I enjoyed Sam McMeekin’s presentation on the importance of independence at this weeks Brewer’s Congress, organised by trade publication The Brewers Journal, and held at the Institute of Civil Engineers. Along with a few others—including Paul Jones at Cloudwater—The Gipsy Hill Brewing Co. founder has for a long time been vocal about the value of independence to the small scale brewing industry. It is a strong line, and one I largely agree with.
His presentation included the damning statistic that since 2015 the production volume of what you would ostensibly define as “craft beer” within London has gone from 100% independent to being just 27%. This is due to the sale, in full or in part, of Meantime, Camden Town, London Fields, Brixton, Beavertown, Fourpure, Fuller’s and Hop Stuff to Asahi, AB-InBev, Carlsberg, Heineken, Lion and Molson Coors, respectively.
It is the third time I have seen him present this data, and I have used these statistics at least once myself earlier this year, during a panel talk on the value of independence at SIBA’s annual Beer X conference. According to data from firms such as CGA, small, independent brewers makes up about 8% of the British Beer Market by sales volume. For some strange reason this doesn’t include the independent “family owned” regionals (it absolutely should though). If it did that figure would be somewhere closer to about 13 to 14%.
This still means that at least 86% of beer sold within the UK is produced by the multinationals. As such I am eager to see the next step in the discussion of independence, and some real progress in terms of presenting this argument to a greater number of industry members and bringing them together to form a unified front against increasingly tough competition and unfair access to established routes to market.
This is why I’ve decided to throw my support behind SIBA—the trade association that represents small, independent brewers in the UK. I respect that as an organisation it is not without its flaws—in particular its Beerflex sales arm, of which I have been a vocal critic of in the past. However, I believe under the leadership of new CEO James Calder, his team, and a strong board of directors featuring forward thinking individuals such as Wild Card Brewing’s Jaega Wise, SIBA could once again become an effective force for supporting the small, independent arm of the British brewing industry.
Let us not forget, without them successfully lobbying for small brewers duty relief in 2002, the majority of small brewers would be paying up to twice as much duty on their beer as they do now.
In his statement at the Brewers Congress, McMeekin made two suggestions: that SIBA and CAMRA should merge, and that SIBA should look to be more like the Brewers Association (BA), its equivalent trade association in the USA.
I struggled immensely with the first suggestion. SIBA is a trade association that supports the industry, while CAMRA is a consumer group that supports its customers. While they should work closely together, merging them would conflate the needs of two very different sets of people into a muddled, formless whole that I think would reduce the effectiveness and relevance of both parties.
His second suggestion is worth looking at, however. The BA has been incredibly successful in uniting America’s “small”, independent breweries. Most recently this has been through the use of an independence seal, which members can access freely and put on their branding. It has been widely adopted by the US industry, and features on the packaging of thousands of independent North American breweries. Despite some criticism, it is difficult to argue that its introduction has not been wildly successful.
Somehow people seem to forget that SIBA released its independence seal almost 12 months before the BA. I have seen it on the packaging of two breweries so far: Gipsy Hill and Manchester’s Beatnikz Republic.
The Brewers Association is massive. Of the USA’s 7500+ breweries, it counts 5142 of them as members. I have been attending its annual Craft Beer Conference every year since 2016. It is one of the most valuable experiences I get as a member of a beer industry. There are amazing seminars, and the networking is invaluable. I have been saving to attend next years conference in San Antonio, Texas, since it was announced earlier this year. If you are a UK brewery with the time and resources, attending should be considered essential.
There is somewhere between 2200 and 2500 breweries in the UK. No one really knows for sure because the available data isn’t good enough (this is one area SIBA can improve on to make membership a more attractive proposition.) Of that number, only 750 are members. That number is down from 800 the year before that, and 830 the year before that. This reduction is largely due to breweries going out of business, and to a lesser extent brewers unhappy with the association and cancelling their membership.
Having such a large membership puts the BA in a very strong position in terms of both reach and resources. This is how they are able to put on events attended by in excess of 13,000 industry professionals (SIBA’s Beer X equivalent currently attracts about 2000 people by way of comparison.) This is how they are able to successfully roll out initiatives like the independence seal. The BA is also not without its flaws, but it is difficult to argue against its effectiveness.
The BA is also very willing to adapt in order to keep both its membership (in particular its largest members, such as the Boston Beer Co.) happy and to keep its data set looking healthy. Ah yes, the craft brewer “definition” that we all seem to get excited about.
It’s crucial to realise what this definition is and why it exists. While it has been incredible in marketing the value of independence, and acts as the criteria for full BA membership (multinationals and other elements of the industry such as distributors can still join as associates) in the USA and beyond this definition is simply set of parameters designed for data capture. This data is in turn used as a marketing tool, one purpose of this is to recruit and retain members. It’s a shame SIBA doesn’t have the same kind of parameters.
Oh wait. It does. That “craft brewer” definition we’ve be whining about in the UK for the best part of a decade? It’s been under our noses this whole time. And when you break down the BA’s definition versus SIBA’s, well, things get rather interesting.
The BA updated its definition in 2018. Instead of standing for the values of “small, independent and traditional” it dropped the traditional. The BA defines “small” as producing less than 6 million barrels (7 million hl) annually, and “independent” as being less than 25% owned by “by a beverage alcohol industry member that is not itself a craft brewer.” It’s “traditional” parameter formerly outlined that a minimum of 50% of a breweries production volume must be beer. This was dropped and now it means the data set no longer includes any specific volume of beer, they just have to make “some.”
This meant that its data set—sorry, its really important, industry defining definition of “craft”—continued to allow the Boston Beer Co., makers of popular beverages such as Sam Adams Boston Lager, Truly Hard Seltzer and Angry Orchard Cider, to be included within that data. In turn this keeps the BA’s numbers looking sweet.
It’s also worth mentioning that, as it stands, this data set allows the inclusion of breweries like Brooklyn Brewery, which is 24.5% owned by Kirin, and BrewDog, which is 22% owned by venture capitalist group TSG Consumer Partners. It means that it can count some very big and powerful industry partners as members, and those membership fees and added resources all add up to make the BA the largest and most effective trade association in beer. (Again, it is not without its flaws, but in beer it is without comparison.)
Now lets look at SIBA’s definition of craft. Sorry, threshold for membership (as far as I’m aware this isn’t used for the production of data in the same way as the BA. If it did, the association would become significantly more relevant and effective, as far as I am concerned.)
You can become a full member of SIBA if you are producing less than 1% of total UK beer volume annually. It’s around 438,000 hectolitres. Quite a bit lower than 7 million. SIBA also doesn’t currently accept associate members, as existing members voted to against this to remove multinational presence from the association. As with the BA there is no rule excluding you if you decide to make other beverages such as cider or hard seltzer, or boozy fizzy water, as it will become known in the UK.
There is a complication here as at the 2018 SIBA AGM, members voted against a proposal to raise the threshold of membership from 200,000hl to 438,000hl but then the board of directors decided to force it through anyway, pissing lot of members off in the process. In real terms this change would have allowed just two extra breweries to join: St. Austell (including Bath Ales) and Fuller’s (including Dark Star.) However, St. Austell have refused to rejoin on principle, and Fuller’s sold to Asahi.
Despite this, I believe SIBA has a threshold that is a far truer representation of “small” than the BA. SIBA also states that the business must be 100% British owned. But what does this definition mean in real terms to its membership?
It means that the only large brewery not currently a member that could join if it wanted to is still St. Austell. BrewDog, being 22% owned by a group of bankers based in San Francisco (and potentially being over the 438,000hl threshold) could not. This gets even more interesting if you look at the BA members who do not fit SIBA’s definition and could not join.
Brooklyn Brewery, for starters, could not join due to their ownership structure. Sierra Nevada and Boston Beer both make over 1 million barrels of beer per year, so they’re out. Duvel-Moortgat are a member of the BA, that includes Firestone Walker, Boulevard and Ommegang—none of them could join SIBA. Nor could Oskar Blues, Cigar City or Three Weavers because they are technically one company owned by a PE firm called Fireman Capital based out of Boston, Massachusetts. New Belgium, who until a week ago were independent themselves, being 100% owned by its employees, were also too big. But they’re owned by Lion now, so they’re doubly out.
What happens then, if you flip it around and SIBA did decide to be more like the BA and started by adopting the same terms? BrewDog are back in, and so are Marston’s and all of their associated portfolio along with the nice folks at Tennent Caledonian. If Duvel-Moortgat decided to buy a UK brewery, they could join too, and before it sold to a Hong Kong-based financial group earlier this year, Greene King would also have been eligible.
So why are those making a case for the greater importance of independence in brewing looking to our US counterparts and saying we need to be more like them? Sure SIBA could reframe its threshold for membership and call it a definition of a “craft brewer” and it might make a few people happy but, honestly, I think we’ve grown a bit beyond that. By definition though, SIBA has a proposal that’s equivalent to the BA and we need to stop venerating the BA one while pretending SIBA doesn’t have one. It’s just not been as good at communicating about it.
There are still many lessons the UK beer industry needs to take from its US counterpart. It is years ahead in discussions on production and dispense quality, diversity and inclusion, sales and marketing to name but a few aspects. But if independence is what’s most important to you, stating that the UK’s trade association—one that genuinely only takes small, independent brewers as members—needs to me more like the BA is the wrong thing to do.
Instead, I believe British brewers need to get behind their trade association, stop fighting with it and attempt to help it work through its flaws. It already has resources like an independence seal available if that’s what really matters to you. It also helps small businesses work on and learn about key aspects like production standards and health and safety. It also has a completely new board of directors, one that I believe has the skills and intent to bring genuine change to the organisation.
SIBA will only ever be as effective as its membership—and it needs to grow its membership in order to obtain the resources that will help it become a more resourceful and useful trade body. There are immense challenges ahead for the British brewing industry, so I would implore brewers to join their association if this future really mattered to them.
Imagine the momentum that could be created if in 2020 it could grow its membership from 750 to 1000 members? That’s still less than half of all breweries operating in the UK right now. But it could begin to spell real change for small, independent breweries all over our little island.