fermentation in the cask, normally in the cellar of a pub. Cask conditioned

beer is a delicate product and, just like the beer undergoing fermentation in the

brewery, it is vulnerable to attack from all kinds of contamination by wild yeasts

and other micro-biological organisms.

Other beers are brought to condition in the brewery, some are fined and filtered

and some are pasteurised to guard against deterioration from microbes. They

reach the consumer in casks, kegs, bottles or cans. For lagers there is a longer

period of conditioning in the brewery at low temperature. The word lager comes

from the German word ‘lagern’, which means to store at a cold temperature.

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3 SITE, PREMISES AND PLANT

3.1 SITE AND LAYOUT

Breweries can be put almost anywhere although the cost of some sites prohibits

successful installations. An industrial unit, attached to a pub, a farm building,

attached to another development or at your own home are the most common

locations. To acquire an appreciation of brewery layout and designs, it is

advisable to visit several microbrewers; most are willing to give a tour.

The beautiful ideal of old watermills, country house, churches and historic building

have the attraction of the USP, but trade effluent, building costs and planning

problems will probably make these sites unavailable unless you own them in the

first place.

An easy to operate, commercially viable brewery should possess:

– sufficient, height and access, including transport for visitors and employees;

– the flexibility to build internally and alter as required;

– the space to expand;

– adequate electricity and water;

– potable water – poor pressure is disadvantage but can be overcome;

– strong floors;

– mains drainage and drainable floors;

– permissions in relation to planning, trade effluent, EHO and HM Revenue &

Customs;

– access to atmosphere for steam and CO2 that will not raise any objections.

The two key factors that affect internal brewery layout are:

• exit hole for the chimney to take steam;

• flow of liquid along the brewing process

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It is strongly advisable that a separate fermenting room is made available. The

advantages are:

– the micro climate is easier to control when atmospheric temperatures are

extreme;

– easier to control pests;

– there is not through flow of air, thus limiting the chance of airborne infection;

– a minimal sum spent on preparing the walls and keeping them clean;

Area requirements for a brewery will depend upon several variables, such as the

position of windows and doors, as well as roof height and drainage. Having

outside secure or off-site storage also helps to reduce the area requirements.

Brewery Size Barrels Area feet² Min-Max Total Electricity Required

2.5 250-500 20kw 240v

4 400-700 20kw 240v

6 700-1000 28kw 415v

8 800-1100 37kw 415v

10 1000-2000 40kw 415v

If there is an intention to bottle real ale then an additional 200-300 feet² will be

needed.

3.2 WASTE PRODUCTS

Trade effluent falls into four main categories:

1. residual sediment from the fermenting operation;

2. chemical used in cleansing and sterilising;

3. the first washings from returned beds;

4. accidental or deliberate disposals of finished beer

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Mains drainage is strongly recommended. It is easier to apply for permission to

dispose of all trade effluent down the mains. Full permission can take several

months. The water supplier is the usual source of permission to dispose, of course

they will charge you extra for the privilege, and therefore will want you as a

customer. The only real problem you will encounter with trade effluent is if the

local wastewater treatment works is too small to handle the output – most

microbreweries will not trouble a wastewater treatment works. Alternatively

permission may be granted with conditions. Not having mains drainage can incur

additional costs and problems:

• expense to carry it away in bulk;

• expense of setting up settling tanks;

• reed beds

Septic tanks are not suitable as demand varies too much. Fines for illegal

discharge of trade affluent can run to tens of thousands of pounds.

There are small volumes of other effluent but the volumes and concentrations are

usually very low. As for the remaining volume discharge from a brewery, these are

largely washing and rinsing water and about 50% of the volume disposed could be

described as drinkable.

Minimising discharge will depend upon the restrictions imposed upon you by your

effluent officer. With the exception of the cleaning chemicals, although the barrel

washing procedure can be completed with steam, almost all of the effluent from

a brewery is derived from organic sources, for example:

– the sediment from the fermenter, which causes a lot of problems at the

treatment works, can be collected as a lump and ‘ploughed’ into the land;

– used malt (spent grain) can be given to a farmer, ideally as feed for livestock

such as cattle and horses – the maximum amount should not exceed 30% of

the diet;

– spent hops form the bottom for the copper make great compost when

biodegraded

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The very small amount of toxic waste can be soured separately and removed off

site (paid service). One (or two) settling tanks can be set in the drain to catch the

solids and be emptied a couple of times a year.

In practice the total amount of trade effluent disposed of will probably be lower

than a few large houses. One problem is that of irregular volumes of disposal.

Granting trade effluent consent will usually require a ‘sampling point’ for access to

take readings.

3.3 PLANNING

Breweries require B2 planning permission. If a brewery is not already attached to

your chosen building, it can be easy and cost very little, or it can take years and

cost thousands of pounds. An assessment of the attitude to planning in the early

stage of a business proposal could lead to an early abandonment of a proposed

site without incurring excessive expense. Brewpubs have different criteria for

planning than other buildings, and building that have special status or in special

areas may be treated differently.

3.4 BASIC PLANT

Hot Liquor Tank

The Hot Liquor Tank (HLT) is the storage vessel for the hot water needed in the

brewery. The hot liquor recovered from the chilling operation should be very hot,

and if the HLT is properly insulated much of the energy can be held for the next

brew. About 200 litres of liquor are required for every barrel brewed. Therefore a

5-barrel brewery will need a minimum of 1000 litres capacity. There will be some

way of maintaining the temperature in the HLT, and 3 to 6ke of energy input should

be sufficient for most microbreweries. If there is a desire to brew twice in a day

then the HLT should be installed oversize to facilitate this requirement.

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Mash Tun

Almost all UK based microbrewers use an infusion mash system. This is a simple

vessel where the malt mixed with the liquor and left to stand at ‘one’ temperature.

It is then fun off to the boiling vessel through an ‘underback’.

Copper

The boil is one of the simplest operations and enough energy has to be put into the

vessel to complete the effective and efficient boil. The energy sources can be

supplied via electrical elements, direct fired gas tube, gas produced steam, direct

fired gas or in rate occasions by gas oil or kerosene. The boiler operation is more

efficient if the heat source is to one side of the vessel so the rolling boil is more

efficient.

Control of the energy input will save time and provide efficient energy utilisation. If

a copper is over powered it will be boiling before the transfer from the mash tun is

complete. If it is under-powered then there will be unacceptable time delay from

the end of the separate (transfer) to boil time. The ideal balanced operation will

have around 10 minutes from the end of the transfer to boiling. It is also important

to be able to isolate the chimney from the copper until the boil is reached, as

letting heat out prior to boiling is an unnecessary waste of energy and will add to

time the brewing day. Less energy will be required to maintain a good rolling boil

than to achieve the boil in the first place.

Heat Exchanger

An effective heat exchanger is required to rapidly cool the very hot worth, to a

temperature that is safe and desirable to pitch the yeast. A by-product of the

effective cooling of the beer is the recovery of hot liquor that can be stored hot

and used for later brews.

The multiple plate heat exchanger (PHE) is the favoured equipment for the chilling

operation. There are other devices for cooling that achieve the chilling of the

beer but not as efficiently. PHEs work by passing beer down thin stainless steel

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sheets when on the other side of the sheet is the cooling liquid, which is usually

water (for the micro brewer). The PHE should be specified to do the job required

for the size of brewery. If this specification is sufficient then the PHE should give no

trouble provided it is used correctly and cleaned properly.

The PHE is the biggest single point for potential problems and must be cleaned

properly before EVERY brew. Cleaning does not necessarily require splitting of the

equipment, but chemical cleansing and sterilising is essential.

A PHE will require splitting from time to time, how often will depend upon your

assessment based on the results of previous splitting and cleaning. At worst hop

debris will impede its effective use and will need splitting every brew, at best it will

never need splitting. The frequency of splitting operation is reduced significantly is

a pre filter is fitted.

Fermenting Vessels

A primary fermenting vessel can be made of many materials, plastic. Stainless

steel and slate are common materials. The main criteria for the material are that it

is food grade and fully sterilized. They can be of many shapes and sizes, open

topped or entirely closed. The shape and materials of fermenting vessels will

largely depend upon the brewer’s experience. All beer will need cooling or

heating depending upon the requirements and the ambient temperatures. It is

important that the temperature in the fermenter can be controlled otherwise beer

will be lost.

Conditioning Tanks – Further Storage

Conditioning tanks can be used to hold beer for longer periods. They must be

enclosed and capable of withholding pressure. Beer can be stored in tanks for

several reasons:

– it is cheaper than holding the beer in casks;

– to lower yeast counts;

– to put condition in the beer;

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– To stabilise the CO2 content;

– for holding prior to bottling;

– for delivery to another processing operation;

– to store form the primary fermentation sediment;

– to hold en-mass to prime for bottling;

Beer will be pumped or fed by gravity to conditioning tanks. They will be filled from

the bottom and the exclusion of oxygen is essential. A blanket of CO2 may also

be needed for flooding prior to filling or to maintain the condition of the beer.

CO2 may also need to be fed into the top to keep the open space in a sterile and

controlled environment.

Cold Liquor Tank

This vessel will only be needed if:

– the water pressure is poor;

– the source is small, for example, a spring;

– very cold liquor is needed (brewing lager);

– very warm climate

3.5 COSTS

List prices for standard brewery kit from one of the leading suppliers PBC

(Installations) range from just over £3,000 for 1-barrel kits – 1 ‘bulk’ barrel is 36

gallons/288 pints/163.6 litres – to more than £77,000 for 40-barrel kits. Prices for

other kits are:

– 2-barrel - £9,900

– 4-barrel - £14,000

– 8-barrel - £20,700

– 12-barrel - £28,200

– 20-barrel - £61,100

Casks represent a significant investment. The most common cask is a 9-gallon firkin

and 30 firkins are required for every bulk-barrel, therefore, an 8-barrel brewery will

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require 240 firkins, which at £80-85 each (new) represents an investment of circa

£20,000k.

Bottling is time consuming and unless done carefully prone to infection and

oxidisation. Starter-level bottling plant is very cheap (£600). Labelling can also be

done by hand or by machine (£1,8000).

According to PBC, a general guideline is that the setting up cost for a total

brewery installation is 2 to 2.5 times the kit prices making investment in a 1-barrel

brewery less than £10,000.

The cost to produce a 4% ABV ale including ingredients duty and utilities is

approximately £110 a bulk barrel or £27.50 per firkin.

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4 ROUTE-TO-MARKET

The two routes-to-market for microbrewers are draught sales (cask ale) and

bottles. It is important to keep in mind that these routes-to-market are not mutually

exclusive.

4.1 DRAUGHT

There are several options for getting cask ale to market:

– Local free trade – free trade landlords and owner-operators who are keen to

offer a range of local beers

– Brewing tied estates – pubs operated by larger (regional) brewers restrict the

beers they sell to their own but there are a good many microbrewers operating

pubs that do stock guest ales

– Non-brewing pub chains – these range from large chains such as JD

Wetherspoon, which has always been a keen supporter of local ales, to small

chains similary open to beer from small brewers

– Leased and tenanted pubcos (pub companies) – pubcos are also tied but do

allow their licensees some freedom to stock local beers

In addition to these channels there are niche opportunities such as clubs and

outside bars (bars at private and public events).

Another route to market is via wholesalers. Specialist wholesalers operate in

England and Wales including Gwynedd (Joseph Keegan & Sons,

www.josephkeegan.co.uk), many of them members of National Drink Distributors

(NDD), a consortium of independent licensed trade distributors

(www.nationaldrinks.com). Dealing with a wholesales requires regular supply and

this can be demanding for a young microbrewer.

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4.2 BOTTLED

Commentators agree that this route-to-market continues to grow in importance. It

offers a number of advanatges over cask ale, in particualr extending shelf life and

opening up new routes-to-market. Bottles also make it easy to provide samples for

prospective buyers.

Though dominated by the major supermarket chains, current and emerging

avenues being exploited by microbrewers include:

– Farm shops (farmers’ own and neighbouring) and farmers markets

– Local shops including specialist outlets

– Hotels and restaurants

– Mail order and internet sales

The majority of beer produced by Welsh independent brewers is in the form of

draught real ale and for Welsh brewers to prosper they need to be able to sell their

products through pubs close to where they brew. CAMRA has been successful in

encouraging pubs to stock such locally produced real ales through a LocAle

publicity scheme provided free of charge to participating pubs. However, many

potential outlets for Welsh brewers/beers are blocked because of beer-tie

arrangements. CAMRA believes that 70% of pubs in the UK are subject to a ‘beer

tie’ that restricts the range of beer a pub is able to sell. Small Welsh brewers

therefore only have access to approximately 30% of the market. CAMRA believes

that to promote the development of the Welsh brewing sector a reform of the

beer tie to open up the market to smaller brewers, campaigning in particular for

the introduction of a guest beer right, where all pubs are able to offer one guest

beer/ale.

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5 FIRST HAND EXPERIENCE

The Innovation Partnership interviewed a number of Welsh microbrewers to

capture first hand experiences of setting up and running microbreweries.

Starting Out

When asked about the motivation behind their ventures most talked about a love

of real ale but emphasised that they were starting a business, which had to

generate income, and prosper over time. People’s route into microbrewing varied

considerably. At the smaller end of the scale was Rotters Brewery, which took an

opportunity to increase income from its hotel/restaurant/pub, and Len Davies,

Gwaun Valley, who had been brewing for two years in an old milking shed to

supplement farm and campsite income and has now developed the parlour into

a brewpub for campsite visitors and locals. On a larger scale are the likes of highly

successful, award-winning microbreweries Purple Moose and The Celt Experience,

established by entrepreneurial individuals with a passion for excellence and good

business acumen. In the middle of these extremes was an engineer (Brian Dooley,

Preseli) who had run his own business for 40 years and wanted to indulge his

passion for real ale, and now sells successfully to local outlets.

Microbreweries are not regarded as get-rich-quick schemes but if sensibly

planned, and professional advice and support sought, particularly in brewing and

marketing, they can produce reasonable returns. Clearly there is healthy

competition amongst regional brewers, particularly at festivals and competitions,

but there appears to be camaraderie with people willing to work together for the

future of their industry.

Training and Support

In relation to key success factors there was a mixed response, views ranging from

quality of ingredients, particularly barleys and hops recipes, to quality of brewing

equipment and conditions. However, all agreed that initial training and

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understanding of the brewing process and microbiology was critical. Whist there

was an element of trial and error (‘black art’), all of those interviewed believed

that within no more than five brews a saleable product was achieved. Brewers

sourcing equipment, either new or second hand, from a brewery equipment

supplier, felt that the support they received was excellent and very good value-

for-money. For example, many have been on supplier training courses lasting 2-4

days and costing £1,500-£2,500. Customers of PBC (Installations) received ongoing

support, notionally free of charge, which is considered invaluable. More scientific

training can obtained from colleges and universities from circa £4,000. The likes of

Purple Moose and The Celt Experience do, from time to time, see specialist input,

Purple Moose recruiting brewing consultants and The Celt Experience, arguably

the most professionally managed microbrewery in Wales, seeking to develop

relations with research establishments and key industry stakeholders.

Market Research

In looking to establish microbrewing ventures most interviewees undertook some

form of proprietary research. The Purple Moose Brewery wrote to all the

independent pubs in the region asking them to complete a simple questionnaire

and received a very high response rate of more than 20% with all respondents

expressing an interest in a local brew. According to Laurence Washington they

received over 20% response rate (very good indeed), and all of those that

responded said that they were interested in a local brew. Others considered

bottled ale as well as keg and contacted local retailers as well as pubs, restaurants

and hotels. All commented that the research provided an indication that, given

the right price, there was a market, and this gave them the confidence to pursue

their plans.

Investment

Many spoken to by the Consultancy benefitted from Welsh (Assembly)

Government and local authority grants to support entrepreneurship and new

business starts, covering aspects such as building and equipment and business

planning. Grants ranged in size from approximately £5,000 to several tens of

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thousands of pounds. Total investment by interviewed microbrewers in the

ventures so far ranges from below £10,000 for a brewpub (excluding aluminium

casks) to well over £80,000 for a larger independent brewing house. The costs of

setting up in business as a microbrewer are covered in the accompanying

Microbrewing Guide.

According to Buster Grant of the AWIB, a number of microbrewers have benefited

from government grants to refurbish property, establish microbrewing businesses

and undertake initial marketing and business development. However, grants are

now often being translated into repayable loans and are also in a state of flux due

to changing government and investment priorities. That said Gwynedd Council is

close to launching grants under the Local Products Supply Chain & Market

Development Fund. This provides a maximum grant of £20k (guideline) at 80% of

total eligible project costs, i.e. total project cost £25k. The match funding, i.e. 20%

(£5k) needs to be in cash. It is advisable to keep informed about available funding

through websites, local authorities and the Welsh Government.

Sites

In terms of sites visited by The Innovation Partnership, these include a purpose-built

factory, farm outbuildings, brewpubs and short-term accommodation on a trading

estate, which has the benefits of ready access to utilities (power, water) and

straightforward planning. The Innovation Partnership’s wider research has shown

an increasing trend for the purchase and renovation of redundant pubs to include

a microbrewery. This has many advantages in terms of planning and retail, which

can combine quality ale with good food.

Research also shows that some brewers have converted listed farm buildings or

buildings in National Parks, which though attractive can introduce significant time

and costs to set up. That said, it may be possible to negotiate favourable terms,

one case in point being the Brock Hampton Estate in Herefordshire where a

National Trust farm building was turned into a microbrewery (email

buildingdesignguide@nationaltrust.org.uk, telephone 01793 817791).

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In general the only watchwords expressed by interviews were ensuring that there is

sufficient power, acquiring a water extraction license and informing the local

authority of the intended use. The Microbrewing Guide addresses these and other

requirements when seeking to establish a brewing venture.

Marketing and Sales

Marketing and sales are the two activities that interviewees feared most and

found most challenging. This is principally because they had no prior marketing

and sales experience, although most agreed that after a period of a year or two

they had become more familiar and comfortable with marketing and sales had

started to reach reasonable levels.

Marketing principally revolved around promotion of the brewery/brand to raise

awareness. Most of the brewers found it enjoyable to think up the names of

various brews. These were based on things such as locality, maritime themes as

well as ‘spur of the moment’ ideas. Some have used the services of local design

consultants to create logos and labels, and found this to be value-for-money,

paying only a few hundred ponds. Others have worked on logos themselves,

often with the help of family and friends. A number of the breweries created a

common label, which could be printed in different colours for different brews.

There is a range of promotional tools and techniques to consider, successful

approaches tending to make use of more than one approach to ensure that

customers and consumers are reached on a number of ocasions in different

places. Tool and technques include:

– sales promotions;

– point-of-purchase – this is also relevant for draught sales, i.e. the pump clip

– press/public relations – published articles with both consumer and trade press

can helpt to raise awareness;

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– advertising (off- and online) – magazine advertising can be expensive as it

needs to be maintained over a period of time whereas online advertising can

be a more cost-effective approach;

– website – can be used to conduct sales as well as helping to promote the

brewery

– social networking (Facebook, Twitter, etc.);

Some brewers have made use of use of some of the newer forms of

communication such as social networking as well as more traditional methods to

appeal direclty to the consumer, for example, beer fesitvals.

The main marketing and sales-related cost is a sales person. Most of the small

microbrewers undertake this activity themselves but realise that when volumes

allow a good sales person would be a worthwhile investment. Owner/manager

sales activity typically encompasses knocking on doors (local pubs, hotels,

restaurants and retailers), and attending local food and drink festivals and food

marketing events, while some progress to mail order sales. The majority of

interviewees acknowledge that marketing and sales is a time consuming but vital

activity.

Even though many brewers had concerns about marketing, there are many

examples of novel approaches. For example, one brewery that supplies the local

J D Wetherspoons pub organises minibus trips for clients of Wetherspoons to visit

the brewery. In another example, two breweries work together under a ‘fill back’

scheme. Here one brewery sells beer to a brewery in another location to be sold

in that area. The barrels are then refilled by that brewery and then sent back for

sale locally by the original brewery. In this way there is an equal exchange of

worth, reduced distribution costs, and an increase in choice for the consumer.

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6 MINI CASE STUDIES

The Celt Experience

The Celt Experience Brewery formed 7 years ago is arguably the most successful

microbrewery in Wales run by Tom Newman and his wife. The company employs

10 staff and has a turnover of £800k. Tom emphasised that his is a professional

business based on a good understanding of science (microbiology), quality

equipment and ingredients, brewing skills and marketing & sales. In an effort to

grow the business Tom is actively pursuing overseas as well as domestic

opportunities. According to Tom the real challenge is to persuade drinkers of

household beer brands to switch to real ale – only 2% of the Welsh population

(2.5m) currently drink real ale. Lager is an opportunity being looked at but this is a

more expensive product to produce due to the 12-week cycle compared to the

2-week cycle for real ale.

The brewery is also investing in development of the supply side, growing a small

quantity of hops within Wales and also sourcing malting barley from

Pembrokeshire, which needs to be blended with malting barley from England to

achieve the required quality. Tom believes that 100% Welsh ingredients is very

much a long-term aspiration for the industry.

Purple Moose Brewery

Set up by Lawrence Washington who originally visited the Porthmadog area to

assist in railway restoration. Lawrence set up Purple Moose having undertaken his

own research into the local market for real ale supported by a government grant.

He purchased second-hand equipment costing in the region of £36k and received

support from D A Smith Brewing Services & Consultancy

(www.brewingservices.co.uk). When starting out there were only 3 microbrewers

across Wales and now there are more than 40, with 13 in North Wales. There were

and are no particular barriers to entry, technical or commercial, but according to

Lawrence it is a 24/7 commitment. The 10-barrel brewery has a turnover in excess

of £500k. Lawrence is comfortable marketing and promoting the business and he

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has targeted awards for good beers, which has generated a great deal of positive

PR. Sales of cask and bottled ale are mainly to independent pubs and restaurants

offering quality food and drink; an independent wine merchant also takes the

companies brews.

Lawrence expressed an interest in local crops and also malting – if crops were

grown locally and then sent to England food miles would be generated and there

may be issues with the security of the barley supplied. He estimated that a malting

facility capable of malting 20 tonnes would cost in the region of £1m.

Gwaun Valley Brewery

Len Davis and his family run a small microbrewery at their farm. The venture, which

was set up 2 years ago, benefited from a government grant of £24k for building

and equipment, total investment running to £80k. Turnover is already running at

£500k. Development included an ‘attraction centre’ designed to host visitors who

can sample the beer for free and then purchase the product. Visitors include

residents of the farm’s adjacent campsite, locals and also various groups such as

the Morgan (Cars) Owners Club. Sales of cask ales are made to local pubs,

including the local JD Wetherspoons, as well as restaurants and hotels. Len has

experimented with malting barley and hops, current growing although not using

the latter, but climate makes it challenging. However, he remains keen to keep

trying. He is also open to collaboration with other microbrewers, in the area of

micromalting, for example, stating that a Welsh micromalting cooperative would

make sense.

Rotters Brewery

Father and son Pip and Glen Ellis moved into the pub and hotel trade 6 years ago

and then 12 months ago took the decision to invest circa £20k to create their own

microbrewery within the existing hotel complex they had developed. Current

production is focused on cask ale, the brewery supplying independently owned

pubs in addition to their own hotel/pub. Production is kept below specified limits in

order to attract the 50% reduction in duty. Bottled ale is being considered, which

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would open up new routes-to-market including mail order. Pip and Glen are also

looking at a potential new retail outlet, a refurbished mill in the centre of Talgarth

where there is also an opportunity to site a microbrewery in the visitor attraction

centre. They attend CAMRA events and beer festivals, and are looking to get into

the Good Beer Guide. They are interested in the local sourcing of ingredients and

believe that microbreweries can learn from each other.

Preseli Brewery

Brian Dooley set up Preseli Brewery after 40 years working as an electrical

contractor. The brewery is based on a small industrial estate providing ready

access to utilities and straightforward planning. Brian purchased equipment from

PBC (Installations) and also received training from the company. Investment so far

has totalled £25k, £5k of which has been spent on equipment. Brian estimates that

the payback period for his investment will be 5 years. The brewery supplies both

cask and bottled ale, and has also now added lower cost ‘bag-in-box’ packaging

for the home party market. Brian works with food cooperative Pembrokeshire

Produce Direct, the PPD quality mark helping his brand to stand out. A website is

currently under construction.

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7 USEFUL CONTACTS

Association of Welsh Independent Breweries

www.awib.org.uk

Campaign for Real Ale (CAMRA)

01727 867201

www.camra.org.uk

PBC (Brewery Installations) Ltd

07976 845705

www.pbcbreweryinstallations.com