A Short Guide to Selling Beer in Bars, Pubs and Clubs in the UK

We have 2400 breweries in the UK and many more across the world importing their brew's into the country.

Competition for fridge, shelf and tap space has never been more fierce.

At BrewBroker we have more buyers on the platform than sellers which suggests even more launches in the pipeline for 2019.

I have been asked to give my thoughts, advice and some home truths to help people make the right decision.

The bottom line is you need a strategy, and a plan ideally BEFORE you brew your beer. You need an idea of how you are going to sell it, where you are going to sell it and who is going to do it.

In this episode I am only going to consider the on-trade (bars, pubs, clubs). This is meant to be a short guide rather than a comprehensive bible, so use this as a starting point and do your research.

Market Forces to Consider:

Consumer Demand: Good news is more people are drinking interesting beer, which means demand for mainstream beer is on the wane. This also means that EVERY on-trade outlet should have a craft / interesting beer solution and if they don’t it is your job to educate them why they should. That means there are plenty of outlets to go for (50,000 pubs the same again of other outlet styles)

Outlet Styles: You need to be mindful of the outlet style, and drinking occasion and what best suits the beer you are trying to sell and adjust your pitch / support accordingly. We are consuming beer in different places now: in fields, car parks, cinemas, cafes and even sports clubs.

Market consolidation: Big brewers now have interesting beers (Heineken: Brixton and Beavertown, ABI: Camden and Goose Island, Carlsberg: Brooklyn and London Fields). It is no longer a selling point to be local or interesting, in some London postcodes there are 5 breweries…. You also have to be commercial and offer some support to contend with big breweries.

Brand Support: Nearly all distribution is incentivised in some way. You need to think about selling your beer 3 times (sometimes 4 if you count the wholesaler, more on that below): Once to the decision maker, once to the bar staff selling your beer and again to the consumer buying your beer. So listing fees, installations, marketing budgets, staff incentives, POS, trips, branded events all need to play their part. The more volume an account can sell the more they will expect to be compensated. You may also need to consider retro’s (retrospective discounts), and special prices for increased volume.

Margin Erosion: Market consolidation and the increasing need for brand support are eroding margin, this has a knock-on effect to the brewing process. The price point you need to hit to get more tap permanency is likely to dictate the beer style, the amount of hops and the abv you’re your finished beer has.

Rotation: The holy grail for any beer brand is tap permanency, getting guaranteed ROS you can bank each month. However as above this usually comes at a cost and the vast majority of companies have to contend with constant rotation, meaning you have to stay front of mind more regularly, this can be done through more communication, more visits and more love.

Outlet Style:

Most outlets do their range reviews (what booze brands they are going to stock) on an annual basis and leave a little bit of flex throughout the year to switch things up, add in seasonal beers and new products. The bigger the business the more they will expect you to support them. Many people sell taps (wickets, pumps) and fridge space and will have ‘must stock’ and ‘may stock’ status brand.

Must stock is awesome but will most likely have cost you some margin, may stock is good but you still have to visit the estate (each outlet) and get the manager to order it over the other ‘may stocks’. Make sure you note the date of the range review and get in there 3 months prior to start the process for the following 12 months.

Independent Free-Trade (IFT)

I categorise these accounts with having no more than 3 outlets in their ownership and are free of all ties e.g. do not HAVE to buy a certain beer from a certain brewer / company.

Apart from the bigger chains (Brewdog inc Draft House, Craft Beer Company), most of the Craft Beer outlets fall into this category, but also many independent bars, coffee shops, tap rooms and bottle shops that also have bars. They are likely to be more flexible, need less brand support but are likely to rotate you more often.

One strategy here is to go ’narrow and deep’, pick a geographical area and blitz it. The Jubel boys have done an amazing job of this in Cornwall, you then have a blue print model for rolling out nationwide. These outlets are also going to be more open to direct delivery, however logistics is an entirely different subject.

Wholesalers

Businesses that deliver a variety of different products into an outlet. They buy from you at a price, they pay for delivery and storage and aim to make a margin by selling it onto the outlet. A middle man basically. The outlet however gets one bill, one delivery.

An outlet typically has a 2/3 relationships, but one main one as this gets them a better price. So be aware of who the wholesaler is before talking direct to the outlet decision maker. You typically have to sacrifice 10–20% of your margin, but the benefit is most have a sales force, the challenge is then getting your brand front of mind with that sales force, you also need to make sure you are not ‘doubling up’ — going to the same accounts.

National

National wholesalers include Matthew Clark, LWC, Bibendum Wines, Enotria and Coes. These guys aim to be sole wholesaler with their customers and have long standing relationships. The more sophisticated the business again the more they will expect from you in terms of support. Once listed you need to network the sales teams and understand the structure and how they work. Again, these businesses do range reviews, and some have tasting panels. However you need a mixture of product, brand and customer demand to even get a look in.

Matthew Clark Beer Buyer — Justin Wylde

Local and Specialist

If you are going ‘narrow and deep’ into a geographical area you will need to hit up local wholesalers too for example: Venus & Co, WDS, Amathus. As well as craft beer specialist wholesalers such as Pigs Ears. These guys are going to want less brand support, it is more about the product, offering something unique and customer demand. If is sells they will re order.

Leased and Tenanted

Large estates who have sold the right to either rent the building / business for an agreed length of time with varying degrees of freedom in choosing what to sell, to people or businesses. Leased outlets tend to get more choice and freedom, tenanted less. Punch and Enterprise have large leased estates, and Fullers for example have a large tenanted estate. It means you have to do your deal at head office and agree a certain price, you then have to do additional work to get the different businesses to buy your product. This can be in the form of telesales, printed media, online content and physical visits.

Small — Medium Sized Operators

I have categorised this as branded businesses with 4 or more outlets up to 15/20 often in a similar geographic area. They are likely to be more food led and may have even started their life as street food traders. These businesses are brands in their own right many will have VC backing or will be privately funded and have aggressive growth plans. They will be looking for brands to grow with them, looking for a point of difference. You will most likely need to develop a marketing plan for your brand in tandem with the buyer and execute this throughout the year.

Managed Outlets

Businesses with 20 plus outlets, most likely to be nation-wide. They will definitely have a buying department as well as marketing and most likely social media. Working with these businesses is a commitment, you cannot run out of stock and you need to be ready to deliver on all aspects of a plan. They will nearly always be working with a national wholesaler in fact Matthew Clark distribute to 90% of the managed on-trade business in the UK so you will have to be listed there, and that can take time.

Others

There are some models out their challenging the status quo for example: Eebria, StarStock and Jo Taylor at The Beer Company are all businesses you need to build a relationship with. There are also trade focused online retailers that cannot be ignored for example Beerhawk.. There are also direct to consumer sites including Amazon, Beer 52 and Honest, however this detail will follow in another episode.

In Conclusion

You need to have a plan, you need to consider all elements mentioned above. Admittedly some will be more relevant on the start of your journey than others. You need to be ready to service the more established businesses when the opportunity arises. There are organisations out there that can help you with this plan and can in some cases make introductions. Some to consider would be Tim at Elastic’s Field Agents, Phil at Boutique Beer, Sean at Hopfrogand Matt at Clever Craft . They all have different models for charging, for their time and expertise but contact them to understand which could be relevant to you. Start now, start contacting people and start building relationships.

In order to build your network, ensure you are present at the annual trade events that include: Craft Beer Rising, Indyman Beer Con, The London Craft Beer Festival, GBBF, Pub 19 and The Casual Dining Show to mention but a few.

If you want some further detail or advice by all means get in touch.