The evolution of the beer supply chain: from craft breweries to restaurants and bars

The evolution of the beer supply chain: from craft breweries to restaurants and bars

The beer supply chain is a complex and intricate system that involves multiple steps and processes, from sourcing raw materials to delivering the final product to consumers. In recent years, craft breweries have emerged as key players in the beer supply chain, supplying unique and high-quality beers to restaurants and bars. We thought we would set out how the beer supply chain has evolved, the rise of craft breweries, and their impact on the restaurant and bar industry.

Understanding the craft breweries supply chain

The beer supply chain encompasses various stages, starting from the sourcing of raw materials such as water, malt, hops, and yeast, to the production, packaging, and distribution of the final product. It involves multiple channel members, including growers, brewers, distributors, and retailers. The supply chain has evolved over time, and we are finding that craft brewers are increasingly keen to work with reputable transport companies who they can easily pick up the phone and contact regarding deadlines and demanding landlords.   

The role of craft breweries in the beer supply chain

Craft breweries have become increasingly prominent in the beer supply chain, offering unique and flavourful beers that cater to the changing preferences of consumers. Craft breweries prioritize quality, provenance, and traditional brewing methods, using locally-sourced ingredients and artisanal techniques. They have grown in popularity due to their ability to meet consumer demands for beers with character, taste, and flavour.

Craft breweries have also contributed to the growth of the craft beer category, which has seen a year-on-year increase of around 8.5%. IPAs and Pale Ales have emerged as leading styles in the craft beer market. Mintel research reveals that consumers expect craft beer to have a unique flavour and better quality ingredients, reinforcing the perception that craft beer is of higher quality compared to mainstream beers.

Craft breweries and the restaurant and bar industry

Restaurants and bars operate in a highly competitive environment, where originality, quality, and service are essential for success. Craft breweries can collaborate with restaurants and bars to develop a versatile beer offering that aligns with the venue’s target audience and positioning. By understanding the demographics and preferences of a specific restaurant or bar, craft breweries can create exclusive products, pricing strategies, and promotions that enhance the venue’s reputation and attract new customers.

Collaborations between craft breweries and restaurants can extend beyond beer supply, with opportunities for beer and food pairing experiences and special events. These initiatives can drive customer engagement, create memorable experiences, and differentiate the restaurant or bar from competitors. The exclusivity of craft beers and their association with local, ethical, and traditional brewing practices further enhance the appeal of these collaborations.

The growing demand for no and low-alcohol beers

In recent years, there has been a significant shift in consumer preferences towards lower-alcohol beverages. This trend is driven by a desire to reduce alcohol consumption while still enjoying flavourful drinks. The no and low-alcohol sector has seen substantial growth, with an increasing number of consumers opting for beers with an ABV of up to 1.2%. The availability of no and low-alcohol beers has expanded, with both small craft breweries and larger brewers introducing offerings in this category.

Big brewers, such as Heineken and Budweiser, have entered the no and low-alcohol market with products like Heineken 0.0% and Budweiser’s Prohibition Brew. Craft breweries have also responded to this trend by brewing beers with lower ABV, such as Brew Dog’s Nanny State and Laine Brew Company’s King Limbo. The rise of no and low-alcohol beers provides an opportunity for craft breweries to cater to health-conscious consumers and expand their customer base.

The impact of technology on the beer supply chain

Technology plays a crucial role in optimizing the beer supply chain and meeting the demands of modern consumers. Brewery software and smart technologies enable breweries to streamline their operations, improve inventory control, enhance quality control, and ensure timely delivery. These digital tools provide real-time data, allowing breweries to track production, inventory stock, sales, and raw materials efficiently.

Artificial intelligence and analytics are increasingly utilized to track and interpret relevant information, minimizing the overall cost of beer production. The Internet of Things (IoT) is also making its mark in the beer supply chain, with technologies like RFID tagging, GPS monitoring, programmable logic controllers, and sensors automating various aspects of beer production. IoT-driven solutions enhance efficiency, productivity, quality, and safety through real-time monitoring and data-driven decision-making.

Addressing challenges in the craft breweries supply chain

The beer supply chain faces various challenges that require proactive measures and strategic solutions. Climate change poses a significant threat to the availability of raw materials, such as hops and barley, due to extreme weather events and droughts. Breweries need to adapt to these challenges by exploring alternative sourcing options and implementing sustainable practices.

Brexit has also impacted the beer supply chain, with potential tariffs and trade barriers affecting the cost and availability of ingredients traded between the UK and the EU. Breweries are navigating these changes and exploring partnerships and collaborations to ensure a smooth supply chain and minimize disruptions.

Furthermore, breweries need to address consumer demands for transparency, ethical sourcing, and sustainability. Blockchain technology offers a solution by providing a decentralised platform for enhanced traceability and data collection. Consumers can trace the origin of raw ingredients, ensuring ethical standards and sustainability practices are met. Embracing blockchain technology can strengthen consumer trust and contribute to the overall reputation of breweries.

The future of the beer supply chain

Looking ahead, several trends are expected to shape the beer supply chain. Brewery software and smart technologies will continue to evolve, improving brewing processes, inventory control, quality control, and delivery. The craft beer category is projected to grow as consumers’ interest in premium and unique flavour persists although Q2 in 2023 has seen further failures in the UK pub trade.

The preference for low-alcohol beverages is likely to continue, with an increased focus on no and low-alcohol beers. Breweries will need to innovate and create more choices and better-tasting options in this segment. Supply chain challenges require breweries to remain adaptable and resilient.

The beer supply chain has witnessed significant changes in recent years, driven by the rise of craft breweries, consumer preferences for quality and flavour, and the demand for no and low-alcohol beers. Collaboration between craft breweries and the restaurant and bar industry has created unique experiences and exclusive offerings. Technology and sustainability will continue to shape the beer supply chain, with blockchain and IoT playing pivotal roles. As breweries navigate challenges and embrace innovation, the future of the beer supply chain promises exciting possibilities for both brewers and consumers.

If you are a craft brewer in East Sussex and would like to chat to us about your delivery needs, please contact us

Disclaimer: The information provided in this article is based on research and industry trends. The author does not endorse any specific breweries, products, or technologies mentioned in this article.