Publications that covered this story include: The Times, The Daily Telegraph, The Independent, The Daily Mail, The Daily Express and The Sun, all 31 August 2015.
- New cider producers also rises by 25% in a year
The number of new boutique microbreweries has accelerated in the last year, increasing by 24%, from 291 in 2013-2014 to 361, in 2014-2015*, as more start-ups rush to join the UK’s fast growing craft beer industry, according to our research.
We add that the 24% increase in the number of new breweries opening in the last year outstripped the number of new breweries opened in the previous year, when there was an 8% rise, up from 269 in 2012-13 (see graph below).
The number of applications to HMRC to launch breweries has nearly trebled in the last five years, up from 101 in 2009-10.
We explain that the rapid rise in the number of new microbreweries over the last five years has been driven by increasing numbers of start-ups eager to join one of the fastest growing segments of the UK’s food and beverage market.
We note that as a boutique product, craft beer can command a higher price, allowing microbreweries to compete with the larger breweries, such as Diageo and SAB Miller, which benefit from economies of scale, which enables them to produce vast quantities at low cost.
Recent research** emphasises the soaring popularity of craft beers with 80% of customers wanting an even greater range, demonstrating the potential for further growth in the sector.
James Simmonds, partner, explains: “This dynamic sector of the drinks industry is booming as new start-up breweries are attracted by the growing consumer appetite for their products.”
“Craft beer is viewed as an increasingly aspirational leisure accessory – so the profit margins available can be very attractive.”
“The recent success of small brewers across the UK also offers encouragement to budding entrepreneurs and investors.”
The Government’s Small Breweries Relief Scheme, introduced in 2002, provides tax relief for brewers producing less than 10.6 million pints of beer a year. Tax relief is based on output where the very smallest brewers, those with an annual production of less than 880,000 pints, receive a 50% duty discount. This discount on duty gradually reduces as beer production increases.
Recent breweries which have newly opened over the last five years include:
- The Five Points Brewery opened in Hackney in 2013
- Pressure Drop Brewery launched in Hackney in 2012
- The Knights Worm Catcher Brewery opened in Penge in 2013
- Two Fingers Brewery, launched in 2012 and is the only brand that donates all profits to Prostate Cancer UK.
Increased demand for boutique ciders as number of new producers increases by 25% in a year
Applications to HMRC for Cider Duty have increased by 25% since 2013-2014 from 24 to 30 last year. Over the last three years there has been a 131% increase, up from 13 in 2012-2013.
James explains: “Cider brewers are also rushing to join the boutique alcohol revolution and we’ve seen a sharp increase in their numbers over the last three years.”
“The drinks industry is providing a lot of new opportunities and it is a great pleasure to see that many people are embracing entrepreneurism by setting up new brands.”
The number of new microbreweries has nearly trebled in the last five years…
… whilst registrations to become Cider brewers has jumped 131% over the last three years
* HMRC 2014/15 tax year.
** Research from Peach Report, What’s the nation drinking?