Good Beer Hunting

Drying Out — British Businesses Adjust to More Drinkers Cutting Booze in January

Screen Shot 2019-01-07 at 8.20.18 PM.png

More than 4 million British adults will give up drinking alcohol this month as part of the Dry January campaign. The statistic may send shivers down the spine of most breweries and pub owners. In fact any business owner still feeling bullish about future prospects should also note another important find from a YouGov poll addressing the topic: those who stop drinking are likely to drink one-third less when they return. For a country already dealing with changing views on alcohol, it potentially leaves businesses in a bind.

Dry January is run by Alcohol Change UK, a charity that educates and pushes for regulation to reduce the public’s intake of booze. Since 1984, they’ve spent £24 million ($30 million) on research into alcohol harm, and in January 2016 won a huge victory when the UK government lowered its recommended weekly intake for men to 14 units (about six pints of 4% beer).

While few would argue with the idea that moderate drinking is beneficial to a person’s health, a campaign that effectively champions boycotting breweries and pubs—many locally owned—has little support in the industry. This month, the British Beer & Pub Association, whose members produce 90% of the beer brewed in the UK as well as more than 20,000 pubs, felt compelled to question the entire notion of abstinence to support its industry.

“Research continues to show that moderate alcohol consumption carries less risk than drinking excessively or not at all,” chief executive Brigid Simmonds said.

She’s not alone is questioning the science. There are many critics of the UK’s government guidelines and Alcohol Change UK’s abstinence campaigns in the industry and the media. Most rely on the “J-curve,” evidence born out across more than 34 epidemiological studies that shows how moderate drinking reduces overall risk of mortality. Logic says the industry needs to prepare itself for a tough month, and perhaps a tough year, but on the retail side, those operating in the higher echelons of the craft beer world are conflicted.

Caps and Taps, an upmarket North London bottle shop, saw January sales drop 35% in 2018 compared to the preceding November. Co-founder Phill Palgrave-Elliott has radically changed his buying habits and opening hours for this season, closing for the first week of the year, stocking up on low-ABV products, and avoiding buying any Double IPAs.

“Craft beer is a luxury product and people are financially uncertain because of Brexit,” he says. “Then combine that with the fact many consciously drink less to be healthy in January. Footfall was already down in December, so we’re expecting January to be even worse than usual.”

For Caps and Taps it’s a perfect storm of Brexit, abstinence, and their reliance on getting people through the door. Meanwhile, Honest Brew, one of the largest online beer retailers in the UK, sees no reason to change their buying habits or marketing, claiming to experience no drop-in sales during the toughest month of the year. They make no effort to bring in low-alcohol beer, but buy them year-round if the right breweries are making them.

“There’s an element of hobbyism to craft beer that sustains buying habits year-round,” says Honest Brew founder Cormac Wall. “We regularly talk to customers in the midst of challenges such as ‘Dry January’ and, while they may not be drinking beer, they’re still buying it to ensure they don’t miss out on the latest releases.”

As the cost of living soars in the UK, many drinkers are using Dry January for both health and budgetary reasons. A study by data consultancy CGA Strategy found that sales across all alcoholic beverages fell by an average of 15.9% in January 2015, while sales of soft drinks fell by an even larger 18.4%. Clearly, non-drinkers aren’t just avoiding alcohol—they’re avoiding pubs altogether. And those who regularly enjoy non-alcoholic drinks in a pub are likely there to accompany those who are drinking. As the data shows, this has been happening for years.

From September 2017 to September 2018, 43 million pints of low and non-alcoholic beer were sold in the UK, a drop in the ocean compared to the entire market of around 7.73 billion.

Increasingly, though, craft business owners are innovating and adapting to match a shift in consumer demand. British brewers are known for their ability to make sessionable beer thanks to a history of lower-ABV cask ales. Indeed, a new wave of low or non-alcoholic beers have started cropping up. In the last few years, breweries like Nirvana, Big Drop, and Small Beer have built their businesses around them while others merely dabble.

However, most of these new “small beers” are retailing at comparable prices to their more alcoholic competitors, presumably due to economies of scale and start-up costs. For example, Small Beer’s 1% Dark Lager sells at £3.05 at south London bottle shop Hop, Burns & Black, while a 4.5% craft Lager like Magic Rock Dancing Bear is just £2.60. Meanwhile, Nirvana’s alcohol-free beers are selling around £2.50 online. If people are looking to save money, they won’t be turning to small-batch, low-ABV selections.

Take a longer-term view than Dry January, though, and there are success stories. Nirvana was founded two years ago in Leyton, East London, and solely produces non-alcoholic beer ranging from a 0% Stout to a 0.5% berry sour to the more predictable American Pale Ales. Its volumes have grown by 360% in the last year, buoyed by campaigns like Dry January and Sober October.

“Usually, a [prospective] customer has something [non-alcoholic] on that doesn’t sell well, and they put it down to it being non-alcoholic,” says Nirvana co-founder Becky Kean. “So, if we do get in the fridges, they always seem really surprised that it sells well. Maybe they realize that if it didn’t sell great, it probably didn’t taste great.”

The barrier to entry may be tough, but with Nirvana growing 360% over the last year, there’s clearly an evergreen demand from customers for lower ABVs. Affinity Brew in Bermondsey typically brews session-strength beers with several releases in 2018 weighing in below 4%, and as low as 2.7% for August, their elderflower and citrus Blonde Ale. For founder Ben Duckworth, Dry January is more of an opportunity than a threat.

“We're backing ourselves and ramping up production,” he says. “As an industry, we have a responsibility to not simply moan about Dry January and those who partake, but to take it on as a challenge and be creative. I don't really feel that many initiatives I've seen so far do this. They basically just say, ‘You should go to the pub.’”

For Duckworth, being creative means his smaller beers will feature heavily in their lineup at the start of the year but otherwise his business is well set up for the soft temperance movement that seems to be forming. Even their end-of-year Imperial Stout comes in manageable 250ml (8.5-ounce) cans, rather than the traditional bomber.

Whether these initiatives will satisfy the UK government’s demand for a light drinking culture remains to be seen. If they do, the end of Dry January would represent a win for both alcohol campaigners and the beer industry. Activists see the success of a low-ABV beer sector on public health and businesses thrive, negating the need for any abstinence campaign. One craft brewer who has made a success of a non-alcoholic beer is Bakewell’s Thornbridge. They’ve packed loads of citrus hop aroma and flavor into Big Easy and it’s proved a big seller in bottle for specialist retailers like Caps and Taps.

“We’d been thinking about brewing one for a little while,” says export manager James Buchanen. “We do our Peakender Festival and sponsor the Eroica Britannia bike race, so we have a lot of stuff to do with exercise and outdoor activity—it made sense. We’ll have to try hard to keep it in stock for Dry January, as we’ve seen a big bump in the run up to Christmas. People are driving or wanting to take it easy.”

Clearly, low- and non-alcohol beer represents an opportunity to those who can take it. A huge tax break for UK brewers on beer below 2.8% means there’s plenty of life in small beer even if its use during Dry January is limited. For this month, the best thing breweries and traders can do keep overheads as low as possible and prepare to hit the ground running come February.

Or, as Palgrave-Elliott suggests, “Just go on holiday for the whole of January.”

Words by Jonny Garrett