Rise and rise of the microbreweries

"Before the Brexit vote I had been looking at exporting to Europe, but now I think it will be somewhere further afield, maybe South America, India or China," he says thoughtfully.

"I'm expecting that we will have exported our first bottles of beer by the end of the year."

This will no doubt be music to the ears of Environment Secretary Andrea Leadsom, who has set a target of an extra £2.9 billion to be generated in food exports over the next five years.

But it is also symbolic of the remarkable growth which the real ale industry, and our smaller breweries in particular, have seen over the past couple of decades.

Back in 1970, when a visit to the pub meant choosing between Watney's Red Barrel, Double Diamond, or maybe Banks's or M & B if you struck lucky, there were just 140 breweries in the UK. Last year, accountancy firm UHY Hacker Young put the number at 1,692, with the growth almost exclusively down to the soaring number of small independent breweries, or microbreweries as they are commonly known.

The last decade has seen a multitude of new breweries spring up in the West Midlands, from Battlefield in Shrewsbury, Backyard in Walsall, Fownes in Dudley, and Clun Brewery in south Shropshire. Going back just a few more years, Sadler's in Lye, near Stourbridge, and Ludlow Brewing Co, have built up national profiles and their beers are now stocked by many of the big supermarkets.

Sadler's, which saw its profile grow when its brewery taphouse at Lye Cross appeared on the BBC2 series Oz and James drink for Britain, opened a new larger brewery in nearby Station Drive two years ago. And cashing in its growing reputation, the business expanded its operations to include a pub in Southampton.

Managing director Chris Sadler says: "We are very excited with this unique opportunity to expand our portfolio and we see Southampton as the first step on the way to gaining a foothold in the south of England.”

Bob Hayes' Hop & Stagger brewery, at Norton near Shifnal, is typical of this success story. Five years ago, Bob – who keeps the White Lion Inn at Bridgnorth – began producing beer on a small scale to sell to his customers.

"I had always wanted to have a brewery alongside the pub," he says.

"I waited a while until I thought the time was right for lots of reasons, mainly financial, but in the end we decided to just do it.

"I thought 'why sell someone else's beer, when we can produce our own?'"

Today the Hop & Stagger Brewery produces nearly 3,500 pints each week from a purpose built two-barrel brewery it moved into in 2015. Small beer compared to the brewing giants such as Wolverhampton-based Marston's, but a major success story nevertheless.

"We have held back the expansion to a certain extent," says Bob, who is 57.

"We didn't want to grow too quickly, I wanted more control over what we were doing."

Jack Limond, founder of Clun Brewery, has been operating at total capacity at his small brewery at the back of the White Horse pub in the town for some years now. He is hoping to get planning permission this year for an expansion that would see him increase capacity by 500 per cent.

"Once you have got that extra capacity, it doesn't cost that much more to produce five times as much, so once we have done that we can start making some profit," he says.

The growth in microbreweries has come against a backdrop of falling overall beer sales – largely at the expense of the mass-produced keg beers from the brewing giants – and declining pub numbers. According to the British Beer and Pub Association, total beer sales have fallen from 36.6 million in 1997, to 26.6 million in 2016, while the number of pubs has fallen from 60,600 in 1997, to 50,800 in 2015.

But with a ballooning number of breweries competing for a share in a shrinking market, and fewer outlets selling the products, is there not a real danger of oversupply causing the bubble to burst?

Mark Haslam, of the West Midlands branch of the Campaign for Real Ale (Camra), believes there is no reason why the rise of the microbreweries will not continue for years to come.

"People have in the past predicted it will come to an end, but time and time again these predictions have proved wrong," he says.

"I think the worst of the pub closures are now behind us. People are now opening new pubs in buildings that were previously used for other things. We are seeing micropubs opening up in former shops and other premises. I think we are going to see a lot more of that over the next few years."

Examples of this include Hail to the Ale, which opened in a former post office in Wolverhampton in 2013, and The Platform Alehouse, which opened in a former railway station building at Albrighton last year. Both have been outstanding success stories. Hail to the Ale, run by Gary and Angela Morton who also own Essington-based Morton Brewery, was voted best pub in Wolverhampton by Camra judges in 2015, and The Platform was this month voted Pub of the Season by the local Camra branch.

Mr Haslam says the reasons why small breweries have thrived are many. Some of it is down to the tax incentives created by Gordon Brown in 2002, when beer duty was halved for companies that produce less than 880,000 pints a year.

He says Camra, founded by former Express & Star journalist Michael Hardman in 1971, has also played a major role in encouraging people to try beer produced by independents.

"I think people are more aware of the smaller breweries," he says

"There is also a general recognition today of artisan things, a real feeling that local is best, and that movement has done a lot to make small breweries mainstream.

"The beer festivals, which are often attended by people who are not necessarily dyed-in-the-wool real-ale fans, also encourage people to try the different beers."

While small breweries have seen phenomenal growth over the past couple of decades, they still have a long way to catch up with their counterparts in the US. In Britain, "craft ale" – a controversial and loosely defined term, which encompasses both cask "real ales" and artisan pressurised keg beers – accounts for 8-9 per cent of total sales, compared to 21 per cent across the Atlantic, where the industry is thought to be worth £18 billion. If that is anything to go by, there is still plenty of scope for growth.

Not everybody is happy about this though. The tax incentives afforded to microbreweries has led to many of the larger mid-sized brewers complaining that they are part of a "squeezed middle."

Ian Parkinson, of Moorhouse Brewery, famous for its Black Cat mild, says the smaller breweries have a cost advantage of at least 25 per cent.

"It is an unfair playing field," he says. "Forty-five per cent of our revenue goes straight to the Excheqeur.

“We don’t have the duty benefit of the small guys or the efficiencies of the bigger ones.

"I am unaware of any other market where the Government intervenes so directly like this.”

Mr Haslam says the bigger breweries have also been fighting back, buying up some of the small independents to cash in on the market for artisan beer. For example, Wolverhampton-based Marston's, formerly Wolverhampton & Dudley Breweries, took over Witney-based Wychwood in 2002, followed by Jennings of Cockermouth in 2005 and Hampshire-based Ringwood in 2007. The giant also produces beers under licence for many long-established medium-sized brewers, such as Lancashire-based Thwaites.

However, Bob Hayes says despite the meteoric rise of the microbreweries, it would be wrong to think of it as a licence to print money. The exponential rise in the number of breweries has also made for an intensely competitive market place. And retaining a customer base can be difficult once people have tried your beer, and the initial novelty has worn off.

"We hear of a lot of breweries which start up and then disappear, so it is not for everybody," he says.

"You go into this because it is what you love doing, you don't go into it to get rich, it doesn't work like that."

Jack Limond believes there probably will come a point sooner or later when the market does become saturated, but believes there is still plenty of room for it to grow over the coming years.

"I think the fact that all the big breweries are now mimicking the little boys by trying to produce craft ales shows the long-time viability of the market," he says.

"I'm sure if the demand wasn't there, they would be focusing on their core products."