Blogs/Vlogs

The paradox of why pub closures increase as craft beer breweries boom

17 December 2018

According to the latest figures, an average of 18 pubs a week are closing, as establishments continue to struggle to match the rising trend of experiential drinking or staying at home.

In the last year alone, Britain has seen a 3.2% decline in licensed premises, with 2.9% less drink-led pubs and bars open in 2018 compared to 2017.

Why is this?

Consumers are being drawn to experience-based drinking locations over a pint down the local pub offering no extra incentives. From master classes, where one can learn to brew your own, to discovering the source of a craft beer on brewery tours, beer drinkers in particular are looking further than traditional tastes. Consumers want to indulge in unusual and innovative experiences or learn more about out how their drink is made, whilst preferring to support and drink from smaller and local breweries.

Picking up on the trend, many bar and restaurant entrepreneurs are finding every opportunity to open the next best theme or experience led bars in order to lure in consumers. The likes of Flight Club, a bar combining the traditional pub game of darts with drinking, is proving popular with consumers, but it doesn’t stop at the common pub sports – other competitive leisure activities are helping this sector grow. Examples of successful bars include Swingers, a bar combining crazy golf, street food and drinks, and Bounce, a ping pong and pizza led bar, both of which have opened new haunts across the capital in the last three years.

Many beer giants also want to capitalise on this growing of trend of consumer experiences and have looked to craft beer breweries, to offer local and more sustainable craft beers.

Examples include Heineken, who earlier this month bought a majority stake in Spanish craft brewer La Cibeles and Diageo, the world's largest producer of spirits and a key producer of beer, is constantly looking to develop new beer brands to capture what the UK beer audience is drinking.

Research from one of London’s craft beer subscription services, Hoppist, found 111 breweries active in the capital alone in October of this year – almost a 30% rise compared to 2017 – with at least 20 pubs and bars with on-site brewing equipment, in an attempt to meet the rising demand of consumer experiences in an industry which shows few signs of slowing down.

There has also been a growing appetite for gourmet restaurant takeaways in the UK, which has fuelled a boom in food delivery services such as Deliveroo, UberEats and JustEat. In addition, over half of consumers (approx. 59%*) would prefer BYOB restaurants as a cheaper equivalent when dining out. With many craft beer options widely available in Britain’s supermarkets, it’s no surprise to see why a craft beer is the beverage of choice in these ever growing and popular ways of dining and drinking. Consumers are increasingly choosing to dine in a more cost-efficient way, rather than at a costly pub, where high prices are turning them into an unaffordable luxury.

A supermarket that has helped fuel this new trend of drinking and dining at home is Waitrose,** which has reported that brewers are consistently launching increasingly interesting and off-the-wall flavours across the craft beers and lagers division as consumers get ready to embrace the new. Looking further, the supermarket chain predicts that it will be seeing more of this bravery on their shelves in 2019.

The craft brewery industry is clearly benefitting from the rise in consumer popularity and current drinking trends. In order to break the trend of pub closures we are currently witnessing, traditional public houses will need to consider added value incentives to get people out of the house to drink and dine. This means keeping up with offerings which experience led bars and breweries are supplying to consumers.

If you would like any advice about the topics covered in this article, please contact Martin Jones.

Sources

*Findings from Westfield – How We Shop– Food Edit Report

**Waitrose Food and Drink report 2018

Hoppist research

CGA research

 

Let's talk! Send an enquiry to your local UHY expert.