Turnover of the UK’s top 25 independent breweries has hit a record £1.72bn in the last year, an increase of 9% on the £1.57bn recorded in the previous 12 months.
However, growth in turnover for these businesses has slowed considerably following a dramatic post-Covid bounceback. Turnover jumped 44% during this period, from £1.08bn in 2021/22, to £1.57bn in 2022/23.
The figures come from accountancy group UHY Hacker Young, which includes BrewDog — which saw turnover rise 11% to £281m in the last year — in its figures.
UHY Hacker Young says UK independent brewery turnover has increased despite strong headwinds faced by the sector. This includes weak leisure spending caused by the cost-of-living crisis and breweries having to grapple with increased costs from energy prices and wages.
With insolvencies of pubs and bars companies continuing apace — rising from 727 in 2022/23 to 759 in 2023/24 — independent brewers are having to increasingly rely on sales through supermarkets or direct sales.
Smaller independent breweries will also be hit from the sharp rise in national insurance contributions arising from the autumn budget. The £25bn increase in employers’ national contributions will mean some independent breweries may consider how to manage their costs and potential for growth and development in order to keep their wage bills under control.
The Society of Independent Brewers and Associates (SIBA) has also warned that cost increases from and the national minimum wage (NMW) will hurt the brewery sector. The NMW will rise from £11.44 to £12.21 in 2025. Independent breweries may struggle to absorb these extra costs compared to their larger competitors.
Guest beers consultation
UHY Hacker Young says one initiative which could substantially improve turnover for independent breweries is the guest beers consultation announced by the government in the autumn budget. This could see more access for consumers to guest beers from smaller breweries in pubs, helping to improve their sales.
Independent breweries and many pub licensees have long complained about the restrictions imposed by large breweries over which beers pubs can purchase. Those contractual restrictions have led to large percentage of beer sales being dominated by the largest breweries.
“The success of these breweries has been driven by a bounceback in consumer demand for independent and locally-sourced goods after the Covid pandemic,” said James Simmonds, partner at UHY Hacker Young. “This has helped independent breweries to reach a record turnover, driven largely by the success of Brewdog.
“However, with interest rates remaining high, consumer spending on alcoholic drinks is expected to remain anaemic. What could change the situation radically is how seriously the government decides to take their consultation over increasing access to guest beers.”
