Craft beer has tasted success that is likely to continue, writes Ashleigh Bruce
In a time of great economic uncertainty in Scotland, the UK, Europe and beyond, it seems that one thing we can count on is that there is still a thirst for people making and drinking craft beer. The popularity of craft brewing has gathered momentum in recent years and, for a number of reasons, shows no signs of slowing down.
Craft brewers are in a great position to create, and can hugely benefit from having, a compelling brand story. Any successful craft brewery should have a story to tell – whether it’s how the idea was born and brought to life, the skill that goes into making it, or the passionate people that are behind it .All are brilliant selling-points. Brand stories drive engagement with locals and tourists. A strong story can encourage loyalty. Such stories can also be used as the basis for brewery tours and interactive experiences, providing another revenue stream for businesses and allowing people to buy into the product further. Nowadays, more and more people are seeking authenticity in the products they buy and that’s something that craft breweries can offer on tap.
Last year, Scotland officially celebrated its “Year of Food and Drink” where we shone the spotlight on our diverse and delicious natural larder. It was during this time that The Brewers Association of Scotland (TBAS) was formed. Supported by the Scottish Government, TBAS is an industry body for the craft brewing sector which will give it a voice, promoting a coordinated focus on quality, market development, promotion and innovation, to ultimately increase export sales in the sector. The collaboration of resources facilitated by TBAS hopes to help the sector emulate the success of the whisky industry and realise its global potential, particularly in target markets such as China where there is a huge interest in premium Scottish products.
The industry has also received great support from supermarkets keen to keep up with the trend by offering their customers more variety and local choices. In particular, Asda is working with The Craft Beer Clan to ensure it stocks the best craft brews in Scotland and recently announced it would be adding 13 new Scottish offerings to its shelves. Aldi has also been a big supporter of the sector and stocks craft beers from 35 Scottish breweries, as well as being one of the sponsors of the inaugural Scottish Beer Awards due to take place later this year.
The emergence of crowdfunding has also played a part in the growth of the sector as it’s a model which lends itself well to the industry. BrewDog was the trailblazer for crowdfunding in the sector, having launched the “Equity for Punks” campaign on its own website back in 2009 before many of today’s most popular crowdfunding platforms even existed. To date it has raised around £20 million through its campaign The funds have helped the company to create a wide range of craft beers, open 42 bars across the world, hire over 500 employees and increase its 2014 revenues by 51 per cent to almost £45m in 2015.
Just last week, Edinburgh-based Innis and Gunn (also a founding member of TBAS), announced the first interest payments would be made to its investors following its £3m “Beer Bonds” issue last year. This was a twist on the traditional equity crowdfunding model and offered investors an interest rate return of 7.25 per cent on their investment or, if they opted for “Beer Bucks” to spend on the company’s products, an equivalent rate of 9 per cent. I expect that we’ll see more innovative variations of crowd funding in this sector in the future.
Although consumer trends may be on its side, the sector also has challenges to contend with. It is a crowded, fast-growing market, so companies must do what they can to stand out from the crowd. The companies which manage to meet these challenges, whilst staying true to their craft roots, are the ones which will ultimately taste success.
• Ashleigh Bruce is a corporate associate at HBJ Gateley and part of their food and drink team.