Established craft brewers moving into supermarkets is a reflection of an industry maturing and is also recognition that selling into myriad independent venues is now the domain of the many newer brewers joining the scene.
Having been brewing since 2011 Richard Burhouse, founder of Magic Rock Brewing Company, says the growth for his business is now more in the packaged goods area than continuing to being just about selling into pubs.
“The new battleground for us is big customers like Marks & Spencer where we have three cans nationwide. The growth is here for us and also in the restaurant chains rather than pubs. The long established brewers need to break into these areas. It’s the reality of growing up. We need penetration into the mainstream while the small guys go into independents,” he says.
This is part of a plan to grow sales of the core range – that presently number 10 although the big sellers are Inhaler, Cannonball, High Wire and High Wire Grapefruit. Although he will continue to service the independent market a key part of this involves the constant flow of specials.
At the moment the core is 60% of sales, specials are 30%, and cask is 10%, with the latter reducing as keg and can sales increase.
Although Burhouse acknowledges that you “cannot be the hot thing forever” he is managing to strike a balance between being an increasingly mainstream operator and still appealing to the beer cognoscenti through limited runs of Magic Rock specials like Mind Control and Hedonic Escalation that still find a receptive audience.
The strategy has helped total sales increase by 30% year-on-year over the past two years and has pushed output to 13,500 hectolitres. It could hit 16,500 hl this year from a site that has the potential to generate 20,000 hl per year “if we don’t mess around with imperial stouts and lagers” that sit around in the tanks.
Around 1,500 hl of this beer is sold through the Magic Rock Tap Room that seems to surprise Burhouse with how popular it has been. On a Friday and Saturday night it is one-in-one-out as it typically hits its 350 capacity.
This has resulted in Magic Rock looking at opening up more retail outlets as it not only helps control margins but also pushes up volumes and protects the business from the “vagaries of the market”.
“We’ve looked at retail in the town centre [of Huddersfield] and at the moment we’re looking at something in the valleys with a food producer as a joint-venture. We’re keen to put forward an offer for the locals and improve the area and also create jobs for people,” says Burhouse.
He’s also been investigating the opportunity of opening a small bar in Leeds or Manchester. But what he is not intending to do is follow the likes of Moor and Cloudwater in opening up so-called tap rooms in London.
“You go to where there is a heavy market and we prefer local first. It feels more obvious to us. London is a great way to make money quickly but we’re not from London and I think there is a market that is loyal to London breweries. It’s not a priority for us,” he explains.
Such moves indicate a confidence from Burhouse who says the Magic Rock business is now at a size whereby it can “weather the extra competition”. It is also clear that his beers remain massively popular.
Indicative of the thirst among drinkers is the brewery’s requirement to allocate beers out to preferred customers: “We do two specials/collaborations per month that have to be allocated out. They help pull-up the core beer sales as customers top-up their orders with other beers. It’s a reciprocal [arrangement] with long standing customers.”
Also the 600 tickets for the forthcoming Sesh Fest Invitational (on June 9) at the Magic Rock Tap Room sold out in 40 minutes. It not only highlights the appeal of session beers (all the beers from the 30 invited brewers invited to serve must be ABV of 4.5% or below) but more importantly the high regard that Magic Rock continues to be held by the industry and drinkers.
Glynn Davis, editor of Beer Insider