What the demise of Brecon Tap tells us about the craft beer scene

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Drinks: Drinks
Location: UK, Wales
Other: Business

On paper, it looks like a recipe for sure-fire success: Start a brewery, crowdfund an expansion or tap room, and repeat ad infinitum until you achieve beer world domination.

And why not? It’s worked – so far – for Brewdog. In the last month alone, the Scottish brewer opened an expensive new facility just to make sours, and bought the Draft House group of bars.

In March, Leeds-based craft brewery Northern Monk smashed it’s £500,000 crowdfunding target in just three hours, eventually netting almost triple that figure in little over a month.

Meanwhile, London’s Five Points has secured almost £860k through the same platform, Crowdcube, and Bristolian brewer Left Handed Giant is well on its way to turning its purpose-built brewery, tap room and restaurant vision into a shiny reality thanks to just over £1m in crowdfunding – 237% its original target.

But the recent experiences of outgoing SIBA chair and Brecon Brewing boss, Buster Grant, proffer a sobering antidote to the intoxicating clamour of the current craft-beer gold rush.

Grant’s resignation from SIBA after just a year in the job comes hot on the heels of his decision to pull out of his two tap-house venues, operated under Brecon Brewing’s sister company, Brecon Inns.

Its launch in 2016 was bolstered by a more modest crowdfunding effort aimed at the immediate local community. Investors were promised 50% of their stake as a bar tab, provided on a loyalty card, every year for five years – effectively a 250% return.

That modesty was reflected in the initial set-up. The Brecon Tap was a simple, high street unit in a market town of 8,000 people, where Brecon Brewing could fly its colours and enjoy some direct interaction with locals.

The Kilverts Inn in Hay-on-Wye, 20 miles away, was a different proposition all together – a sprawling Edwardian pile with 12 letting rooms and a vast beer garden. The realities of doing business in a town of just 1,500 people, which relies largely on spring and summer tourist trade, have perhaps hit home.

Grant told Imbibe how Brecon Inns had run into financial problems as a result of a difficult winter trading period and it’s certainly true that, in low season, for a rural venue like Kilverts, one bad weekend can ruin the month, a run of bad months can ruin the year.

These issues, he said, had been exacerbated by the sudden early retirement of his close colleague Brecon Inns co-director and Brecon Brewing general manager Duncan Ward, due to ill health.

Based on Grant’s experience, location is clearly a key factor in determining the success – or otherwise – of expansion projects. A proven, small scale, high-street model might flounder in a more ambitious rural setting, particularly one so at the mercy of the seasonal whims of weather and tourism-driven footfall.

Equally, it follows that the success of a bare-bones brewhouse taps run on a shoestring doesn’t necessarily translate to a high-end, city centre operation.

My own experience, running a bottle shop and tap directly opposite the Kilverts in Hay, points to a different, more cautious, consumer air since Brexit and the Conservative re-election. It, too, is due to close, although for altogether different reasons.

And there is also the danger of simply over-reaching. In SIBA’s 2018 report, a full fifth of members who responded to its survey said they expected a drop in turnover in the coming year. Huge, crowd-funded stakes are being gambled on the favourable winds of the craft beer boom – but the bet can easily falter in a bad case of the doldrums.

Grant comes with many years of brewery experience under his belt and sits on the Welsh government’s Food and Drink Industry Board. His business partner Duncan Ward brought two decades of pub management nous to their Brecon Inns project. Together they were unlikely candidates to prove so vulnerable to staff issues, bad weather and market fluctuations.

This, then, could be a warning to the current generation of young brewers and pub entrepreneurs staking their money – and others’ – on ambitious expansion.

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