A UNIVERSITY of Dundee academic researching the craft beer industry says lessons learned during the pandemic could be “vital” for craft brewers during the cost-of-living crisis.
Dr Daniel Clarke, from Dundee university’s school of business, recently co-edited ‘Researching Craft Beer: Understanding Production, Community and Culture in an Evolving Sector’.
The book outlines how some craft brewers used innovation during the lockdown to avoid loss of income and how these innovations can be applied to tackle the cost-of-living crisis.
Clarke worked on the new book along with colleagues from Edinburgh Napier University and the University of Huddersfield.
One of the chapters, co-authored by Clarke, explores the impact of the pandemic on craft beer producers with a range of brewers invited to share their experiences.
The British Beer and Pub Association reported that pub beer sales plummeted by 40% in March 2019 compared to a year before.
By May 2020, 70 million pints of spoiled beer were poured down the drain.
Previous research shows 65% of small independent brewers in the UK ceased brewing completely while 31% slowed production and only 1% reported an increase in brewing.
Government support for businesses supported larger commercial brewers but small craft brewers were often unable to access support due to tax status and low-profit levels.
Sales were slowed due to an inability to reach consumers via traditional routes like pubs, restaurants and local markets however some brewers increased online sales.
One brewer told researchers that the whole of their online sales for 2019 were matched in April 2020 alone, another said online sales jumped from £100 a week to £15,000 a week in the first week of lockdown.
Dr Clarke and his colleagues found that the pandemic, while posing a threat to brewers, also created opportunities for some.
The biggest of these opportunities was connections made with the local community being strengthened as customers reassessed their values during the pandemic.
People were drawn towards buying locally and direct from producers which helped offset the lost income caused by Covid restrictions.
The added emphasis on direct sales has also meant that more producers have either created their own brewery taproom or are planning to do so.
Learning from these and other experiences of the past two years will be vital to those brewers seeking to prosper at a time of growing inflation according to Dr Clarke.
Dr Clarke said: “We wanted to explore the impact of Covid-19 on craft beer to determine both what the pandemic did to the sector, and what it can do for it.
“The picture that has emerged is one in which craft brewers raced to repurpose and innovate, turning physical spaces within the brewery into opportunities to generate alternative revenue streams.
“They have also sought to find new ways to use their customers’ spaces as marketing spaces and to change their own approaches to decision making.
“Consumers were not only being physically moved to transact online but also being emotionally moved to reassess their spending habits in favour of new local products that resonate with their own values.
“It remains to be seen whether these consumer habits will hold up as the cost-of-living crisis leads to a rise in prices and disposable income shrinks.
“What is clear, however, is that craft brewers possess incredible resilience.
“Having faced down one existential threat, they can use the lessons learned from Covid to survive this latest challenge.”
The editors of ‘Researching Craft Beer’ summarise that:
Social media became more important than ever during the pandemic, allowing brewers to remain connected with their consumers whilst creating a shop window or a full-fledged online store.
Consumers reassessed their spending habits and values, challenging traditional and established business models and creating opportunities for those with flexibility and diverse portfolios.
Restrictions sparked innovative ways of getting products to customers, bringing small independent business owners closer together.
The pandemic helped brewers connect with local audiences and buyers, bringing new customers to the brewery and strengthening existing relationships with the kinds of consumers brewers want to connect with.
