The Cost Of A Pint...

There was, not long back, much made in the media of the arrival of the £4 pint in 2008. Much of this was blamed on increasing raw material prices, with a jolly old dash of increased beer duty.

So is it really true?

Well yes - if you go to expensive clubs, where I suspect four quid a pint is possibly old hat. But for the rest of us peasants in the real world? Well, never say never. So what exactly is going to happen with beer prices then, I hear you ask. Oh, you didn't ask. Well never mind, I'm going to tell you anyway....

1. Raw Materials
I have alluded in the past to price hikes in our ingredients, well, we now know what those hikes are. Malt, which is the secondest largest ingredient (water is of course the first) has, in our case, risen in cost by around 20%, mostly as a result of the poor harvest of 2007 but of course fuel & energy costs increases have played their part as well. This translates, approximately, into a little under a penny per pint extra on our costs on a 3.8% beer (slightly over a penny on a 5.2% beer). Hops have gone up a lot more - mostly they have DOUBLED in price, some have TRIPLED, others just aren't available at all. This equates, again on the costs of our 3.8% beer, to around 4p extra per pint. The amount hops used varies somewhat according to how much hop flavour/aroma/ bitterness we want, so heavily hopped beers are hit more than the more lightly hopped ones, but that 4p is about in the middle.

The rise in hop prices is for the same reasons as the malt - but hops have been harder hit. It would be fair to add that in both cases a constant squeeze on the price paid to farmers for both commmodities has resulted in acreages of malt and hops decreasing faster than is sustainable, otherwise the situation would not be as grim. (Sadly this squeeze is from the large players in the industry, not us small guys who have always been happy to pay a fair price. But it is always the small man who suffers most in the end). So the situation might not improve for a few years, whatever future harvests are like. It takes but a few hours and a few pounds to grub up an esatblished hop yard (a hop field in laymans terms). It takes much, much longer, at a much higher cost, to put the hop yards back again. Indeed, if supplies of malt or hops do run out before the next harvest - which is not impossible - then prices will rise again.

So to recap, we have already added 5p to the cost of a pint.

2. Brewing / Delivering Costs
This is all a little harder to fully quantify, as over the last two years we have tripled the number of casks of our beer we have delivered, but at the same time reduced overall mileage as almost all that growth has been local. Likewise as production goes up, so does efficiency, so the potential for savings rise with the costs. But we all know that electricity and gas have increased immensely, as has the cost of fuel, so there is still an issue here of above inflation increases in costs. And of course all our suppliers have this problem, and so there prices rise to reflect this as well - which is yet another cost burden spread down the line. I think it would be fair to say that 2-3p per pint to counter this is about right. As I said, it is difficult to accurately quantify all this as our increased production makes a year-on-year comparison meaningless. Of course we don't have the time to sit down and do the comparison sums properly. I'm not saying you the reader isn't worth the effort, but frankly, we don't have the time just for the benefit of this blog - although it would be interesting to find out.

3. Admin / Staffing
Red tape is much discussed, especially in terms of how it is strangling industry. But, to be honest, I don't think (for us at least) it's a big problem. But we are smaller than the threshhold for much of the many rules and regulations, so as we grow this may well change. That said, I never will understand why we get more visits from people checking text heights on bottle labels than from people checking we aren't poisoning drinkers. But as both are all nice folks, I can live with it (no really, they are, and rules are rules and are worthless if they aren't enforced).

We don't have staff at the moment (we did, but he left to do wonderful things with herbs - and cook breakfast), so once again we don't have a social life (limited that it was), but when we did have a life, that too suffered from these extra costs, so we need to take more money out just to pay bills. I worked out once that every penny on fuel probably actually costed us as a business up to 1.5p as a result of all these indirect costs.


So, where are we now, 8p or so a pint on our costs. Allow something for us to reinvest, take a pay rise - or even just get paid, and 10p is the ball park. That is one hell of a percentage increase on our trade prices (we are neither cheap or expensive), and of course your average landlord has to bear a raft of other costs as well, be it above inflation rent increases, the increased costs of the new licencing laws, staff costs, their own energy bills, and so on. A few years ago I would have made reference now the extortionate running costs of their Jags as well, but I've though about this - and I am struggling to think of any of our regular, and not-so-regular, customers, that has a new car, let alone a Jag. Well maybe one had a Jag until recently, but it doesn't count. It certainly didn't start.

So if we put our prices up by 10p a pint, and the landlord will add a bit on because his costs have risen massively as well (believe me, running a pub is not as much fun as it was). This may then be another 5p, maybe 10p. I reckon the average price around here at the moment is around £2.50. So if we add our 10p, and another 10p for the landlord (we'll be kind), we hit the dizzy heights of £2.70. Then there's the March budget, and God forbid it should happen, but lets assume the doom-mongering media-hyping State Nannies decide to ramp up beer duty to stop us all from smashing up Woolworths every Friday night. Shall we say 10p on a pint (please, no).

That's £2.80. Still £1.20 short of the predicted £4.00. What do you reckon? Give another 20p to the Nannies, in the hope they'll spend it on another seminar and fail to ever come back? That leaves a whole pound. Well, 40p to the lanlord, 40p to the brewer, and 20p left to give the Police a reasonable wage (they should try the Army - they get shot at slightly more often for a lot less), in return for arresting a few more criminals.

I can't speak for anyone else, but that extra 40p will be well spent here. Probably on a plane ticket to somewhere where the beer is a little cheaper....

Newsflash - Lapwing Update!

Follow my post of 12 February 2008 (which was yesterday as of when I wrote this, but given that it might be several years before anyone reads this, I ought to be specific), we can now confirm the arrival of Lapwings. Lapwings spend the winter near water (estuaries etc), and move inland for the spring/summer, where they like to nest in fields (long grass & all that). This is all done communally, even to the point of having a nursery, whereby all the chicks are looked after by just one or two adults on a rota basis.

During the afternoon of the 12th, as I was out walking (well, it's more fun than the Beer Duty Return I should have been doing) a solitary confirmed Lapwing flew over. It then landed and proceeded to start 'odding-around' with it's pointy-aerial thingy erected (note my full knowledge of bird vernacular here). Within 90 minutes a full strength squadron of them flew over, heading for same fields they bred in last year. Given the apparent increase in their numbers this year, it will be a noisy summer...

We await the next arrivals - be it the Flycatchers, Swallows, Martins, Swifts, Hobby, Marsh Harrier. Most of these will be around by Late April normally...

RSPB A-Z Of Birds

I Hope We Know What We Are Doing...

So, we have massive hikes in raw material prices, allied with global shortages of the same, spiralling (upwards, of course) fuel & energy prices, an ever-shrinking marketplace thanks to restrictive trading & too much competition (much of it from breweries that aren't run to be commercially viable, but as a 'hobby'). And if that wasn't enough, we have State Nannies hell-bent on over-demonising all forms of alcohol to stop a tiny, tiny minority who still behave like idiots even when they are sober. That is our market in a nutshell.

There is only one obvious course of action. Expand!

Whilst we have been planning this for a long, long time (longer than was planned), it is, given the above, even more important that we grow - because then we can afford to target new markets, grow successfully into the shrinking existing one, and expand our offerings in the process.

So just what are we doing then? Firstly, we are putting in a new beer store - our existing one is cramped, badly located (it was always temporary), and hard work. Not only is the new one bigger, it is at ground level - so we can use a fork lift (and that, believe me, will be a God send in itself). It will also enable us (for a variety of reasons) to allow our beer to mature in tanks, which will free up some more casks not only to help cover increased production, but it also means no more being unable to brew just because we have no spare casks. Secondly, we upgrade our cask washing facilities, speeding up that particular job immensely. Thirdly, we will have more storage space for malt supplies - so they won't be in the way (and as a side benefit, malt handling prior to starting each brew will be simplified, and easier). And last, but not least, in the middle of it all will sit a rather useful, and somewhat flash, automated bottling line. Which is of course where new markets come in. If the drinker increasingly won't go to the pub, the pub, it seems, is increasingly expected to go to the drinker. Enter Bottled Beer. And of course having a full range of bottled beers gives us the chance to look at restaurants (Beer and food? A fine match, much better than wine.), off-licences, supermarkets etc.

Yes, I did say supermarkets. I will go one further, and say Tesco. It was winning their Bottled Beer Award (East, 2008) that sparked this off, and we'll be on their shelves (if all works out to a mutual advantage) by the summer. It has been suggested, nay hammered into us in some cases, that Tesco are the root of all evil, and not very nice to be dealing with. But our eyes are open - they are a huge dominant global corporate giant, we are but a small little concern where even the vehicles have names not ID numbers. This is not good for us? Maybe not. But if we follow their requirements (and in a past life I got to learn why these requirements were needed, and their is some common sense involved), supply the sort of product we would be happy to drink, and do our best to be flexible, I think we'll be alright. And if it doesn't work? Well, we'll have had some immense exposure to the public. And we certainly don't ever intend to have any one customer so big that we can't manage without them. Yes, we'll want to court other large chains, but it will be different beers.

Of course in an ideal world, we'd all be drinking down the pub - but that is not happening, and we'd be stupid not to follow the market. Ironically, I suspect the day of the pub will return - but not in the villages that are already without, and those that quite possibly soon will be. Let's just hope in the meantime that alchohol isn't priced out of the reach of the sensible, moderate drinking majority, in a flawed attempt to control the few idiots, who, quite frankly, are only idiots because society has fromed that way. But then I guess I am missing the point. Education costs money. Alcohol brings it in. It just depends how much they think we'll pay for it, because we can't as a Nation afford to reduce tax revenues. Too many buffoons to pay for.

So all in all, I'm not worried about knowing what we are doing. I'm more worried that everyone else knows what they are doing....

Nature Notes, Feb 12 2008

Now I don't know when Spring really starts. Certainly, there are now signs of trees budding in anger, and we can't hear any cuckoos (but then we don't up here at any other time either). But the crows have started heavy lifting (twigs, crisp bags, small dogs etc) so they must be starting to build something. The Brewery's Guard Robin has got himself a potential nest site (away from us, so we are getting less taunting). The Reed Buntings have found the reed bed, and appear to making themselves comfortable. Golden Plover in their hundreds (literally) have been circling overhead. Fieldfares have been flocking, and the occasional gaggle of Lapwings may have been spotted.

The Pheasants have started fighting - males of course, and no doubt some State Nanny will say this is due to the presence of alcohol nearby. The Partridges are, well, being Partridges (not that they can do that well, bless them). The Great Tits are getting very vocal (especially on the BBC Parliament channel...). The ever tuneful Birds Of Significant Colour are all mated up, and the Doves & Pigeons are getting boisterous (and shot). The Hares are getting nervous (they are already numerous).

So some of the above seem to be thinking about Spring starting, and others may well feel it has already started. Either way, in the last week or so the outside world has erupted into life, there is unquestionably far more activity all round, and a lot more noise. Of course not all of it is good - there is after all only so much owl your ears can take. We have the constant screeching of the Barn Owls (last years pair, plus at least one more we think), coupled with the constant hooting of the newly arrived Tawny (who is now getting a reply it seems, so maybe there is pair in the offing?), and the occasional chipping in from the Little Owl who lives down the lane (no, really). Still, as irritations go, it does make you feel all nice and warm inside. Unless of course you are a mouse, in which it must at least make you feel wanted.

We have even seen our first lizard of the year, although given that he was frozen to the cellar steps just after New Year, the siting may not count for much evidence of an early spring.

The Buzzards have been mostly absent of late, but then I guess there aren't many good thermals for them to play on at the moment. The Kestrels are ever present, and there are signs of sparrowhawk activity - mostly abandoned Pigeon wings, but one was seen playing chicken on the local highway, trying desperately to remove some roadkill rabbit, succeeding at the last minute, just avoiding being hit by a car.

To round off, here are some interesting facts - Barn Owls hunting by listening, they can apparently hear a mouse's heart beat from over 200 yards. I can't even hear my own, but then maybe I don't have a heart? Kestrels meanwhile, can see ultra-violet light, which is handy because their favourite prey (voles) leaves a trail of urine that reflects ultra-violet light. We think we have it bad, but your little vole? Well, not only does he appear to have a permanent bladder disorder, but as a result is forever telling his enemy where he is. Now that is a bummer.

Of January & Cynics

Given the sudden lack of postings (again), you could be forgiven for thinking we had been visiting Bin Laden at Lord Lucan's new home. But fear not, we have been here all along, just too busy (or too lazy?) to publish any worthy waffle here.

Well, not anymore. So what has been happening? Christmas has apparently been and gone (Our friends at Tring had Christmas last week it seems, so we are not alone...). Quite a bit of time has been spent sorting out stuff related to the expansion, which has now started (or it least it sounds like it has). A regular blog update relating to the work will appear on this very site, probably. So far the huge increase in raw material prices has not caused us to drop down dead, but that could yet change. Oh, and Mother Nature has just this week decided it is now Spring (more on this too on this site in due course). But the really pertinent stuff must be what is, and has been, brewing...

January, as any brewer will tell you, is generally very quiet in the trade. This is down to Christmas overload amongst the great unwashed, and then come the end of the month, the arrival of the credit card statement. So February therefore often isn't much better. Now of course bills & wages etc still ahve to be paid, so it is not uncommon to find breweries offering big discounts at this time of year, just to get some money coming in, just to cover costs. Thankfully, we have not (yet) ever had to resort to this. And this year it seems that we are not alone - although it may have more to do with the fact that an increasing number of breweries are now discounting heavily all year. It might even be the raw material increases, but that would seem to contradict the previous argument. For us, January was, against all expectation, a good month. Not the best, but good nonetheless.

Why? Well, being cynical, we decided to try a new tack. Specials. Now we have often had specials available over the last 3 years or so, but not to the degree we have now. For example, in January we had Boadicea 4.0% & Western Cavalier 3.8%, and now we have Venus 4.4%, Woolwinder 4.1% & A Little Bitter Science 3.9%. Why is this cynical? Because there is a demand for new beers in trade. In the past we have tried to focus on our core range, but now, with a whole stack of new casks to play with, and the problems with certain hops, we have been able to look again at our range. So, instead of bringing in new regulars, we have joined the band of those who constantly change brews. Once it has been brewed, that's it. No re-brewing. Of course we still have our core beers, but instead of brewing a special for a period of time, we are doing one brew, then moving on. Eventually of course we'll run out of permutations. But names? No. So yes, it's cynical. But it works, and unlike some breweries, we are actually changing the recipes (to varying degrees) between each name. So cynical, and ethical.

This means more Western beers (we have over 50 more of these train names to use yet), and more beers named after LNER A1, A2 & A3 locomotives. Britannia, as mentioned in the past, has been hit by problems with getting Bramling Cross hops. We have managed to source some now, but not enough. So Britannia will be rested for periods through the year, to be replaced by a range of similar strength (4.4%) beers, all named after Britannia class locomotives (ironically, Britannia was never named after a train..) And there are plenty of them. And then we have loads more - certainly more than you could shake an anorak's notebook at. And that is just trains - other themes/names aren't hard to find of course, but a picture of a train seems to help sell beer. Maybe we all have a bit of the anorak about us?

And when we really do run out of recipes? Well, who'll remember how they all tasted. And maybe then we will let our ethics slip like we have with our principles. If ethics and principles REALLY made a business succeed, they'd be taxed.