Interview: Steven Smith-Hay, co-founder of Edinburgh sour beer maker Vault City Brewing

New chapter for creative craft brewer with move to new facility amid bid to become the biggest player in its field globally.

Steven Smith-Hay was working in IT when he found himself dabbling in homebrewing, before in 2018 co-founding Vault City Brewing, which specialises in heavily fruited, modern sour beers in bold flavours including Strawberry Banana Milkshake and Iron Brew.

Turnover is now more than £5 million, with export up by nearly two-thirds, the business has two bars in Edinburgh and is stocked in more than 250 across the UK, while it has also secured listings in the “big four” supermarkets with Asda soon to be the latest to join Tesco, Morrisons, and Sainsbury’s.

And it has now just moved into a new home seven times the size of its Portobello brewery, bankrolled by £330,000 raised via a crowdfunder. The new site at BioCampus, Scotland's first dedicated national bio-manufacturing campus located within the Midlothian Science Zone in Edinburgh, consolidates a brewery, lab, plus external storage and fulfilment spaces, and is set to host a barrel store. It means the firm will be able to produce more than 10 million litres of beer a year, with Smith-Hay branding it Vault City’s “forever home”, adding: “Our ambition is to be the biggest dedicated sour beer producer in the world.”

'We want to rip up the rulebook and try different things; I’m still a homebrewer at heart,' says the entrepreneur. Picture: Gavin Hill.

You say Vault City has “come a long way from our humble beginnings in the kitchen” to now being behind more than a third of sour beers consumed in the UK. How would you characterise your progress to date?

Key chapters so far have been starting out as hobbyists in our kitchen to contract brewing in Dundee followed by the Portobello move. Moving to our new brewery is going to take us to the next level. Luck has played a part in our success, but our growth has been because we follow our curiosity. We want to rip up the rulebook and try different things; I’m still a homebrewer at heart.

The timing has been important. Fruit and beer has been explored historically, but it’s only just becoming mainstream – there were very few offerings in supermarket shelves a few years ago, but it’s now the fastest-growing segment in beer.

While there were lots of amazing brewers out there, we went all in and doubled down to meet the moment. BrewDog saw something was coming, and invested in their own dedicated sour beer facility, but later admitted they misread the market. We were perfectly primed to offer an alternative, and to help build that demand organically.

Some of the firm's product range (including Cloudy Lemonade) in its new premises pre fit-out. Picture: Gavin Hill.

You say you like to defy the “you can’t do that” mentality when coming up with flavours. How do you come up with ideas, and how quickly do you decide if they have commercial appeal?

A lot of our ideas come from members of the team, and many of our most successful beers are inspired by flavours people are familiar with, like Iron Brew, which has been one of our most successful releases, or our recent sweet shop series, which tapped into nostalgia. However, if you try to make a beer that tastes like something from someone’s childhood, you have to hit the nail on the head. We can do that because of our experience – we’ve made 300 flavours of beers to date.

That experience is also why we’re able to have a gut feeling on what will work and what won’t. We’ve found that while people may baulk at the idea of sour beer, they’ll try a drink that’s branded more accessible, like strawberry laces flavour. If something is a surefire hit we brew a couple of times, if not we’ll dial back the size of the batch. We’ll make beer for the mainstream, but also for the beer nerds.

You’ve launched 0.5 per cent ABV beers – to what extent will these be a growth driver going forward?

While we will continue to look for ways to appeal to conscious drinkers, and explore low- and no-alcohol beers, like our 3.4 per cent Peach Iced Tea, it’s not our focus. The growth in the segment seems to be from macro players like Heineken and Guinness – I don’t think craft is growing at the same rate.

Vault City announced in 2022 that it was moving permanently to a four-day working week. Can you give an update on the impact of this on staff and day-to-day operations?

It was the best decision we ever made. Employee morale is at an all-time high, and it’s allowed us to attract and retain the very best staff, we always have a huge amount of qualified candidates for any role.

The business has grown internationally, present in France, Denmark, Sweden, Norway, Singapore and Thailand, for example, are there other key export markets you are targeting?

We see North America as a huge growth area. Elsewhere, we’ve signed a major deal with Vinmonopolet in Norway, taking us into 250 stores, while we’re one of only eight UK breweries invited to China’s biggest craft beer festival. The interest at a recent showcase event by Scotland Food and Drink gave us a lot of confidence to grow in some markets we hadn’t previously considered.

What has been the firm’s biggest challenge?

We wouldn’t want to do it any other way, but remaining 100 per cent independent has made it tough. However, it does mean we can make the decisions we want to, and do things for the right reasons. We’ve learned to make every pound work as hard as it can. It keeps us hungry!

What would be your dream location to drink a Vault City beer? And which flavour would you go for?

I was reading American Sour Beers: Innovative Techniques for Mixed Fermenations by Michael Tonsmeire on a beach in Thailand while on holiday in 2016 when I came up with the idea for Vault City. Going back there and enjoying a Cloudy Lemonade would be a real full circle moment.