8 alternative ways to increase your brewery sales and profitability

Back in March, our London advisor Susanne Currid was invited to speak about developing a diversified brewery sales strategy at the SIBA’s Beer X event in Liverpool.   For those who couldn’t attend or who are interested in revisiting the key points she covered, here’s a recap of the presentation.

(In this article, we make a presumption that SIBA members are generally representative of the industry and that therefore statistics of SIBA members are those of the industry. This article uses data from SIBA 2017 Members survey published in March 2018)

According to the British Beer & Pub Association

  • Back in 1980, 12% of all beer was sold through the Off-Trade
  • In 2016, 51%+ of total beer sold was through the Off-Trade, principally through supermarkets.   

Off the back of this statistic, it is clear that we are witnessing a huge shift in the way beer is being sold and where it is consumed.

However, to date, SIBA members have been slow to reflect this trend in the way they sell beer.  According to the recent figures, only 17.6% of SIBA member’s beer is sold as Small Pack.  Even when you break that number down and look at the largest SIBA members, Small Pack makes up only 32.3% of total production. It is fair to surmise that traditional On Trade sales still predominate for SIBA members.  

Ultimately, there is imbalance between where SIBA members are selling their beer and where growth is actually happening.

From our experience working with independent brewers at The Business of Drinks, we’ve seen that a Diversified Sales Strategy can help increase both sales and profitability over time.

The main benefits include:

•       Managing risks by selling to broader range of channels  

•       Cash flow control – breaking down spend to more manageable chunks over time

•       Increasing profit margins with Value Added products

•       Increasing brand awareness

•       Sweating your assets

To follow, I’ve highlighted a variety of channels a growing brewery should be considering as alternative routes to generating sales.


Third Space

Tap Rooms, festivals, music venues, sports arenas – these type of spaces are continuously growing in popularity especially with younger drinkers who like buying into ‘experiences’

33% of respondents to SIBA’s annual membership survey indicated that they have a taproom, and reported that this was an important revenue stream for them.  42% of survey recipients say shops/tap rooms or visitors centres generate up to 10% of their revenue and 9% report generating over 25%.  The rise in popularity of taprooms has resulted in numerous breweries opting to open their own sites, giving them control over quality while delivering the freshest beer at lower prices for consumers. 

Speaking to craft brewers, it’s easy to see that the ones that have really invested in Tap Rooms are doing better and tend to be more profitable.  Look at the recent success of HopStuff raising nearly £800k for a new string of Tap Rooms and The Wild Beer Co’s plans to build an impressive new visitors centre and tap room in Somerset.  Cloudwater is also following a new trend for craft brewers to open Tap Rooms in other cities..  Their beer will be transported directly after brewing, offering fresh brews on tap to craft beer lovers within 24 hours.

In the USA, 17% of craft beer purchases are made in Third Space Channels such as Tap Rooms, festivals and sports venues. And when you consider younger drinkers, 23% of Millennial's craft beer purchases are made in these spaces .  

This trend to having your own “Tap Room or site” is sure to expand here in the UK as interest in Craft Beer increases.


The SIBA Members Survey indicates that members are looking to double the amount of beer to be canned (from 1.4% to 2.7% of production in 2018).  However, looking at recent sales figures, I would suggest this growth prediction may not keep pace with the potential demand.

According to Neilsen, craft beer cans made up 25% of craft beer sold in UK in Off-Licenses and multiple grocers (mid way through 2017).  That was a 327% increase on the previous period.  From the SIBA Members Survey, I find it interesting to see that as the size of the brewery increases, in general more of the output is being sold in cans..  The larger more dynamic breweries have done their homework and realise it’s a crucial growth driver.  So if you’re small and want to grow, you’d be highly advised to consider doing the same.  Having a canned beer product opens up routes to sale that are further afield, both in the UK and internationally.   They sell well in Third Channel venues and the Off-Trade.  Cans also have a longer shelf-life, minimise UV light exposure and help to improve quality, which keeps your beer in sales circulation for longer.  They also provide you with an opportunity to build your brand recognition if you apply good design to your packaging.

Caning costs, when using third parties are high and impact the gross margin, but if you are prepared to think long term, it could be well worth you while investing in a small or medium sized canning line. Once you take it in-house, you could get your costs down substantially, even if you end up spending two or three years paying for the equipment in the longer term, you’ll be much more profitable as you don’t lose so much of your profit to 3rd parties. 

Canning is a trend that is highly unlikely to go away, so the wise will invest now for the future.


Product Range Development

If you’re mostly selling what your competitors are selling, then you may be missing a trick.   For example, in the USA recent research indicates that there has been a 1% growth of beer as a category versus a 5% growth of low ABV beers.

Did you know that low alcohol beer is experiencing a repositioning?  It’s not just what careful drivers choose!  It’s now being offered as an alternative to other non-alcoholic drinks as a great tasting, refreshing drink.  Perhaps after you’ve been to the gym or as a lunchtime drink.  It’s becoming more of a lifestyle choice owing to the great flavour profiles that craft beer is becoming known for.

A diversified product range can also include gluten free, vegan, Higher ABV and specialist beer styles that are offering something a little different to your competitors.   For example, Buxtons X Omnipollo’s ice cream beers were an enormous success as they really stood out visually from other beers.  They had great branding and fantastic flavour options.

Product range diversification is essential to establish credentials and can also improve your gross margins


According to the SIBA Members Survey, only 2.52% of production went to Restaurants and 1.63% went to Hotels.  I know that there are some larger craft brewers such as Meantime who have gone all out to dominate in this market place which has made it harder for many smaller players to get a foothold.  Hospitality craft beer lists also tend to be shorter. 

However, people are eating out more and going to ‘drinking only’ establishments less, so another sales route is to follow your customer to these new venues.

It’s true people tend to drink less volume when the eat out, but this volume only diminishes by about 15% for craft beer drinkers from USA research I’ve seen. 

According to Scott Elliott, senior VP at Nielsen CGA, when sales are moved from a drinking outlet to a dining one, the volume lost tends to be about 60% for domestic beer and 30% for imported beer.  But they report only a 15% decrease in volume of craft beer drunk when moving from a ‘drinking only’ to a hospitality venue.

Simultaneously, we’re seeing the rise and rise of disruptive players such as Deliveroo, JustEat and UberEats delivering restaurant-standard food and drink to people’s homes.  And these take-out menus are increasingly including Craft Beer.  Or customers are ordering beers separately online to eat with their premium Take Out.

According to a CGA report, Millennials are showing strong preference for ‘premiumised’ food and drink offers.  They are prepared to pay more and spend more.  54% of 18 to 34 year-olds choose, or are likely to choose, a high-quality drink (CGA Report) in sharp contrast to 35% of +55 year olds (CGA Report)

Considering all these statistics, craft brewers are well placed to sell more beer via hospitality channels, especially where demand is higher from Millienial consumers.

Online Sales

US research from The Harris Poll (2017) indicates that beer accounts for 29% of online alcohol sales.  UK consumers are also reported to be three times more likely to buy alcohol online than the global average.  We actually lead the European market in online alcohol sales.

Amazon UK is becoming a more popular route to market as well as the more established online specialist retailers such as EeBria, Honest Brew, Beer Hawk etc.

There’s a growing demand, so there is a chance to sell directly to customers via Amazon for example.  However, you need to be prepared to sell at Trade price to customers.  Strong branding is also required to help you stand out from the competition.  (for more about selling online check out our interviews with EeBria and Honest Brew)

From beer sales via Take Out delivery apps to Off-Trade sales via specialist platforms, Amazon and supermarkets, it’s clear that online can offer increasing sales opportunities for many craft brewers.

Wholesalers / Distributors

The volume’s sold by SIBA members are quite low (less than 10% for regional and national wholesalers combined).  I know smaller brewers often shy away from this channel as they don’t like the thought of that extra cut going to a third party and you are handing over control on how well it’s sold and to who.

However,  if you are small and you can’t immediately commit to a full time or part time sales person, a wholesaler can fill the gap and give you flexibility to sell extra as and when you need to.  For example, we suggest a stepped approach where you use wholesalers to help you sell excess and as you get more money in on a regular basis and are confident you can meet the sales volume, then is the time to invest in your own sales resource.  It can also help you sell to other parts of the country and even abroad which you need to also do more of as you grow.

Wholesalers and Distributors should be part of a total Sales strategy.


If the UK market flatlines because of a bad turn on Brexit for example.  What do you do?    If you can find a European market or another market you can also sell to when times are hard, you could help alleviate the local market issues somewhat. 

Obviously, you need to do plenty of ground work to make this sales channel work well.  Check out our recent blog on exporting beer for more advice on this option.

Asset Rental

Have you got kit that you can rent out to other brewers?  This is another opportunity to further sweat your assets and keep your overall brewery profitability higher.

Have you got a bottling or canning line lying idle part of the time.  Do you have extra space in your van or your warehouse that you could rent to others, or part exchange for some other service?   It takes resource management, and you need to find reliable 3rd parties to rent to who won’t have a negative impact on your own schedules or production requirements.  However, it can still provide impactful additional revenue that can continue to drive up your profitability.

Your own “Diversified Sales Strategy” does not need to include ALL of these 8. However it should include some of the newer channels that are growing in popularity.  Simply sticking to the On Trade by itself will make growth more challenging.

If you need advice deciding on the best sales channels for your business, please get in touch and we'll be happy to explain how we can help you make a more informed decision.