Windsor and Eton Brewery Part 2 – Supply Chain Insight (and brilliant beer)

So we left you with  a question yesterday in our series following my visit to the Windsor and Eton Brewery (WEB).  What has been the main driver behind the incredible growth in small breweries in the UK? And what do you think the most critical element or component of the supply chain is for a small “craft brewer” – and increasingly for the big boys as well?

The answer to both these questions is “Hops”.

You may know that hops, along with malted barley, yeast and water are the basic ingredients of beer. But I had no idea of the revolution in hop production that has taken place over the last twenty years or so. Will Calvert of WEB started his career at Courage brewery some 30 years ago and he explained that the entire huge Courage operation at that time used just three or four varieties of hops. WEB, a tiny fraction of that scale, uses 15 varieties already for their range and Wikipedia lists 110 separate hop varieties!

Hops. What makes beer beer

Hops were seen until recently as simply adding the bitterness element to the brew, early in the process. But a boom in developing new varieties, with different flavours and aromas, has allowed  brewers to produce an ever-expanding range of ales, appealing to different tastes. Hops are also now added to the mix at different stages of the brewing process, to give further sensory options, so you will see beers that are “twice-hopped” for instance. In the case of beers such as WEB’s Treetops and Kohinoor, other flavour ingredients are also increasingly included.

This has truly turned the beer market into something seen as fashionable, innovative, and worthy of the  serious expert attention that the wine industry has enjoyed for years. Pontificating over aromas, the nose, the length of the finish and so on is no longer purely the preserve of the wine connoisseur!

But it has thrown up some new supply chain issues. The most valued and prized hops can cost 5 times or more than the standard or traditional varieties such as the English Fuggles.  The market has become global, with sought-after hops grown in the USA, Eastern Europe and Australia / New Zealand. That brings issues of supply chain management and risk - transport, currency fluctuations, natural disasters and so on.

And brewers (or their purchasing managers) have to look at options around forward commitment to  guarantee supply of scarce varieties. Calvert had bought physical stocks of some varieties months ahead to obtain what he needs in terms of key ingredients for his beers  – but that of course can bring issues of cash flow, storage and planning. We haven’t quite got to formal futures trading for hops, or counting the young flowers on the plants to predict the crops (as happens in the case of cocoa) but perhaps one day we will!

Stay tuned in part 3 when we’ll look at some of the other supply chain issues facing WEB.

Voices (4)

  1. PlanBee:

    I do so hope that this article appears in the ‘Round up from the UK’ in the US edition of Spend Matters

  2. Dan:

    A good situation if you wanted to create a purchasing consortium for micro-breweries….

    1. PlanBee:

      ….thats assuming they can organise a ‘p**s up in a brewery’!

      1. Final Furlong:

        …he caught us on the hop with that critical element question…

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