Inside Business: Big plans for small breweries

Drinkers could soon acquire a taste for 'handcrafted' beer, says Roger Trapp
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The Independent Online
A TIME when pub companies across the country are feeling the squeeze is not the most auspicious time to be promoting a new beer concept. But Philip Parker, who runs the Freedom Brewing Company from the back of a light industrial estate in west London, is confident that he is in on the ground floor of a new phenomenon in the British drinks business.

With premises that appear little bigger than a double garage, his company certainly qualifies for inclusion in the microbrewing category that has proved so successful in the United States in recent years.

There, the past decade has seen the market domination of four big players, including Miller and Coors, dented by the arrival of local breweries, often producing just one or two beers. With 400 brewers offering more than 1,600 brands, this sector now claims about 5 per cent of the market.

Since Britain has seen similar consolidation, Mr Parker is confident that such a performance can be repeated on this side of the Atlantic. A lifelong drinks marketing professional, he thinks that the popularity of the concept owes a lot to consumers' desire for more choice.

Just as in America the consolidation of the brewing business has brought economies of scale but hindered the ability to differentiate by product.

The microbreweries, through emphasising the "handcrafted" aspect of what they are selling - they typically combine the brewing facility with the bar in "brewpubs" - provide a contrast to that approach, claims Mr Parker.

"What we can offer is significantly more in product differentiation. Most large players don't talk much about the product because it's difficult when you are mass-producing," he says.

He is sufficiently upbeat about the future to have just acquired, for pounds 1.2m, the Soho Brewing Company.

Sited in a busy shopping area in London's Covent Garden, that operation was equipped by its previous owner with state-of-the-art equipment.

Perhaps more significantly, it is integrated with a spacious bar and restaurant area in the classic brewpub format. Though Mr Parker is anxious to make a few changes aimed at emphasising that the premises are part of a microbrewery rather than just another wine bar, he sees this as an exciting stepping stone in the development of the company that he has been running for the past 18 months.

He is currently busy combining the two companies' administration at Freedom's base in Parson's Green. But the link-up is already apparent through Freedom's highly-regarded lager - brewed using natural hops, yeast and barley in accordance with traditional rules - being sold alongside the four Soho beers.

And Freedom is not alone in blazing this trail. Freedom's founder, Alistair Hook, has gone on to set up the Mash brewpub in the West End, while the Pacific Oriental Brewing Company pub has recently opened in the City. Small breweries supplying off-licences, supermarkets and even pubs are springing up all the time.

Freedom already supplies leading supermarket chains and off-licences, such as Oddbins, and has recently struck a deal with Fuller's, the west London brewery, to make its beer the company's premium lager in its new small chain of contemporary bars known as "Fine Line".

Many will see the brewpub as just another fad in the constantly-changing face of pubs and bars, especially since their wood-and-stainless steel style is reminiscent of other ventures, such as All Bar One. But Mr Parker - who in a varied career within the drinks trade marketed Malibu and oversaw the UK launch of Labatt's Ice Beer and Rolling Rock - insists that the handcrafted beer singles out the concept he is helping to push.

"To be sustainable, it has to be genuine," he says, stressing that he is not recreating traditional pubs in the style of the well-known Firkin chain.

Convinced that the presence of vintage wines on supermarket shelves is evidence of consumers' increasing desire to move upmarket, he sees initiatives like his as playing a vital part in providing the variety and quality that the beer trade needs.