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Morning Briefing for pub, restaurant and food wervice operators

Fri 14th Jun 2019 - Friday Opinion
Subjects: Roll out the barrel, bean and definitely not gone, and celebrities? get them out of here
Authors: Glynn Davis, Andy Grelak and Paul Chase

Roll out the barrel by Glynn Davis

Watneys Red Barrel was the beer that prompted the formation of real ale movement the Campaign for Real Ale (CAMRA) in 1971 because this fizzy liquid, held in pressured keg containers, was deemed tasteless and a threat to traditional real ale. In the first CAMRA Good Beer Guide, drinkers were infamously advised to “avoid it like the plague”. 

The beer became the poster child for all that was bad about keg beer – compared with cask-conditioned real ale whose condition (let’s call it sparkle) was due to natural carbonation and not injected gas. 

It has taken almost 50 years before we have now reached a stage where Watneys is making a return via a £400,000 crowdfunding plan, albeit with the company stating it will produce decent beer this time! Since it is questionable what residual value is left in the brand and with the beer likely to be vastly different, I’m left to ponder the value of such a resurrection?

Anyway, the potential return of “Grotneys” is merely an aside to the main event on CAMRA’s near half-century anniversary – the movement’s revolutionary action to allow keg products at its major event, the Great British Beer Festival (GBBF), for the first time.

Having shunned those beers for all those years it has finally succumbed to recognising things aren’t as simple as keg beer bad, cask beer good. Life is so much more nuanced today. We have a situation where the majority of the output from the newer craft brewers is keg. This is mainly because keg is easier to look after through the supply chain – ensuring it has consistency at the point of dispense isn’t difficult – and the brewers can charge a lot more for it than cask beer.

Keg is the liquid younger consumers are downing, leading to the sad decline in cask beer sales, which had fallen 6.8% in volume terms in the year to July 2018, according to the British Beer & Pub Association, with few signs of a turnaround since. In fact, if you look at Fuller’s sale of its brewery to Asahi, it’s quite the opposite. If cask beer had been flying out the door that deal probably wouldn’t have materialised.

What appears to be a major change of heart by CAMRA isn’t strictly the case. The reality is keg beer has been served at GBBF for a number of years at the international bars, where drinkers have been able to enjoy keg lager imported from the Czech Republic and Germany. Such beers are supposed to be held in pressured containers. Cask versions of these beers would be ridiculous and, in most cases, impossible to produce because of the methods and ingredients involved.

It is therefore rather strange that the US Brewers Association has sent over a consignment of cask versions of American breweries’ keg beer to GBBF for some years. They have been well received by many but I’m not among them as the exercise has merely highlighted how specific styles of beer are better suited or designed for keg while others are at home in cask format.

Against this backdrop, the major debate about beer today surrounds its final condition when it’s served in the boozer – and this is where cask has been losing out. Unless it’s looked after – from brewery to pub cellar to the point of serving – what is in the customer’s glass won’t reflect the product created by the brewer.

In demanding the beer the brewer intended, my own drinking habits have increasingly skewed towards buying keg beer from craft brewers but, in reality, the brews I’ve enjoyed most have invariably been cask. When attending tap takeovers at my local, The Great Northern Railway Tavern in north London, the standout brews have all been cask but produced by renowned companies that predominantly brew keg beer.

Memorable beers have been Siren Craft Brew’s Suspended In Fog, Magic Rock Brewing’s High Wire, Northern Monk’s Eternal, and Cloudwater Brew Co’s Pale Ale. These were the best of these brewers’ selections on tap when served in a pub with top cellar credentials. This goes to show that unlike in the 1970s when keg was the biggest threat to cask, today’s biggest threat to cask is cask.
Glynn Davis is a leading commentator on retail trends

Bean and definitely not gone by Andy Grelak 

The explosion of the cafe society in high streets across the UK and the majority of economies across the globe has been good for the international coffee trade and many of the 25 million souls who rely on it for their primary income.

We only need to look to the mid-1990s, when many coffee roasters languished in the low-profit and distinctly unsexy vending/Maxpax/office coffee market, to recall prospects looked bleak. The primary concern was coffee simply didn’t register in the drinking repertoire of many young adults – fizzy drinks were king!

Today, general market prospects and the atypical profile of a cafe society user couldn’t be more different. As it was in its first boom in Georgian coffee houses, coffee is once again at the heart of a new creative energy and verve.

Why? Perhaps because once the model and its profitability was proven by the likes of Seattle and Starbucks, it was never going to take long for others to follow where those trailblazers led.

Put simply, coffee is a highly profitable business. Cast aside for a moment the fact little has changed regarding the earnings and welfare of the farmer or those working on the co-operative, once a green bean arrives at a north European port it becomes a highly prized and valuable commodity.

The actual cost of the coffee in a typical medium-sized cup of Joe is no more than 10p to 15p. Ok, there’s milk and overheads but it doesn’t take a rocket scientist to work out how quickly an operator can fill its coffers.

Nespresso must stand head and shoulders above any other in the latest episode of coffee’s story. The brand has single-handedly changed consumer perception over the cost of a cup of coffee at home and what represents fair value away from home – from 1p to 2p for your good old Nescafé to 35p or more for a capsule of pure indulgence. 

Hence, we’ve seen the emergence of the ubiquitous corporate chains and vended offers and, in the past ten years, the rise of the artisans, which have made coffee cool like never before.

Are artisans profitable, though? Are they able to roast to scale? Do they actually know how to craft the prized beans so carefully curated from territories thousands of miles away? Should a pure Central American or east African espresso really be taken seriously? These are thorny questions for a long night at the bar but, nonetheless, questions that had never been answered until the rise of the fourth-wave artisan players. 

What the heck is the fourth wave, I hear you ask? Well from where we’re sitting it’s roasters that know their beans and how to make them profitable! 

The fourth wave combines all the great qualities of “artisan” – attention to detail, care in selection and the opportunity to supply by the case to discerning clients – with the corporates’ “better bits” – price formulas, value engineering to manage crop cycles or quality dips, and the ability to supply seamlessly in large quantities. 

The market is rapidly changing and there’s a fear the artisans might struggle to keep up. Look at the number that display an in-store 15-kilo roaster yet use a third party to roast the bread and butter volume.

Inevitably, as the gourmet coffee offer is commoditised and sanitised in every filling station and hospital, it’s inevitable innovation will keep things rolling forwards to ensure consumer engagement. However, innovation also adds a further dimension of complexity. 

Take cold brew, which seemed so simple when it first appeared. Steeped grounds, natural extraction, higher caffeine and lower acidity were merits that excited the hardcore aficionados and a myriad of weirdly branded and shaped medicine bottles appeared in sandwich bars across our major cities! Now nitro has added a new cost barrier and a level of consumer expectation. The corporates will always win, unless the fourth wave can really make headway and save the day!

Coffee is the world’s second-largest traded commodity after oil and, like any commodity, is a valuable resource. Like oil, it inevitably attracts speculation from fund managers in all financial capitals. 

Barring catastrophe, supply and demand is relatively secure in the medium term yet we continue to see the market yo-yoing between new lows and newer highs with the result prices jump at the checkout but rarely fall. The elixir of such a profitable market place is prices only move one way and not the other. Instead, the “big boys” get slightly more generous on their promotional offers but the headline RRP never falters.

Is your business ready for the fourth wave? Let’s discuss it over a coffee! 
Andy Grelak founded The Coffee Collaborative with chef Luke Thomas, operations expert Paul Kemp and Dan Einzig, of brand design agency Mystery 

Celebrities? Get them out of here by Paul Chase

We live in an age when celebrity endorsement means everything and one in which it’s increasingly difficult to know where reality TV ends and real reality begins. The career of Jamie Oliver is a case in point and has set the template for others to follow. It began with a Jack-the-Lad character – the sort of cheeky chappie your Granny would think of as being a “bit of a one”. 

Jamie discovered being a celebrity chef who knew a thing or two about cooking meant people would listen to what he had to say about things he knew little about and, from being a foodie, he became a food campaigner – an entire generation of kids will never forgive him for depriving them of turkey twizzlers! 

He joined the anti-sugar loons, campaigned against the non-existent child obesity epidemic and pretty soon politicians began to take him seriously. Meanwhile in his own restaurants he continued to serve food and a dessert trolley that broke all the moral prescriptions he wrote for others. As we now know, it didn’t end well. 

Which brings me to Adrian Chiles, who is a likeable sort of bloke and made a programme on alcohol some months ago for Panorama in which he talked about his own heavy drinking. Although the programme was one-sided, I came away feeling Chiles was someone who wanted to tell his own story as a cautionary tale for others. And although the cynic in me is irritated by this modern tendency for celebs to bare their souls, I could see where he was coming from.

However, baring your soul is a slippery slope. Before you know it, you can move from telling others how you went wrong to telling them what they need to do to live a virtuous life free from the kind of mistakes you’ve made in your own. To do that you need a narrative and, since many celebs are far too busy being celebs to think for themselves, as sure as eggs are eggs a bunch of seasoned moral campaigners pop up with a bottle of ideological pills designed to soothe their ills. In Panorama’s programme entitled Britain’s Drink Problem (we haven’t got one), who should it feature but our old friend Professor Sir Ian Gilmore, head of the neo-prohibitionist Alcohol Health Alliance. Gilmore was, of course, presented as an impartial medic rather than the UK’s leading anti-alcohol campaigner.

The programme was littered with false claims. For example, it was claimed alcohol is cheaper in real terms than it was 30 years ago. Alcohol is more expensive in real terms than it was 30 years ago, but it is more affordable. Greater affordability is largely a consequence of wage growth outstripping price inflation, not price cutting – and actually alcohol price inflation during the past 30 years has outstripped increases in the retail price index.

Chiles complained the alcohol industry didn’t give the current low-risk drinking guidelines on product labels – often quoting the old guidelines. Good. The new guidelines have nothing to do with science and everything to do with temperance ideology. They were manipulated by a small clique of anti-alcohol campaigners on the Guidelines Committee who prevailed on the modellers at Sheffield University to change their assumptions to produce the reduction in the guidelines they were looking for. I’m all for accurate information on product labels but producers are under no obligation to repeat temperance lies.

The Institute of Alcohol Studies, which is the modern name for the UK Temperance Alliance, was quoted uncritically but the Portman Group was slagged off for being industry funded. Are we really supposed to believe Chiles or any other “heavy drinker” would have moderated their intake if the labels on bottles were changed to include false information?

Finally, and inevitably, minimum unit pricing was promoted as an evidence-based measure that would reduce heavy drinking, despite the only real-world evidence showing consumption in Scotland has risen since MUP has been introduced!

Sadly, Chiles has become the Jamie Oliver of the War on Alcohol – manipulated by ideologues happy to use his celebrity status for their own ends.
Paul Chase is director of Chase Consultancy and a leading industry commentator on alcohol and health

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