Craft is the word of the moment – whether you are talking about craft beer or spirits, but let’s not forget the impact of mainstream brands which are the mainstay of Scotland’s pub trade. Susan Young takes a look at what’s happening in the beer category.

Beer sales are finally increasing. After nearly a decade of decline last month the British Beer and Pub Association revealed that beer has recovered market share for the first time since 2006, extending its lead over wine. This increased interest in beer can be partly attributed to craft. But in my view it’s not just about the brew, but about the fact that this resurgence has been partly created because licensees have been creating great craft beer pubs and consumers have a taste for them.

All beer needs is a route to market and by opening craft beer bars licensees have been effectively providing this – they have created the opportunity for people to try a variety of beers. After all, the pub remains the best place to try out new brews. You might argue that if craft beer had not taken off there would be no craft beer pubs… but what came first?

The craft revolution started in the States in the 1980’s when a group of local brewers got together with microbrewers and started what is now recognised as a revolution in beer. This new movement challenged the likes of big brand owners like Budweiser and Miller, with the creation of brands such as Samuel Adams. Today there are more than 2,700 craft breweries in the US and this number is expected to grown to some 4,000 over the next few years. One of the pioneers of the movement was in fact an American called Jack McAuliffe, a submariner who served in Scotland, and while he was here he actually got a taste for cask ale. So Scotland did have its role to play in the craft revolution. Today brands from America vie for shelf space with beer from Germany, England as well as Scotland.

BrewDog, which started off life as a brewer, but has now grown into a fully-fledged pub co, must be due a lot of the credit. They have persuaded investors over the years to put up some £7m, and now not only brew beer in their own brewery but have BrewDog pubs all over the world.

In Scotland they have pubs in Edinburgh, Glasgow and Aberdeen. Now I know they will hate me for saying this because they eschew big mainstream brewers, but they are actually following a tried and tested route to market…Belhaven has its own pub estate, Heineken and Star Pubs and Bars, and Maclays was originally a brewer before venturing into pubs (now of course in administration). While Tennents may not have a pub estate now… they do have a share in a craft brewery, Drygate.

However despite the new trendy craft beer bars, there are still a host of pubs including the likes of Blackfriar’s and The Three Judges in Glasgow and Diggers and The Bow Bar in Edinburgh who have long championed independent brewers and served up interesting and tasty beers to a loyal fan base. In fact there are dozens of pubs all over the country who do this, but it took the boys at BrewDog to give it some cool credentials. It is a bit ironic though… in years gone back when you thought of cask beer you would think of beards and beer bellies… now when you think about craft… funnily enough beards come to mind too minus the bellies! But with lots of skinny jeans and tweed! Of course while cask was very much about sessionable ales, today craft is about artisan beers whether they be ales or lagers and they range from Czech-style pilsners to India pale ales (IPAs) and now there’s the low alcohol offering too. But what licensees are looking for is a range that sets them apart from their neighbours.

There are now more than 80 independent breweries in Scotland alone producing in excess of 300 beers, the rise has been attributed in many cases to the fact that when Gordon Brown was Chancellor of the Exchequer in 2002, he introduced Progressive Beer Duty, which gave tax breaks to brewers below a certain size as a result the number of small brewers in the UK began to grow and continues to grow. From St Andrews’s Eden Ale to Fyne Ales and Jaw Brew on the West Coast, Barneys Beer to Black Isle… the list really is endless, and it is not surprising that licensees are spoilt for choice. However according to the experts while there is some great craft beer out there, there is also some pretty dire brews too which lack taste consistency. The other issue is that some craft beers bars simply do not get the throughput to keep the beer fresh, and this is where no doubt the large suppliers win… they can keep a great range of bottled beers for enterprising licensees to choose from but also often sell cask in various sizes.

Belhaven, owned by Greene King, may be regarded as one of the big brewers but when it came to offering diversity in the beer market they were the first Scottish brewer to in fact embrace craft beer. Around 14 years ago they set up a niche brands division called 1719, (the year in which the brewery was founded) and under the guidance of Tom Cullen, and with a lovely Swedish girl Joanna Svenson as the face of the division it brought to the Scottish on trade market the likes of Peroni, Cruzcampo, Erdinger and Wiehenstephan. Says Tom Cullen, “Back then pubs in Scotland did have a limited choice mostly available from the big boys. However people were starting to travel more, and the retail market place had started to change with a number of new, young and creative operators arriving on the scene. We initially had a portfolio of 12 beers – including aspirational brands like Peroni. In fact I remember the headlines when it went on sale as Scotland’s first £5 pint. At the same time there was also a step change in the retail trade – with pub owners wanting to be one step ahead and wanting to offer their customers something different.”

Tom now works for Dunns who (following its Dameck acquisition) have more than 1,200 beers on offer. With such a lot of on offer how can licensees make a informed choice on what to stock? Says Tom, “You have to make sure you fit the beer to the venue. This means looking at the age profile of customers, the demographics and the food offering. That will dictate what the pub should offer.”

He adds, “The Glasgow and Edinburgh markets are quite different. Glasgow is still very price conscious however the most popular category is Scottish beers particularly the smaller breweries such as Cromarty, Fallen, Stewart, 6 Degrees North and Black Isle. These are followed by English beers, German and then American beers. In Edinburgh licensees are not so worried about the price, because they know they can sell it at a premium. Licensees in Edinburgh are more diverse in their choice of beers stocking more English beers, followed by American beers with Scottish beers probably in third position.”

Of course craft beers from the continent are also showing good growth rates. Alhambra is regarded as the leading craft brewery in Spain. It is at the vanguard of innovation when it comes to beer styles and modern brewing technology. As a symbol of excellence Alhambra has experienced good growth in the UK beer market over the past few years.

Italy technically speaking doesn’t have craft beers – this is because in Italy, fines are imposed on those who write ‘craft’ on the label; but of course all standard non-filtered, unpasturised beer from Italy would be considered craft and with 700 microbreweries in Italy there’s lots available. Del Borgo’s ReAle and its Trentatre Ambrata, or Morgana – are American-style beers, while you can also find Italian brewers including local ingredients to give their brews a point of difference. For instance Genova “lager” is flavoured with basil. In fact the first Italian craft beer bar has just opened in Chiswick – The Italian Job. It offers says the company a beer range which draws from Italy’s eclectic craft beer scene, and showcases a variety of styles and provenances, and is complemented by a food offer that spans from Italian street-food to hamburgers.

Says Tom Cullen, food and beer matching is important when it comes to selecting the right beers for your pub, “If you are a meat and burger operation of course you are going to offer a good selection of American beers, while if seafood is more our speciality you can have more of an ecletic offering. You should approach your beer list with the same thought and diligence you would a wine list.”

Edinburgh also leads the way when it comes to craft beer bars – FullerThomson were one of the first pub groups to embrace the concept with bars such as Holyrood 9A which offers more than 20 beers on tap, to the Red Squirrel and the new Ox 184. While in the last two years bars such as Jeremiah’s Tap Room, the Hanging Bat and Ushers have opened. In Glasgow, Munro’s and Drygate are two of the most notable alongside Inndeep, while the Tippling House and CASC has put craft in Aberdeen on the agenda, but lots of other independent bar owners have embraced craft by offering a wide selection of beers.

Belhaven has a wide range of craft beer from around the world, but it has its own craft range too which was launched last year which has a contemporary feel. Says Gordon Muir, “The craft range is selling well, with Twisted Thistle IPA and Craft Pilsner the leading sellers in Scottish on-trade. We’re delighted that we’re seeing good sales in “regular pubs” as well as specialist craft outlets, both across the packaged range and in keg.” He added, “We’re also seeing tremendous growth for these beers in craft markets overseas, notably the USA and Sweden which are both flying with our craft range, with Twisted Thistle IPA again the lead performer.”

Molson Coors have Franciscan Well craft beer and Sharp’s Brewery brand Doom Bar, and were one of the first mainstream brewers to mark really get behind craft in recent years hardly surprising when you consider the company, despite being Canadian, is one of the biggest brewers in the US. They brought Blue Moon to the market here too which was one of the first craft-style brands to appear on draught.

Heineken own the Caledonian Brewery and it has long had an excellent reputation for producing brews such as Deuchars IPA. But it’s latest offering is a lager, the first from the brewery, called Three Hop. They say it has been inspired by the lager traditions of Germany, the Czech Republic and France and it is being rolled out nationally. Says Andrew Turner, Category & Trade Marketing Director at Heineken, “Can you take a Scottish brand out of Scotland? Yes. We have already got Three Hop in 200 pubs in England and we expect that number to grow.”

However while craft creates a lot of interest and certainly stats show a massive growth rate of around 80%, you have to take into account this is from a small base and craft beer sales still account for less than 2% of current beer volumes. Sales are worth in the region of £225m according to CGA.

In Scotland, as you all know, its Tennent’s that is the biggest brand with a share of around 40% of the market.

Lawson Mountstevens, Managing Director, On-trade at Heineken told DRAM, “Scotland is quite a different market to the rest of the UK. It’s unique because of the strength of Tennent’s. Despite the fact that we are an international brewer we only have 13/14% share of the market in Scotland and that is a challenge. Obviously Scotland is one of our key markets and we are committed to putting people through the door and obviously our aspiration is to have a great share of the market moving forward.”

Molson Coors have had success in the market over the last few years, and in fact 2014 saw the company move into second position behind Tennent’s. Scottish boss Hugo Mills puts this down to forging a successful partnership with Matthew Clark and its ongoing relationship with Belhaven. He told DRAM, “To me Belhaven is best in class. They are a well-engineered business and they have faith in Carling. We now have two businesses supporting us and who are helping us take our brands to the competition.” He continues, “2015 is a significant year for Molson Coors in Scotland as we put our ambitious plans into action to grow the scale and strength of our business and brands in the Scottish trade.”

It’s also an important year for Tennent’s, now WallacesTCB, with new boss Brian Calder, confident that they too are not just pushing forward with Tennent’s but taking advantage of craft beer popularity too.

He says, “It’s been an exciting few months for WTCB. With progress being made across all areas of the business, we have a positive outlook going forward. We’ve strengthened our core beer offering with three exciting additions to the Tennent’s range – Black T, our premium offering was launched in October 2014 and is going from strength to strength. We launched low and no ABV options in the form of Lemon T and Hee-Haw!, which have also been successful since launch. Our ongoing relationship with Drygate has allowed us to become involved with craft beer, a market we haven’t engaged much with previously, which brings us closer to our ultimate goal of being a true one stop shop for the licensed trade.

“Other than ranging, we’ve been heavily involved in the debate surrounding tied pubs legislation, which we feel places real restrictions on both Scottish brands and publicans alike. Forcing tenants to buy stock at a price which is barely viable from a restricted range is hurting Scottish Pubs and simultaneously puts producers, including wonderful craft brewers, at a disadvantage, as the number of operators they can sell to is severely limited. We will continue to call for government action on this issue as we hope to bring Scottish legislation into line with that of English and Welsh systems. Once this change takes place, those operating in the Scottish market will see a positive change in their business.”

However no beer article would be complete without paying attention to low-alcohol beers and no-alcohol beers. There is a real opportunity here for licensees to provide their customers with a refreshing drink that will keep them under the new drink-driving limit. Certainly I think that generally suburban licensees have been quicker on the uptake when it comes to stocking up on these. With city centre outlets being a bit slower off the mark. Recently I was in a well known West End bar where two girls sat down and asked for a non-alcoholic beer. The bartender admitted they had none and guided the girls to two non-alcoholic cocktails instead. While an Italian restaurant close to my own office also doesn’t offer any non-alcoholic beers. However, says Tom Cullen of Dunns, “We have been inundated with people interested in stocking these beers. We currently have a range of twelve and are looking to have a draught non-alcoholic beer to offer soon.”

Some beer commentators have called it a ‘golden age’ for beers. They wouldn’t be wrong and with the Chancellor taking another 1p off the price of a pint, it looks like this trend is set to roll.