Quick, call the Craft Beer Police, there’s a brewery outsourcing production! Too late, the industry has moved on; plus they’re too busy fielding calls from confused drinkers over what “craft” actually is having attended Craft Beer Rising.
Has the industry moved on though and do drinkers still care where their beer is brewed? What you don’t know, won’t hurt you, right? It may weaken your brand, but there doesn’t seem to be any sign of outsourcing production having damaged sales of Brewdog or Camden Town, if you’re willing to own up to it, of course. So why don’t more breweries broach the issue more openly?
This isn’t going to be an expose piece of professional journalism, a dig about gypsy brewers, or even solely focus on the UK. There are all sorts of models of getting beer to market, many of which I’ve considered myself. Simply, it will consider possible reasons a brewery may outsource production.
Breweries that package into cans and bottles can reach much wider audiences than similarly sized breweries that focus on cask and keg. That said, some people’s perceptions of how big a brewery actually is can become warped. The assumption becomes that a brewery is much bigger than it actually is. Many home-brewers may want to try brewing their favourite beer themselves and some breweries are open to sharing recipes, but what if someone likes a beer and wants to have that brand at a festival or show. Does the brewery divert orders from regular customers, miss out on a lucrative deal that could help improve their margins and widen their appeal, or does it as a one off make it elsewhere?
“Craft” brewing is new, but a lot of English breweries are quite old, and were originally specced for English cask ale beer. Nowadays drinkers are looking for various styles and breweries are trying to fill their glasses. Would you rather have a poorly made beer, or one that is true to style?
Most craft drinkers are likely to be aware of the US’s three tier sales system, and how abv doesn’t necessarily affect tax. How many are aware of the British tax system for beer or the Small Brewers Duty Relief? In a nutshell, small breweries pay less tax per litre up to a point, then the tax suddenly jumps up, and unless your sales also make a massive leap at that point, you’ll be worse off. This sort of explains why some seemingly very small businesses make big leaps in production size, instead of gradually getting bigger kit. So, if you’re close to the tax break for the year, it might make sense financially to outsource some of the production, or have your core brands brewed elsewhere.
Homebrewers can buy malt extract kits to make beer. It seems to get looked down on by all-grain brewers though as cheating, but what you would think of a commercial brewery using the same concept? Belgian beers traditionally have sugar additions, and nowadays a lot of American IPA’s have sugar added, but what if you found out your favourite beer was actually made from liquid extract bought from a chemical supplier to boost brew length by 50%. A decision the brewery made to use, because they couldn’t afford to buy a bigger brewery yet, and didn’t want to lose control by outsourcing to meet demand. High gravity brewing is common with the likes of Carlsberg, but craft drinkers like to think their beer is somehow purer. Looking back though it wasn’t until a particular brewery stated they were using hop bittering extract that this was accepted as “craft” either. Different, non-traditional ingredient use can reduce losses, which in a roundabout kinda way allows breweries to brew more beer with the same kit. It sure is convenient there’s no Brewers Association defining what craft beer is here in the UK.
The reason could just be much simpler. Maybe the brand has a local name, or the owners want to stay local to where they live. Maybe they like brewing on a small kit and keeping the business model simple, but they want to grow the brand. Perhaps they want to focus on churning out new recipes and think it would all just be a lot easier if someone else brewed the big sellers.
Beer is mostly water, so if you want to enter a distant market, it becomes expensive to transport, especially if you’re concerned with Cold Chain Logistics and keeping the beer fresh. Why not have another brewery make the beer for you? This last argument seems however to be quite weak, as going full circle it seems some breweries are outsourcing internationally and then re-importing it back home. Sounds barmy, but it’s true.