Ep 37 - Is Craft Beer Doomed? - Luca Lorenzoni - PATH

Is Craft Beer Doomed? ☠️

Is it f*%k. 

I'm sure, like most, you are sick to death of the relentless doom and gloom surrounding the craft beer industry.

"It's too saturated"

"Brewery closures LEAP 49%"

"Cost of living means people are spending less"

In this episode I sit down with the iconic Luca Lorenzoni to discuss exactly why these tpyes of headlines are absolutely wrong.

Luca's experience of delivering consistent craft brewery growth over a long successful career, speaks for itself.

My favourite topics Luca discussed

•⁠  ⁠The real state of the Craft Beer Industry right now
•⁠  ⁠The strategies breweries can use to grow their business
•⁠  ⁠The breweries that are nailing it right now and why
•⁠  ⁠What style of brewery he would open if he had to right now
•⁠  ⁠Why 'craft beer is over saturated' is absolutely not important 
•⁠  ⁠Why on-trade is actually really positive for craft beer 
•⁠  ⁠His thoughts on craft beer vs indie beer

I had so much fun doing this episode with Luca, especially as we are both so passionate about what we do. 

Check it out and let me know your thoughts!

0:00 Introduction and Episode Overview
01:56 Sponsor Message and Upcoming Events
03:41 Interview Begins: Luca's Background
07:34 Craft Beer Market Insights
14:45 Impact of COVID and Global Events
17:32 Optimism and Future Trends
23:27 Efficiency in Brewing
38:51 Does Sustainability Sell?
43:05 Luca's Ideal Brewery Business Model
44:04 The Pizza and Beer Concept
48:07 Trendsetters in the UK Brewing Scene
52:39 Dispelling the Doom and Gloom
59:17 The Evolution of the On-Trade
01:05:43 Key Takeaways and Final Thoughts

A huge shout out to our sponsors again, Clean Earth Energy - Power your business with clean, abundant, affordable energy.
https://cleanearthenergy.com/

Luca’s LinkedIn - https://www.linkedin.com/in/lucarlorenzoni/
Luca’s Email - Luca120512@gmail.com
Chris’ LinkedIn - https://www.linkedin.com/in/chris-lewington/ 

Transcript

0:13

Hello everyone and welcome to the latest episode of the Modern Brewer Podcast with me, your host, Chris Lewington. We're back. We ended 2024 with my top five takeaways from the first full year of the Modern Brewer podcast. And we started my predictions for 2025. And now we're going to continue with a more Classic Modern Brewer podcast episode style and this week's episode is going to be an absolute banger. For those of you who managed to catch the three part article series in the Brewer's Journal last year entitled The Future of Craft Beer will understand the pedigree of today's guest. If you didn't manage to don't despair as we are going to go into even more detail On today's episode, today's guest is of course, Luca Lorenzoni, ex MD of Camden Town Brewery and former CEO of Northern Monk during that epic growth phase, Luca now spends his time with the consultancy path. Helping the industry's most impressive breweries grow in today's changing market. And that is exactly what we will be talking about today. Since joining the industry 11 years ago, I have never heard such misery surrounding what still to me is a richly rewarding and fun industry. There is of course good reason for this, but what me and Luca are going to be discussing is, is it really that bad? whilst today we're not focusing on a specific production topic, understanding the market we operate in, how to navigate and excel in it is absolutely essential for any modern brewer. Before we get into today's episode though, a word from the very people who helped this show continue to grow. I've only ever heard good things about Clean Earth Energy. So I'm excited to welcome them as sponsors of this episode. They've been in the renewable energy game for over a decade, working with breweries like Verdant Brewing, Ludlow Brewing, and friends of the podcast, Wiper and True. I've actually worked with Clean Earth Energy personally. Ed and their team are second to none with such detailed support all the way through to installation. Commissioning and beyond. They design solar energy systems that suit your exact business needs Saving breweries thousands of pounds a year on energy costs and cutting carbon emissions way down I've seen them work with so many breweries up and down the UK and they're doing great stuff for the industry So, please check them out here at clean earth energy com and before we get into the episode for my UK listeners a short message Beer X is coming up quick The 19th and 20th of March. And I have some exciting news. I'll be co hosting an after party at Love Lane Brewery with friends of the podcast, Numatech and Murphy and Sons. There'll of course be beer, food, and some great chats about sustainability. We're fairly limited on space. And because I would hand out probably 500 tickets, Murphy's are rightfully in control of them. If you want to come down and chat. Sustainability. Case and beers have been made with generated nitrogen from Pneuma Tech and probably have even more free merch shoved in your face. Email your Murphy's rep and ask for some tickets. Okay, listeners, let's do this. Welcome to the show, Luca Lorenzoni. Hello. Thanks for having me. Hey man. Yeah. Look, I really appreciate you coming on Luca. I know you've got a busy schedule now with the different sort of work life balance that you had before, but it's really, really, really appreciate you coming on the show and giving the listeners sort of the insight into the craft beer industry from a big strategic level, because it's something I'm really, really interested in and I really can't wait to hear everything. Absolutely. Well, no, thanks for having me again. I think like, uh, as you know, we've chatted many times over the last year and, uh, love what you do. and it's been good to get you involved with some of the business sides that I work in as well, work with as well. So, uh, so yeah, man, it's only natural that we do this next step, right? Sure. a list of the people I want to have on the show, uh, this year, and like, when I had your name, I was like, oh wait, I know Lucas so well, I'll just message him. That shouldn't be a challenge at all, and it was really appreciate you finding the time, and it's really cool we get to talk about a subject that I think we both feel quite Passionately about, talking about, you know, not just the industry, but maybe that this doom and gloom that surrounds it right now and why that might not necessarily be, uh, the right attitude to have towards it. but before we dive too deep into that, uh, could you, for the people who might not know who you are, Luca, just give a bit of background about, you know, who you are and kind of what drew you into the craft beer industry in the first place. I'll probably, I'll try and keep this quite short because I feel like, I've done, I've done recently did the podcast with like track as well, and it was quite a lot of focus on who I am. so, but you know, at the end of the day, I, I'm, I most recently was the, was the CEO of, of Northern Monk previous to that Camden Town Brewery and previous to that, about 10 years within, Uh, AB InBev so the, the, the, the bad guys that, uh, the biggest brewery in the world, if you will, uh, so, so, yeah, so I think, I, I've been in beer for, you know, 15, 16 years, that kind of thing, uh, even more now, actually, but, but the, uh. The impetus for for craft beer was I was always interested, obviously, in beer overall back 16 years ago, whatever it was when I was in Canada, getting into it, uh, into beer, there was actually where I lived in Canada, very little craft beer. so, but I was already quite interested and I actually wrote a business plan for, for, for opening a brewery in 2008 in Canada, which, which never happens. but, uh, but. After many years working for the big guys and learning a lot, but also not feeling fully, uh, like it represented the values and what I wanted to focus on within my work career. Um, I. I angled my way, actually left in Bev, uh, and then a couple of months after leaving, got connected into Jasper who founded, uh, Camden town brewery, who was at that time, I'd just been purchased by InBev, but so I kind of half went back into there, but obviously starting to make my way more into the craft beer side of things, it's quite autonomous from the big business, at least for the, for the start. And then, you know, further after that into Northern Monk, which, which, you know, when I started another monk was about 12, 000 hectoliters. So still, you know, not, not small, but, but a lot smaller than it is today. That's for sure. and so, yeah, so big fan of craft beer. and now what I do is I work with, uh, businesses predominantly, I call them challenger brands, but, you know, people that are, uh, challenging the, the, the incumbents, uh, or the category as it is today. So, you know, most craft beers, uh, Craft Breweries would fit in that space. I now work with like, likes of Vault City, Caravan Coffee is another one. there's a few other breweries that I just started working with, uh, for the sake of having not agreed with them, whether I'd say if I'm working with them or not, I won't say their names. But, uh, but Yeah, um, that kind of thing. Palm Projects, which was started by Ben Branson, who founded Seedlip, so a non alcohol kind of incubator. I worked with them, uh, last year. We Are Beer, uh, so all that kind of stuff. Um, generally my motto is, is work with good people, doing good things, have fun with what you're doing. that kind of thing. that's awesome. Do you feel like there is, do you feel like the craft beer market is super unique? Because you say you work with like, you know, maybe the coffee industry and maybe non alc, but I guess that's pretty similar. But do you find that it's really unique, craft beer industry? Because I feel like the people who are in it, like me, I always think that it is so unique. But is it really that unique? not really. I think like, I think, um, it's a good question. I think, you know, the one thing is, the reason I say not really is because What it really is, is you're talking about, I always talk, I always start with the consumer. So if you start with the consumer, what you're talking about is like, you're talking about a craft consumer, forget beer for a second, a craft consumer, someone who values, who's willing to pay more for something because There's some elements of that product that is elevated, right? So whether that's quality, whether that's brand aesthetics, uh, they collabourate with artists or like whatever it might be, right? But that's like craft is obviously a very loose term, but that's kind of how I would, how I would bucket it. So if someone is willing to pay more for something because it gives them more than, than the standard option, right? Uh, so in that way, that consumer exists. In many categories, and in fact, the craft beer consumer is oftentimes the craft coffee consumer and and last year to put to show, you know, how, how, how much so like, uh, when, uh, Greg, we are beer when they did that, uh, consumer report in 2000. But last year's one, I was working with caravan. I, we used it, we used it for coffee. and said like, look, this is literally, you know, like, and of course, you know, some tweaks and stuff, uh, demographics are slightly different, but, but that craft consumer exists. So I think like the short answer is no, it exists in, in nowadays in almost every category. And that's like, where all these smaller, you know, uh, newer brands are popping up because they're actually, they're delivering that. But I do think craft beer was. One of the first categories to really, to really boom in that way. So I think if you would have asked that question, you know, if you think craft beer in the UK is 25 years old this year, right? Um, depending on how you define it. So like, uh, I'm, I'm defining meantime, 1999. uh, you know, if you would have asked that question 10, 15 years ago, the answer would have been yes. If you ask it now, it's probably no, but it's one of the first to, to, to, to really kind of crack into that. Hmm. Yeah. Really interesting. Uh, and do you know, I saw recently though, only like 2005, there was only like 500 breweries in the UK to give an idea of just how much it's grown. And it is crazy. Right. but you know, maybe where we are, I feel like maybe we're slightly unique at the moment is the brewing industry has such a strong narrative around like this doom and gloom what's going on right now, the state of the industry. I read all of these headlines everywhere. And like, why do you think that is happening in the brewing industry right now? oh a good question. Why is it happening? I haven't really thought of it from that angle. I'm more so think of it in the angle of like, that's a load of shit. Let's move on. But, um, why, why is it happening is a good question. I think like, again, maybe there's an element of because it was one of the earlier craft. you know, everything's in a life cycle, right? So, so it's going to happen to non alcohol. It's going to happen to whatever you name it. it's going to happen to everyone, but maybe being one of the first ones, it's like, okay, well, this craft thing booms and all of a sudden, no, it's not as big as everyone thought it was going to be. It's probably an element of that. there's, I think, you know, there's, there's always the, the, everyone likes to, uh, Everyone likes to kind of, the contrasts and things. So, you know, everyone was, everything was like, so rosy and stuff. And the second it's not, it's like, well, that's news. Let's talk about it because it's the, it's, it's, you know, it's, it's the opposite of what people were saying for so long. So that's going to create friction and contrast. And that's what gets people's attention. So there's probably a little bit of that. but yeah, I'm not, I'm not really, I'm not really sure, but I'm sure it's a combination of, I guess the other thing too, and I mean this is, this is a lot, a lot of it comes down to, and this is, you know, one of the things I focused on even a couple of years ago when I wrote those, articles on the future of craft beer, but like the, the way it's really easy to talk about something in a negative way when you compare it to the, what it used to be, right? because if the future was perfect, or sorry, if the past was perfect, the future is not gonna be perfect, right? That you're not perfect anymore, right? Right. if you are someone who runs a hundred meters in 30 seconds and you do it in 25, you know, great. Keep going. If you're, if you're someone who's, uh, who's who's did it in 10 and you're doing it in 25, you know, then so it's, it's all like perspective, which is, which is what I mean, we'll come on to, I think some other examples of that, but, but yeah, I think that's a major element of it too. Yep, Yeah, I agree is that where your benchmark is set, isn't it? And you know, 2016, 2017, it was really was the heyday of, of a very growth intensive market. Um, and it's just not that growth intensive anymore. So yeah, I see that. I see that very similarly. So how do you see the current state of the brewing industry? how do I say? I mean, like normal, normal, right? Like, I think, I think, what the past wasn't, I guess the word normal is a bit weird, but, the past was, um, was not, Sustainable, right? I think that's maybe the better way to say it as opposed to normal. But like, you know, there is there are some people that took a risk quite early on built a category that obviously there was something there that that was, you know, people wanted wanted and people and and some founders and and. Brewers and marketing people, all the, all the likes, like, you know, really, really crack that code at some point and, and made it happen. And, but, you know, like that idea that there's a lot of openings, virtually no closings, everything's rosy, lots of profitability, cash, coming in from every which angle, breweries being bought, like, that's, that's not sustainable, right? That's a phase of life. It's a slice of life. Like. And so I think, you know, where we are now is, is it's a different part of that life cycle, which is, which is where most categories are. It's like, you got to crack on with where, with how things are. and I guess, you know, one of the things that I would come on to, but like, you know, where things are is good. Right. it's just not what it was. Um, so yeah, so it's, it's, it's, uh, it's, I think that's like a bit, it's frame of reference is so important to everything. and I think, you know, if you, if you zoom out on things, It's not, it's not bad. It's, it's, it's just, this is the reality of what it is today. And I think one of the, one of the very, like, I guess, practical ways to, to, to, to bring that to life is like, if you talk to breweries that opened. In 2020, or after you often get a very different perspective than if you talk to breweries that open before 2020, just because they saw things differently, right? Like, and, and, um, and they built their businesses slightly differently because that's the way things were going and, and, and now for those businesses, the ones that, you know, that aren't really strong at some key things. Yeah, they're struggling because of that for the ones that are younger, they're built, they built their business in this new reality. So it's not bad. It's just a new reality that that some people are a lot of people are thriving and quite frankly, Yeah. Do you feel that maybe those breweries who went through the previous, I mean, everyone still references COVID pretty, pretty extensively in, in every bit of news I've read that has negative still the word COVID is used. Do you feel that that is that big of a hangover is still happening to a lot of places who took on a lot of debt, for example, or. I think, yeah, with COVID, I think the debt was the issue. a lot of people took on debt. That was really cheap at the time. it doesn't, you know, that obviously, but it's debt has to be paid at some point. Um, I think there's that. I think, you know, like, if you take, you know, for my example, you know, we, we, we, we at Northern Monk, for instance, we agreed with Tesco. In September 2019, to launch, to launch into Tesco, which went live in April, 2020, um, which was literally two weeks after, uh, after the country shut down, the volumes we were doing through Tesco at the time was like three times what they, what we've, what was the plan, the agreed plan with them. So, I mean, like everything went, you know, we were, we were before, COVID. Hit we are like literally a week away from signing the lease on a brew pub in in in Shoreditch. and, uh, and everything changed on the spot was like, let's take that money. That money has to go into the brewery because we need, uh, we need more capacity to, you know, we can't let, we can't let our supplier, excuse me, our, our, uh, customers down and so like, you know, the business plan changed. So I think COVID, you know, COVID, yeah, there is an impact, but, but honestly, I, I, I think the, the war, the war in, in, in Ukraine was, was just as much, if not even more of an sustained impact for what we're feeling today than COVID was, just because, you know, when it comes to like the cost of things, the, the, the cost of living, Inflation, all that kind of stuff that happened on the back of that, that's probably the things that, that, that I think hurt the industry quite a lot and including cash into the, you know, like capital for trying to get capital from places like once inflation went up and all those kinds of things like labour costs are going up, which is, which is really, really difficult for an industry doesn't have huge margins. I think that's probably the bigger sustained impact, but yeah, I mean, it's hard to separate those two things because they kind of, you know, one led into another, Yeah. Yeah. It was a bit of a back to back wasn't it? For a lot of places, which I mean, I can understand why breweries would struggle with that, especially if you were to take on debt expecting the market to to resume where it was and then it hasn't and then you know, then the cost of energy except it. Although yeah, I probably get into I do believe the cost of energy is obviously a problem, but Directly, you can also just reduce what you consume, but we can get into that, uh, a little bit later on. So talking about maybe more of the optimistic side, like, do you have any data or trends that challenge the sort of narrative of a declining craft beer industry? but I think like, as I said, I think it's frame of reference is so important. So, I mean, with that kind of thing, I just, I would just keep it simple and like really start at the beginning, right? Like that for me, the on trade market for, for beer and cider. So total beer and cider just on trade is 13. 5 billion, right? You combine the off trade. I mean, depending on sources, cause again, that is. To a degree up for interpretation, uh, is, uh, you know, call it 25 to 30 billion in the UK, right? That's frigging huge. Right? so at the end of the day, when you start, when you're in a, in a, in a business or start a business, whatever it is, the first thing is like, is your first risk. The first thing is you want to build something. Will someone buy it? Is there a market for this? And it's like in beer and yes, there is a market, right? There's a huge, huge market. Yeah. that's a major tech, right? I think like, you, you can't lose sight of the fact that the beer industry is massive. And so being able to work in an industry and be in an industry that is massive, is, is a good place to start. Right? Um, I think like, uh, if you look at craft, obviously craft is on the on trade. I think it's about 8 percent in the off trade. It's about three and a half percent of the market. So it's not huge, but at the same time, you combine those percentages. 1. 5 billion just for craft, right? Put that in perspective, like the peanut butter market in the UK. Have a guess. How big is the peanut butter market? 56 question. The peanut butter market in the UK, uh, 500 million. kombucha Oh, that'll be tiny, eh? bigger. It's bigger than peanut butter. what is it? Not by much, but 75 million. So, like, I mean, just to put in perspective, right? Like, it's a big market, right? Now, there's, there's a lot of people in it, but, but forget about the people that are in it for a second. The first thing is, is there a market? Yes, there's a market. Now, you just have to be really good in that market, right? I mean, like, okay, telecom telecom is 130. 6 billion, but it sucks, right? Who wants to work in telecom? Right. So like, where are you going to find a market? That's exciting. That's fine. That people are passionate about that literally is like a community. You can connect with people and it's huge. Right. so yeah, let's start there. Right. The second one is, you know, and this one again, data is, is data. and, uh, but, you know, like, uh, there's a lot of talk about growth and, you know, not growth within craft. But ultimately, if you take, like, uh, I looked at like global data as the source here, but in 2023, they released, it was the. So what they do is they use a three year volume kegger, which is basically the trend over three years, um, for volume, not, not, not spend. So, so volume within craft, the three year trend as of last year was in growth for the first time since pre COVID, right? So 2. 3%. Value. So how much people spend will be a little bit above that. So let's say it's four to 5 percent for value. So if I come to. And I say, look, I've got this market, forget, you don't know what it is. And I go, look, it's, it's big, it's 1. 5 billion and it's growing about 5 percent per year. What would you say? you'd Like, Yeah, okay, cool. Right. Like, like, as long as you're confident that you can nail what, what, what that market is, then like, yeah, like a hundred percent, let's do it. Right. and I think that's like, that's the first that's, you know, to keep it simple in this like optimism thing, I'm not trying to blow smoke here. It's like, Those are just like the straight facts. It's a big market. It's not, you know, it's slightly growing, at a market level, right? Obviously, there's people within that market doing a lot better than others, and there's people doing worse. But at the end of the day, it's a big market with a With some growth, right? That's pretty good. it's excellent, really. What sort of, so, you know, keeping on the theme of, of kind of reasons for optimism here, like, what sort of broader trends? Do you see that benefit that can or are currently benefiting the craft Beer industry now and potentially in the next few years? well, I think the main one that comes to mind as you say that is premiumization. so one of the things that's going on is people are drinking less, but they're willing to spend more on what they drink. So you see that because, for instance, in beer and cider, overall volume is going down. Value is going up. So people are spending more, but they're, but they're, drinking less. And obviously we know all the stats around moderation, non alcohol and stuff play into that as well. But ultimately people are drinking less and they're treating themselves more when they do drink. Uh, that is the perfect trend for craft beer, right? Cause what, like it, what the only thing is that you want that treat to be craft beer, not I don't know, uh, Estrella, you know, because for some people, Estrella is the, is the treat. Uh, I'm obviously not that person, which is why I'm a hard time recalling the brands that would fit in there. And I live in Italy now. So like, for instance, Menabreo, which is like, you know, an independent family brewery. you know, a step above a Peroni, which is kind of like the, the fosters of Italy. Right. so, uh, so yeah, like you, people are going to treat themselves more. So we want, you know, that's great. Right. That's a really, really good trend. that will fuel craft. Beer for, I think, for, for a very long time, where it's going to hurt more is, is, is, is to the bigger breweries. know what the bigger breweries are going to do about that? They're, they're going to try and premiumize the beers they have. They're going to raise price. But as they do that, the hope would be that. The difference in price between a Budweiser and a Faith, for instance, becomes smaller and smaller, and therefore you're going to see more people making that leap. So, so that's a good trend. what other trends? I mean, one of the other trends within craft beer, On the, on the, on the production side is like, because it has to, like people are finding ways to become more efficient and suppliers are realizing, that they need to, they need to, to, to bring ways for people to become more efficient. So, like, the perfect example of this is CO2 recovery, which obviously you'll have a million more, uh, more knowledge about than I will. But, but, you know, for instance, pre, pre war Ukraine. Like, good luck. Right? What you're going to get a camera, the name of the company and out of there's 22 companies, one in Europe, one in the US that we're doing big systems. They're like a million pounds, that kind of thing. And then, like, out of nowhere, you have, uh, what are the Danish folks? What are they called? Dalin. Thank you. Uh, and then there's one in India now as well that does quite a lot. High. Hyper. Yeah. so so like, you know, I don't know where you get these, these folks coming out that are building these systems that are like half the cost, maybe even less, right? Like, uh, and so like the reality is there, there are solutions to problems, that the industry has. But the reason why the solutions aren't necessarily ready yet is because they haven't been a problem before. Right. And so Mm-hmm a lot of. The problems that that, uh, that that have come up in the last couple of years, we're still solving some of those things. but those solutions will continue to come right? And so being more efficient, whether that's with with ingredients, you know, uh, you know, new, new, like, hop varieties or hop products is maybe a better way to say it, you know, whatever it might be like, you know, we, we, we, if you use like a hop cannons, things like that, if those can become more efficient in cost, for instance, you can use those in like from exit from, from my experience, like you can get like 20 to 30%. So you can either by, by putting the same amount of hops as you had before, you're going to get it. 20 to 30 percent more extraction, or you can reduce the hops for 23 percent and keep your, keep your base, your, your, your, your taste profile equal to where it is now. Right. So those kinds of things like we can make your product better or more efficient. So it's like all that kind of stuff is going to continue to happen within craft beer. Cause it has to, right. yeah, I don't know. There's probably a boatload more man, but those are the two to come to mind. yeah, it's definitely a lot to be done on efficiency. I see it obviously with what I do. I see it almost daily and there was definitely, you know, I didn't go back to my career as well. I was definitely not working in the most efficient brewery at all. It was entirely about growth. It was about how much more volume can we make? However, we can almost get there. And there was a lot of that going around. I always say that I feel that right at the very start of the craft beer movement, when it got really like big, it was very much like us versus them. And our quality of our product is the most important thing at all of the costs. And we will never look to be more efficient because. That's what the big brewers do. You know, they make, they cut corners, they make their beer in a lower quality, that narrative got almost so dangerous that people were just being ludicrously inefficient and actually just like using too much to make something that doesn't affect the quality at all. And that's changed a lot over the last few years. Uh, mainly because of what you talked about with the huge shock in the energy markets, the CO2 market made all of this like, okay, now I need to actually look at this and actually everyone's product qualities got better if, if not, you know, stayed the same, if not got better. So, there's lots of, there's been a big change in that. And so I think efficiency is like a really, really important keyword for, for the industry moving forward. I mean, Obviously, I always look at it from the production standpoint, but yeah, I see that as like one of the biggest trends that is going to be. I saw a lot of it last year, of course, but I'm going to think we're going to see a lot more of it next year. I really like the idea of you said, well, the notion that a lot of suppliers are helping brewers out with this as well. Yeah. And, and you know, I remember like a couple of years ago is having this conversation with With a couple of suppliers that I was working with and it's like, and we were challenging them. We were like, look, like you guys got to bring, help us bring some solutions to this stuff. Because like, if you do, you're going to have a huge market, but like, you know, they're there. The one thing is there's another trend. That's maybe not so optimistic, which I hate to throw into the optimism part of the conversation, but, but like, you know, one of the things is. If you look at what's happening overall in drinks, there's a, there's the categories of drinks are blending much more, more than ever before. Right? So it used to be very much like alcohol, non alcohol sodas. And like, nowadays, it's like, everything's kind of becoming one, is, which is good. That's like the way consumers think. Right? so, but the, the issue with that is if you look at the different types of drinks, if you look at like a soda, a water, versus, A beer, for instance, a beer is incredibly inefficient to make compared to those things, right? If you look at the process, I need X amount of weeks. I need to do this. Like, and I'm not saying like that in many respects is a good thing. It's what it's, you can create such, that's where you can create the craft around it, right? The brand around it, the language, the storytelling, the content, there's so much stuff you can do with that. But at the same time that that's going to pose some issues in that reality. And there are going to be some people That are going to get, you know, the craft breweries are going to be upset with because they're going to take shortcuts to achieve a product that is because also their ingredients are getting better and better in terms of compounds they use and stuff like that. They're going to start creating products that are actually pretty good for consumers and they can do them in a day. Right. And it's like, okay, now we've got like those inefficiencies really start showing themselves when those two categories are competing right now. They don't compete, but when they start competing all of a sudden, that's, you know, there's going to be a bit of an issue there. So yeah, there's, there's, uh, I think, you know, the reason, the reason I threw that in there is because ultimately it comes back to efficiency. And like, I'm, I'm, you know, I'm a, I'm a fan of craft beer, so I'm not a fan of taking shortcuts. That her quality, but I think everyone has to be very more than ever before. I think you should have people in the brewery that are, and if you're a brewer, you should absolutely be more focused on this than ever before is what kind of efficiencies are out there. What things can I trial that isn't just, you know, like I've got this new hop variety. I want to know if it's what, what kind of like, uh, uh, flavor it's going to bring or aroma, whatever, what you, what you also need to be thinking about is like, you know, what. actual, you know, different products exist, what technologies might start existing and actually really start thinking about how to make a product that is as good, if not better, or if you, if you're saying it can be five to 10%, you know, dropping quality, because that's what the consumer, you know, wants for the price point, whatever it might be, you make that decision, but you need to be more, uh, purposeful, uh, and conscious of the fact that, that you've, you've, you've got to be testing those things and seeing what's out there, right. Versus I think before we never really focused on that. Yeah, yeah, absolutely Such so many great points in there and yeah the power of efficiency beyond just reducing resource consumption and Looking at technologies and everything is such an important factor for next year as well. Uh, well this year now I I have a question for you as well. Luke. I I don't know where this observation necessarily came from for me, but I go back to when I was working in breweries in, you know, 2016, 2017. It was growth growth growth And everyone was talking about volume, but I feel like now everyone's probably talking about margin over volume Do you think there is a power in creating a community within? Around your brewery and within your brewery that you know Because that's really where the margin is one and is one and lost I think from my observation in community rather than chasing volume Uh at lower margins. I don't know what your thoughts are on that I think it depends. I think, I think that the, my answer to that would be almost a step further back and just say, make a choice. just make sure you make a choice, right? I think before what happened is people didn't necessarily make a choice. It was like, it's like, I'm, On my boat and I'm going in that direction and the wind is taking you and the tides are taking you and then like, and then all of a sudden that stuff stops and it's like, Oh, shit, where, you know, how do I, where am I going? Where, you know, like that kind of thing. Like, and obviously I don't want to not discrediting. I mean, I was in, I was in those breweries at the time. Like, I'm not discrediting, uh, obviously a lot of work and effort went into that, but, but at the end of the day, like your, uh, You're there wasn't there. It was hard to make a choice because you didn't know how big it was going to be. You didn't know. There's so much you didn't know all the things. What you did know is that more and more people were asking for it hard to keep up with demand. Go, go, go, go, go, go, go. I think nowadays it's. It's like, it's not the case. I think people are making decisions, about what they want, what they want their brewery to be. And so, um, and yeah, because you have whatever it is, the number is now, you know, 2000 breweries in the country, give or take, A lot, the strong majority, 95 percent of them, their decision probably has to be, I want to be community based. Right? because, because, the, the the country can't support probably more than 5 percent of breweries going for volume. Right? It's just that the market isn't quite there yet. Um, and that might change. so, yeah, I think, I think it is the case because margins are squeezed. Volume is more predictable, or let's say capped. Capt is the wrong word because it is still grim, but you know what I mean? and so, so where do you, where do you want to sit within that? Right? So, you know, I work with a lot of breweries. I have breweries that are like, you know, I want to grow up until this amount. I want to get to here. Like, those are conversations that we didn't really have in the past because it was like, you know, our, our brewery can get to here. Our brewery size is here, but what would we do if we had to, like, it was always like, there's always more to consider, not necessarily that you're going to go there, but to consider Now people are talking much more in like Okay. I want to be like this. Okay. Well, how do I make that most optimal? Right? And yes, community comes, comes, comes down to it. We'd all, you know, the best business model in the world is treehouse brewery, right? Sell over a million hectoliters at your front door and you'll be fine. Right? but, uh, but yeah, I think, I think that, that observation you have Is right because of sheer numbers. I don't necessarily think that's what everyone's doing. I think it's just 95 percent of people are having to do that because that's the reality, right? Uh. Yeah, and I want to circle back to a point that we don't normally like to do but you when you're talking about premium premiumization And the bigger breweries are going to look to create those premium products to to try and have that premiumization. Do you think? Obviously we saw a lot of purchasing of breweries from big breweries, you know five years ago Or however long that stopped really do you do you think that's something they would look to do again? Or do you think that's kind of part of the market is over? I think it will happen again. I mean, obviously this is like crystal ball, right? Um, I don't think anyone knows. I do think it will happen again. not, not, not nearly to the same level because quite frankly, like, There was mistakes made, from, from everyone, from a lot of people buying, but that, that, you know, that's, it's not, again, it's not even a knock on them because it's hard to, there was some really bad mistakes, but, but, you know, sometimes like when, when you get, when you don't know the size of things, when you don't know what it's going to be, you've got to make your best guess. And I think, you know, in some cases people were, were, were pretty far off, but what, one of the things is, again, if, if you, if you talk, like you said, the premiumization thing, if this stuff continues to happen, like. For instance, with Heineken and Beavertown, like, is Beavertown going to be enough? I mean, I know they have Brixton as well. Will Brixton, like, at some point will they go, you know what, there's this style that's really creeping up or there's this, like, you know, similarly for, for, for most of the other breweries, if you look across the board, like Carlsberg obviously is, is, is very much, uh, Brooklyn. but, you know, at some point, does that start to wane? do they look for something else? Uh, Uh, after they've, they're, they're, they're, they're done their brick, brick, brick, uh, uh, work. so there will be things. the other major reason is because a lot of the reason why things didn't go so well with the first round of purchases was because of the business cases assigned to them. So, like, because again, if you didn't know the size of craft beer, what ended up happening is like, I want to buy your brewery. Uh, I believe so internally, they would do their business model and go, I would, I believe that in 5 years, I can make this brewery X, right? One of their assumptions in there is the growth of the, of the category. that didn't come to realization. I mean, like, I can tell you, I know some of the business cases and, like, they were just absurd. But, you know, I think nowadays where, where valuations will be lower because, because people understand, you know, more or less where the market is and where it's moving, um, if people are, are willing to accept lower valuations, which I think a lot, you know, breweries will, Then yeah, I think it will start happening again. but, uh, but yeah, I don't think it'll be like boatloads. I think there might be another five to seven out there within the next three to four years kind of thing. and then, and then after that, hard to say really Do you think there's, it would be important if this was the route that you wanted to take as a brewery, which, you know, some people do. Do you think it's important to like be bold and stand out for them to be, to be something that people would purchase? for sure. I mean, like, uh, Ultimately, like, I think that's one of the key things is, is, is that you'd be surprised. there's so many breweries out there. Like, you've got to, you've got to be on someone's radar, right? Someone's got to know about you. And obviously they do their, they do their research, but you'd be surprised, like, they're not, they're not super knowledgeable in the craft beer world. not like you and I would be, for instance, right? So the folks that are typically, doing a lot of the, a lot of the, like, The looking and the analysis and stuff like that. So, so yeah, you've got to stand out. but I think, you know, it probably is a combination of that. I think nowadays, which is different than it was before it's business model. So, you know, like having EBITDA, You know, they can obviously generate a lot more EBITDA because they'll get the ingredients at a lower price and stuff like that. But, you know, having a business that is sustainable, that should, you know, can, can, with their, with their efficiencies built in, can deliver, you know, strong EBITDA. So it's not dilutive to their margin. that kind of stuff is going to be more important than ever before. As I said, it's going to, you know, they're going to, it's probably going to be much more like, Here's my portfolio, of, of, of beer. So again, if you take the Heineken example and you've got Brixton and, and, and Beavertown as your craft options, like, do you, what fits, what's, what, what, what fits alongside those brands, but equally, you know, where has the market moved to that, you know, consumers are demanding, uh, so they, they want this kind of brewery. So there's, there's a lot of different, Different ways that I think they'll look at the business, but much, much different than before, which was probably more. So, okay, like, if you like, take the Camden, I remember sitting in a meeting about Camden. It was like premium lager number one, uh, growth driver in the UK. Let's let's, you know, and boom, Camden Town Brewery. Like, it was, it was a pretty straightforward. Uh, and to be honest, I think a fairly smart one from them, but, but yeah, I, you know, I think, I think nowadays is maybe a bit more complexity in terms of how people look at it. Yeah, really interesting. moving on to something slightly different. there's a lot to talk about sustainability, of course. something I talk about a lot and, you know, for the record, I always believe that sustainability isn't just the environment, it's people, planet and profit. For. We talked a lot and I had George Wade on the show not so long ago talking about this, but do you think there's like a genuine demand in the market for sustainable products, so to speak? I think you have to break it down. You have to, you have to break down the term market for a second. because if you think of beer, most cases you have a buyer and you have a consumer, I would say if you ask a consumer, they're going to tell you, yes, I think in reality, once you get to a shelf or a, or a tea bar or whatever taps, the stuff that's going to convince them is how it looks, and what price it is. Yeah. Pretty much right. So I don't think I don't think at the point of purchase, it matters to people very much. Although they will say it does, they might have favorite breweries in their head because one might be more, you know, Daya puts the, the, the, uh, on the, on the can, they put the, the carbon footprint, for instance, like that kind of stuff, they might might lead them to create favorite breweries. But I think where the push is going to come more so in the short term is actually from the buyer side. So I think you have, and it's definitely been the case. You have, uh, like supermarkets as well as big pub groups that are going to be pushing suppliers more and more to be, uh, you know, sustainable suppliers will get well, basically, if you want to tender, you have to be. X, right. I don't want to say be core, but that's obviously one side of sustainable, but you know what I mean? Like there's going to be, that demand is going to come, I think first from the buyer side of things. because yeah, they're one individual. It's easier to convince that one individual to get behind, something like this, something, uh, sustainability. they obviously, those businesses like a Mitchell's and Butler's or a Tesco will have, pretty big CSR initiative, you know, initiative. So that's like a flow down. I think once you get to the customer. Consumer level, I think not quite yet. but I wouldn't, you know, I don't, I do think it's, it's, it's almost like in my head, it's going to go from like, yes to no, it's not going to be like a gradual thing. It's almost going to be like. It's not going to be like, for instance, brand like or aesthetics, which for me, aesthetics is more like, you know, it's like, yeah, I kind of like that. I like that. I don't like that. You know, it's like, it's a bit of a spectrum. I think with, with sustainability, what's going to end up happening is it's like, are you in or you out? Right? Are you a sustainable product or are you not? And, and, and some people are going to care and some people aren't. So I think, I think you're better off being on the Yes, side of that, but right now, obviously, from a buyer perspective, they're already putting that pressure, but I think overall as a business, you're better off being in that way, especially if that's the values you have as an individual, because it's coming, Yeah, yeah, it's a really nice way of breaking it down actually. And you know, almost the way I was looking at it visually in my head, when you were saying it's like to get onto the supermarket shelf, you have to have that sustainable product. But when it's on the shelf, it doesn't help drive necessarily drive the unless they do it. So I think like a good example is you'll have like, you know, you see like brew good or like, they'll be on like an end cap, for some, you know, it might be B Corp, it might be some other sustainability thing, but that, you know, again, it's driven by the retailer. I think at that point, yeah. Okay. If you make it. If you make it that obvious, like, okay, this, this is the, these are sustainable businesses, uh, local sustainable businesses. Like, yeah, that might drive some stuff. But again, it's for me, it's all coming from the retailer push for now. then it is from the consumer. I Yeah, yeah, yeah. It's really hard to get any sort of real data on if sustainable products matter to the consumer. But there's plenty of easy resources to find to back up the buyer. So yeah, really one way to one, think of it is like, it probably helps with like brand love. You know, uh, brand sentiment, I think, but that's super hard to like translate into anything more than just that. I think it's, it's, it's very hard to translate it into rate of sale, but, but yeah, I think, I think from a brand point of view, it can only, it can only be a positive, right. Yeah, absolutely. If, this is going to be a bit of a road question for you, Luca, and feel free not to answer it, but, uh, if you were to start a brewery, or had to start a brewery tomorrow or the next week, month, year, what business model would you, would you approach it with? Mm, mm, oh, man, like, I do have an answer to this because I mean, obviously, I've thought about this question a million times. So I, I, I would probably like, I think that I mean, it comes down to opinions, right? This is just a combination of. An idea that, that I have, but also where I think the market is like, I think where, where there's, where there's a lot to play for right now is kind of in the, in the in between space of craft and, and non craft, right? So, and I think there's a few people that are going out at, like, I think Jubal is obviously a good example, Brugadar, I think are probably in that space as well. but yeah, it's hard to play in that space quite frankly, because, finding that balance between price and, and quality, but I think, you know, for me, honestly, like, I would just do something like really simple, right? Like, and I think the good thing about beer is, as you said, it's like, there's communities, communities play such a big role. So you can can really build around a community. So, like, one, and I always remember there's a stats that, uh, I mean, it's pretty old. I don't know if it's still the case, but when I was back in Canada working, like, the number one. Uh, promotion done in, in retail is when pizza and beer are, are combined. that's the highest selling promotion in retail in beer. So like at the end of the day, people that like beer, like pizza, people like pizza, like beer, that kind of thing. So it's like, I would, you know, Whether it's exactly this or a variant of it, but I would almost start a brand that's like, you know, like a pizza pale or pizza pills, a pizza and like using like the, the aesthetics from like, you know, the old school pizza boxes, that kind of thing, which, I mean, I know there's brands that have done releases like this, but I mean, I would do like a very simple core range, like a pizza one, uh, you know, like, so you're, so if it's, I guess, to a degree, it's kind of like, A bundle bus kind of thing where it's like, I'm creating a, it's like a culinary experience, but bundle bus is also very niche within their, within their restaurants. This is like taking things that are widely liked, and just saying, look, I'm going to make a product. That's like an elevate. It's like an elevated, loggers and elevated this. And, but you're going to wrap it around something that makes people feel something creates an occasion. If you're going to have it, something like that, I just feel like there's a lot of space to go out I mean, yeah, I'm going to go, go home and register the, uh, pizza pills. co. on once and have the idea. I'm not going to do it. So if anyone wants to do it by all means, but I think like, you know, I think one of the things that I, um, I, I, obviously I've worked, I worked at Camden and spent a lot of time thinking about the premium logger side of things that the difficulty with premium logger is that, people don't want to pay more for logger, you know, like, it's like, Uh, it's one thing if you're talking about, uh, an IPA and a pale ale and all this kind of stuff. But like, if you go, this is a logger, it's, you know, it's, it's a premium version of a logger. Like people just can't wrap their head around it. now of course in the on trade, it's slightly different than the off trade, but definitely in the off trade, that's the case in the on trade because you can, you can build a bit more of an experience around it. You can convince people to spend a bit more and also the price points are much more similar in the on trade between standard and premium. Bye. But yeah, like one of the, so like, for instance, I sent, I remember sending a note to, to, uh, oh man, who was it anyway, but I can edit that part out. But, but, yeah, the, uh, the, the, the, the, I remember thinking like we've taken Jubal Jubal's, there's something about, I mean, obviously everyone have their opinion around the liquid. I don't, I don't drink it, but in terms of the brand, I think one of the things that makes a lot of sense is like, it's not, it's a, it's a premium lager, But the way you're telling people that it's premium, the way you're convincing people to spend more for it is, is that it's, it's, there's flavor, right? It's like, it's different. It's like, there's something more to this that you should, that means that you should pay more for this, right? so I think if you're going to do something in lager, you've got to give someone, it's not enough to just say, I'm Camden Town Brewery. I make a premium lager. It's great. You're going to love it. But it's like, it's still a premium lager. It's still a lager. It's like that, that's a premium lager. So like, if you do like Pizza pills or something like, like, I don't know what other examples there are, but culinary things like, again, you're, what you're telling people is that this is tuned to this experience. So, yeah, you want to pay a little bit more for that because you're going to have that full experience. Whereas if you just show up with a Budweiser, it's like, you're just gonna be like everyone else kind of thing. So, I think there's something in, in that, Not to mention, if you want to go sell that around to pizzerias around the country, pretty good fit. so yeah. I'd be so interested. If I see a pizza pills come out next year, I'm going to laugh so much. That's great. do you think there's any examples in the, I can say UK brewing scene, but it can be wider. Of who are doing things really well at the moment and kind of maybe trendsetters in the industry I think that there are two categories. I think there are, there are breweries that are newer, post 2020. that are a lot of examples of those that are thriving. Somewhat because they're smaller maybe and, and you know, duty rates are lower and they're more efficient and all that. But I think at the end of the day, like, I They started at a time, like, I think Vault City is a great example of it because, you know, doing the kinds of beers they do and the whole idea around that stupid series, right? If you would have done that in like 2018, 2017, like, you know, probably would have been, there would have been a lot of people pissed off. There's still people pissed off about that kind of stuff. But like, you know, I think everyone nowadays realizes that, you know, You know, you got it. You got to be, everyone's got to go have a shot at doing what they want to do at the end of the day. Right? Like, and, and so I think people are more concerned about their own wellbeing than, than someone trying to do something that they don't agree with. Right? I think back then it was different. So I think, you know, you take someone like that and they're just, you know, they're able to kind of just like, this is what we're going to do. This is, we're going to go after it. Really passionate about it. Amazing people. I You've done some work with them as well. But like from, from everyone I've worked with there, it's just, you know, it's, it's, it's, they're, they, they, they all, they're all great people that really believe in, in, in that and what that brand is trying to do. And, and I think like, that's an example you have, like you have so many of like flock and other one that I know those guys a little bit that, I know beak was, was started before, but, but, you know, kind of came into their own, In an hour, I think they actually started like the rate after a couple of weeks after covid hit their real brew. I think they started slightly before that. But, so, you know, you have all these breweries that I think, you know, really kind of set into here. This is what we're going to be at a time where they could build that business without these kind of fluctuations that we're changing the strategy. Like the 1, I mentioned, like a northern monk for us. It just wiped our strategy within a couple of weeks. We have to change everything. And then I think you have. So, uh, the second category, the second category are breweries that are, um, that have, what's the best way to say it? That like really strong seasoned breweries. So those that have like, they have a destination and they've selected a path that they're going to go down and like they, they, but they, but they're really good at it. Right. So these are like, you know, you take verdant for instance, like at the end of the day, like, you know, really high, really high quality stuff for those kinds of beers. There's not many people that match them on that. Right. and I think, you know, as long as you make the decisions that continue to, to, support what makes you the best and what makes you unique, then you're going to have continued success day is another example, right? So you're going to have, you have these breweries that kind of sit in that, in that camp of, you know, they have built an incredibly strong brands, obviously good beers, obviously specifically steady rolling man is an amazing brand. Like, so I think like you have these ones that, that. Ultimately, if we talked about like the market, uh, the beer market being a lot, there's a big market and a lot of people in it. But I think, I think it doesn't matter how many people are in the market. What's important is how good are you at delivering what people want in that market? And I think you have these examples of people that, that are just like super good at what they do. And, and you're always, no matter how many. breweries come into that market, as long as you're really, really good, the best at delivering something that matters to the consumer within that market, you're always going to be successful. depending on how you define success, of course, but you're always going to have some niche that you've carved out. Hopefully that niche is big enough to, to, to, to sustain. your business and your, your goals. So yeah, I think it's, it's two things. There's a lots, but you know, you've got these, these newer breweries, everything from like more traditional craft beer styles, like a, like a beak or a flock to the jubile and, uh, and, and a vault, Uh, and then you've got, and then you've got, and, and Brugader, and then you've got like the, the, the old guard that just, you know, killer at what they do. Yeah, all excellent examples, actually. Yeah, so, so many things have been done so differently, especially at Vault City. I mean, I work with, as you said, I work with them. I know internally just how passionate and driven they are to, to produce, you know, beers that are very different to what a lot of the craft beers are doing. But the way that they make them is so fascinating and so purposeful. which I'm something I found, I found quite, inspiring almost when I was there, just how purposeful they are about what they do. which I think is, which I think is really like powerful when you're in a production team anyway. you know, I'd love to spend some time here, uh, Luca talking about just some of the statements that we see online all the time surrounding the doom and gloom as we, as we really look to sort of dispel them and try to get people to feel. What should be optimism about a really exciting market that has been exciting for a long time and I still think will be exciting for another, uh, for a good amount of time. So I'm going to throw some, statements at you and if you don't mind, you can sort of dispel them for me. So the first one I'd like you to dispel is that craft Oh, yeah, good one. Uh, do you want to, you sure you want to get me started on that? How much time is this, is this thing? Uh, Yeah, we got unlimited, no, I mean, like, like saying, like, imagine you're like, An actor or an athlete, right? That's like saying, I'm not going to go trial for that play because there's too many people trying out. Right. Like, it's like that, that that's, that's one way to look at it. Right. But it's like, it goes back to what we were just saying about like a verdant and a, and a day and stuff. Like, you know, if you're going to, if you're going to go do something and you're going to be the best at it, like, doesn't matter how many people are doing it, you're the best, right. You're going to stand out. so I'm not going to say that's not necessarily refuting the idea that the market is saturated, but it's saying, even if it is. Like, who cares, right? What does that mean? What, like, what, you know, like, it just means there's a lot of people doing it. It doesn't mean that there's people succeeding at doing it. It doesn't mean that there is an opportunity. It just means there's a lot of people, right? that's one way to look at it. I think another way to looking at looking at it is, uh, is that, uh, Most categories are, are, are what we would call saturated. Right. I think like at the end of the day, if something is popular, more people are going to do it as more people do it, it's going to become more saturated. And it's like, so saturated people talk about it almost like it's like a threshold. It's like, uh, boom, we're saturated. Fuck we're done. Right. Like, it's like, that's not the way this works. It's like saturated is like a, it's a moment in time. Right. So things, things evolve quite a lot. So. So, okay. Yes. Is there probably more breweries for the amount of volume that exists within more breweries than there should be for the amount of volume that exists for craft breweries today? Yes, there probably is, right? You know, the number of breweries, I think in 2024, Versus 2023 is the first time it went down. so, you know, naturally life cycle, the things will adjust. So there's that another thing is you have the bigger breweries. Like, I think I mentioned at the beginning, the percentages of like craft beer being around 8 depending on the channel of total beer and cider. Like, if you, if you, the other way to look at that is, you know, 90% To 95 percent of, of, of, of the market is the, is the big guys, right? So like, what are we doing to challenge the incumbents? Right. And I think this is something that we haven't done nearly enough of in craft beer is like really, instead of just. playing to the craft beer consumer. and instead of, uh, infighting between craft breweries for the volume that exists, you know, what are we doing to really challenge those? And that's the example, as we talked about earlier about like Jubal and, you know, sitting in that, the idea I give the, the whatever, the premium loggers, uh, the pizza pills, that kind of stuff is like, are we do, are we actually doing stuff that's really kind of challenging those brands? And all that volume that's there. And another really good example of that is left handed giant, which again is another one I would place in the who's doing things well. What they're really good at is, is beer experiences, right? They have like, they have amazing spots. Like most people don't know how many spots they own because they don't know, call them, uh, they don't call them all left handed giant, but they're incredibly good at, um, at hospitality. so, you know, and they went into Brighton, uh, sorry, Bristol and, uh, And, you know, they get this like place in the smack dab in the middle of that overlooking the water. Amazing place. The kind of place that any like global brand would be like absolutely salivating for. And these guys did. I know it wasn't an easy piece of work to do. but, uh, but you know, that's like, that's a way to really take stuff from incumbents because everyone that walks around Bristol sees, sees that it does a lot for the brand. It's massive. It's like, you know, that kind of stuff. So like. We've got to start being bolder. Bolder is a term I started using more and more in talking to people. Like, we're just not bold enough in beer, right? Beer, beer is not a bold, craft beer is not a bold category. there's very few people being bold. So, I think, you know, if we do that, then saturated Becomes all of a sudden, if you take 1 percent from the incumbents, that's huge. That's like, what is that? That's another if we're at, uh, you know, that's another 3400 million, right? So let's start knocking those. All of a sudden, the perspective changes quite a lot, right? So, yeah, I mean, like, And then, you know, even in craft beer, the number of breweries are going down, but even as you said earlier, a lot of the breweries are becoming much more niche saying, like, I want to just be this. I want to be small, like a mills or, you know, like, uh, you've got people that are, before that was very, that never really happened. Like Colonel was like an outlier. And nowadays you have that. So, yes, there's breweries are going down slowly, but actually, even in the breweries that do exist, people are being more purposeful about, you know, not trying to grow too much. Right. So, or are staying within their what they believe is the right level for them. So all these things are going to shift. Opportunity within so saturation is a load is a load of crap because, you know, it depends on all these things happening. And then you have like the bigger craft breweries, right? So the bigger craft breweries are interesting because what's going to happen with them. Most of them aren't hugely profitable, right? Like sustaining them as they are today isn't probably the end game, right? So what is is it? Okay, become more efficient. If you do that, will they make some decisions to pull out of certain contracts and there that opens up volume or will some of those be the ones that sell like we talked about earlier? Um, and then what happens is that, you know, does that open up more room for craft beer? Does that actually close things because, uh, a global brewer buys it and distributes everywhere like Beavertown. So these things are so dynamic that trying to come out and saying we're screwed it's saturated. It's just like, it's it's just so useless. Like I don't, I don't under, I don't understand. You know, I think that what, what, what, what, what people are really trying to say when they say that is, is that, it's a mature market. It is a mature market, but like that doesn't mean anything like that, that you can, you can still be the best in a mature market and kill it. You can still disrupt a mature market. That's what craft beer did in the first place. Let's not forget beer was mature before craft happened. Right? So anyway, I could go on forever. So good, so passionate as well, I love it. okay, I got another one for you, Luca. Is the entree dying? Hmm. well, dying implies that it's like gone, right? So now, like, I think, it's evolving for sure. I guess similar to craft beer. It's evolving, right? Um, I think one of the things with the on trade is, and actually the, the report that, the, we are. Beer folks did, the horizons report, which was a couple months ago now. there, there's a good, there's a good, uh, section on this because like, I think if you think about the pub and what it was, what it started as, like a meeting place and, you know, community hub and that kind of stuff to where it's become, where it was, where it's become. Now, like it's, it's very different. It's, it's lost that, you know, that the intent and the initial purpose of it is, is become very different. And I think nowadays what you have is, obviously people drinking less people being, let's say more cautious with spend and things like that. So I think you got to go back to again, the consumer and what's their purpose to go out. Right. And I think. that original idea of what the pub was is missing in today's, uh, on premise, like that, that, like, community hub. that's one thing. and I think you have other examples, like, uh, within city specifically, much more destination stuff. So I'm going to go to a place like, Um, you know, the Devonshire obviously gets all the news with the, you know, like the Guinness experience at the Devonshire and it's so busy or, like Mission Mars is a good example of like, big destination places. I think what's happening is like, there are these like branches of the entree that are going to be very successful neighborhood pubs as opposed to center city center pubs, these, these like, uh, pieces that are going to be that are going to have success. What's dying is that traditional pub mentality that it's there because there you have. Joe, who's gone there for 30 years and is going to continue to go there. Like that's, that's gonna, you know, that's, that doesn't have a future. I don't think, right now. So I think like you've got to play into that. And I think that's the thing about craft beer is like, again, you, the, the, the, the left handed giant tap room, a good example. Another one in Bristol is wiper and true, right? If you've been to that tap room, it's, it's, uh, you know, like I think. The, the folks that are investing in tap rooms that are really like community hubs, uh, are going to be uber successful because it's like the pub of now. It's like what that pub was 100, 150 years ago, 200 years ago. That's what it is now. Like, you know, track is another good example. There's so many events around, around, around the, the, the space they have. It's such an open, welcoming space. So you've got these like incredible places that have the, you know, have all these community events. You can see a brewery, the beer from the local brewery is being poured. Like there's, it's unmatched, but you've got to, you've got to, again, be bold. You can't just, you know, Uh, I love what flock did to be fair because, uh, it's going to send Ross a note this week because they sent the email this week of the new tap room. Right? And of course, they have a, an industrial state like many do, but, you know, they really invested in like the bars, like the wooden, I don't know if you've seen it, but like, when panel, like, they've really invested to make it more than just an industrial state. here come have a beer at our tap room, right? Uh, I know not everyone can do that, but I think that's an ambition everyone should have because those are the pubs of, of, of today and of the future, right? and then, yeah, and then I think if you're going to do other things, like you got to think bolder, like you get, you know, okay, maybe you do like neighborhood, pubs. Another good example is if you take, Graceland. So like, uh, the folks that have Earl of Essex, as well as many pubs in London, uh, many craft beer pubs. You know, they, they opened one recently, uh, that I cannot remember the name of off the top of my head, which is pretty bad, but, I was there not that long ago. but it's, it's like, it's the first one where they opened up a little bit more in the neighborhood up, up, uh, North London. And again, it's like, it's, it just sits really well and as a neighborhood pub, all the locals go there, that kind of thing. So, so I think people just have to be more purposeful about why they're doing, the on trade versus, you know, I'm just going to put something here or there's something that already exists here. I'm just going to like reopen it. so yeah, and, and I think you're already seeing that. I mentioned a bunch of examples. Verdant obviously has started to go into a lot more to the pub side of things. And I saw recently they're redoing the Seaview. you know, so they're investing to make that, you know, um, uh, a bit of a, a unique place, a hub, that kind of thing. So see more and more that the other thing, you know, within pubs themselves, the other thing that's a reason for optimism is. Craft beer is actually now the third, uh, best average sales, uh, for pubs as of last year. So like number one is a world. World beer. so things like Cruz Campo and Madri and all that kind of stuff, uh, that's 52, 000 on average for a pub. the second place is standard lager. that's 42, 000. And craft beer as of this year will be the number three at 27, 000. So craft beer within pubs is actually pretty good. 65 percent of the average sales value of standard logger. that's, that's like pretty incredible, right? to think that we've come all that way. And so, and you'd expect that that would hopefully continue to go up for some of the reasons we talked about earlier. So, yeah. Okay. Are the number of pubs going to go down? Probably, they will, not probably they will, but the ones that are there are going to be better at what they're doing. And, and they're going to be much more focused on who the consumer is. And the consumers of today demand more than just lager. So they're going to, you know, they're going to be buying, hopefully be more craft beer in those establishments. And so, yeah, I mean, I don't know. That's more of an evolution than it is like a doomsday thing, isn't it? Yeah, absolutely. Great answer as well. I feel like everyone is after that experience in pubs now. Well, whatever that experience is, it can be different, but you know, there are a lot of the pubs that I've seen that have closed have been ones that probably didn't quite have that experience part nailed. And, and yeah, uh, as you said earlier, it's like people are going in To pubs now, they are more likely to spend on less pints, but more likely to spend on a premium product, which is also a really important part of, or growth category in a, in, in a pub. I think it was really fascinating. You said that the, I didn't know that, that it was the third best selling volume for a pub was That's from your old friends, Heineken, my, that I got their report from last year. So, Oh, yeah, it's basic right now. Craft is basically tie with Cascale, but, but you know, it's obviously growing. Uh, Well, yeah, man, that was that was absolutely fascinating what do you think you would like how would you summarize the key takeaways? from from this episode I don't even remember what I said five minutes ago. no, I guess summarize is like, uh, is. You wake up every day with a choice of how you want to look at things. and, uh, and obviously there's a lot of content out there that will try and convince you of X, Y, or Z, right? But I think at the end of the day, we have to remember within beer that very lucky to be in beer. As a category, and obviously the definition of beer changes all the time, but, in beer in general, as a category, it's got Pete. It's got size. It's people that want it. there's a lot of positive, evolutions that are happening, as we talked about with premiumization with some of the efficiency stuff that's going on, you a lot of resilience built over the last few years, which had been a challenge. and, you know, and not necessarily is it easy today, but. but I think, that resilience will pay off as well as the fact that, nothing is easy. If you want to be in business, it's not easy. Jobs aren't easy, right? So, so being being not easy is perfectly fine. So I think that's all the perspective and frame of reference and how you want to think about things. There's people. Thriving out there. There's a lot of people thriving. I work with a lot of people that are thriving, to be honest. I think that's really important for people to keep in mind. Equally, there's people that aren't thriving, that are suffering, you know, but there's reasons why. I, I see it. I, I, I see some of these business. I understand what, what's, what's driving some of them and where, where some are, are, are, are why, why they're having issues. But I think if you plan things correctly, And you, you, you know, you have that optimism and you crack on, like there's, there's no reason why you can't be successful. So I think that's like the summary. I mean, that doesn't cover off everything we talked about, but I think that's like the main message that should be at the end of it. Right. Yeah, yeah, absolutely I'd also love Anyone who has listened to this episode and you know? Subscribes to the, to the fact that we're actually, this isn't doom and gloom is the next time you hear people talking about the doom and gloom is that you challenge them. I know we don't all want to be that brewer, but it is really important that we actively change the narrative around because it is, it is a getting a bit exhausting sometimes hearing about all of the negativity that surrounds it when actually I feel that it is a very positive industry. And as you said, like, We're fortunate, but we also actively chose to work in beer. And the reason is because it is really fun. It's a great product. And we have a really nice community of people who are very collabourative and super friendly. And it's easy to go for a pint with a fellow brewer who lives down the road. Like that is something that's like really easy for us because we're all very like minded people. And I feel like we should really utilize that. And, and it's one of our biggest strengths. Is collabouration and and I think we should just make sure that we continue to stick with that and stay positive So if uh, and if you can't convince them then just get them to listen to this I think like one of the things too, like the one thing I would throw in is, is, um, is because I did have a bit of a back and forth one time with a journalist. uh, and, you know, it's like anything you gotta, it's never always right. You're never always wrong. I guess. he did say something to me, which, which is good. at the end of the day, like a journalist, you know, they've got a lot of things going on there. They're there. They're oftentimes going to take. The easy wins, is maybe a bit of a, what they wouldn't say that that's the term I would use, but like, they're going to get what's in front of them. This piece of news comes through. Okay. I'm going to repackage that and I'm going to. So I think 1 of the things is it's actually on us to bring more good news because they're not investigative journalists. These people aren't going to try and do what I do and what you do, right? Like, that's not their job. Job to degree, right? their job is to report, what's going on and what's going on is what they see. It's not what's actually going on. So I think it's on us to actually provide more. and I think the brewing community is awful about talking about themselves. uh, you know, I get it. I'm the same way, but like, you know, like we don't, we don't shout about our successes. The non alcohol community is incredibly good at it. Like, if you see, like the narrative around non alcohols, because like, you know, Every little positive statistic is like slapped everywhere if you breweries don't do that. So I think there's a lot more that can be done, about the breweries actually just shouting about their successes and, and putting it in front of people so that journalists have that content to pick up on the stories to tell. there's probably a whole, you know, another idea of something like, uh. Like creating contents around like positivity, positivity or like positive stories within the brewing world. There's probably something in that that should be done. I don't know. Maybe there's like, there's all those like, like podcasts and contents, for the craft beer community that I think is evolving quite a lot these days. It might be good for one of them to start like focusing a little bit more on that side of things as well. because I just think, I just think we missed that opportunity and it's content that not only will feed into journalism, but I think generally people overall, like talking about, you know, what's going on in beer and making it positive versus not like this, this kind of episode, I think is when you came with this idea, I was like, man, that's great. what a what a what a really lovely point to make actually it maybe is on us To actually generate more positive news. Yeah, I didn't I'd never even considered that really but it's uh, It's a really good point and And yeah, we, we actively share and talk about the negativity when actually, you know, there's so many, as he says, so many positive things happening with so many good breweries. We need to be much better at shouting about that. Uh, that's a really, really, really cool point. Luca, I, I always do this at the end of my pods. Now, I asked for, for the guests top three. So I've got a question for What do you think the top three lessons that the craft beer industry can learn from other sectors? good question. I guess we just said one that's, that's be more positive. Um, now I might throw that one in there, but there's a few other that come to mind. So I think, I think one of the things which is, um, awesome consumed today is it's evolved a lot. I think if you look at the businesses that are like really impressing me these days are are people that are. You know, a really focused on content. So there's a, Canadian company called midday squares that I've kind of shouted about a few times. I suggest anyone to go take a look at them. But like, 1 of the founders is a guy named Jake Carl's and he, He like, you know, when they get like a listing in a new place, he like goes to the store and like with the staff does like a choreographed dance and like they, instead of it's like here, I've listed this in Tesco with a picture. It's like, these, these folks are creating content. And to be honest, it's almost like, instead of like, Paying an influencer to, promote their product. They actually just have become influencers because they create killer content. And again, going back to what we're saying about breweries not being great about talking about themselves positively. Brewers in general are very closed, unless you kind of go to the tap room and stuff like that. And I think, you know, it was very good in the initial wave of Instagram in terms of photography and driving content, like image based content that makes the product look great. But nowadays people want transparency. They want people, they want stories. It's like the whole idea of like, like, uh, reality TV, like, All the documentaries you see on Netflix and stuff. It's like, you know, people want more of that. And I don't think we've evolved in the brewing space. I think like being able to create content. If a brewery came out there and like started making killer content, I think it would, it would just do wonders for them. because one of the biggest issues within craft breweries is, you know, Is reach right? Like I remember I've said this a few times. you know, in some, some podcasts that I've done, but like, if you, if you look at like, take an example of, of, of like, uh, uh, one of the larger breweries that you would use. So like, I don't know, like a tiny rebel or a vocation or a, you know. Or Northern Monk or something like that. If you measured their prompted awareness, so awareness is like, does someone know who you are? Prompted awareness is literally, I say to you, have you heard of Tiny Rebel? Do you know, you know, do you know Tiny Rebel? If you say that, including their name, if you say that, it's like, It's 90 percent of people are going to say no, 90 percent of people. So like the biggest, if you do Guinness, it's like 90 percent of people say yes. Right. So the biggest problem for smaller breweries is reach both in terms of distribution, but also share a space in people's mind. So content is a way to get over that. In a very inexpensive way if you do it right, trying to do billboards and ads and stuff like that. Very expensive. Most craft brewers can't do it. So it's almost like a shortcut to reach. I think that's like a massive thing. And like, you know, even, you know, guys like folks like Cristiano Ronaldo, who's this football player, he's invested hugely in this now because that is the future. It's like content is the future. And I just don't think we've moved on. So that's one, uh, number one. Point number two, Is know your consumer know your customer your target customer and and what they seek both consciously and subconsciously, right? So I think, you know, gone there. If you take like a company like Apple, they actually. Apple is not really a product, right? of course they have all kinds of products. If you think of what they do, what they build, it's not really a product. It's like a solution. It's a feeling that just clicks with a type of consumer, right? And so, but if you look at, if you look at beer, I think it's like, here's my product, who wants it, right? Like, I'm going to make this, who wants it, right? Or the craft beer community will like this because it's, you know, thick and got this and that. I think, another good example is, Pollen Projects, which was started by, uh, Ben Branson, the founder of Seedlip. so it's an incubator for non alcoholic, Uh, drinks and it's like what he's so brilliant at. I worked with him last year in a project. He's so brilliant at is doesn't really think about a product. He thinks about the consumer and what's going on in the world. And he's like, I'm going to do this. I can do this. And I can do this. He's generally, he's, he's, he's kind of credited with With building the non alcoholic movement because he built seedlip at a time when no one was drinking non alcoholic stuff. But he kind of figured like this makes sense because this is going on. This is going on. So I think if you understand consumers and you start with the consumer and you start to solve for the consumer, what you start doing is you start building products that people want and not necessarily joining in and putting products out there that we know people already want. And that's like. That's really important because if you talk about a mature bit market, the way you break maturity is by almost fragmenting off new pieces, right? So I think that's another key thing that that needs to happen. Think like Apple, you can evolve, like obviously there's things like hop water, there's, you know, that's one example, but there's uh, there's plenty of different, like I, there's a, there's cider craft brewery here close to me in Italy, which I just had a can from the other day and it was brilliant. It's like, I found out that he used to work at craft breweries in, in, in the UK and he came over here and he did this and I know there's some examples going on in the UK of that, but like these different branches, that kind of stuff, As long as it's sizable can make quite a big difference within the craft beer community and the, and the, uh, sorry, the, the, the market and, and, you know, the size of it. And this idea of saturation and maturity. The third one I would say is to be inclusive, not. Exclusive. so the reason I say that is because I know beer, we generally always talk about inclusive, you know, how it's like an inclusive community and collabourations and stuff like that. But I think one thing I'll just chat last year about, the term craft beer and it not being correct anymore and people being duped and all that kind of stuff. At the end of the day, like craft beer as a term for the category is an excellent term. I think it's an amazing term, because it like, it's premium. It's like makes people think it's like craft, even though obviously it's not by hand. it's such a good, term that elevates and makes people think, okay, I should spend more of that. That's craft beer. That's not standard lager or that kind of thing. You know, you look at like non alcoholic it's called non alcoholic. It's, it's described by what's not in it. that's a terrible name. We have craft beer. It should be like this great thing. We should, celebrate that kind of thing. But it kind of became very much alike. Who's in that club and who isn't right like, well, you're not craft beer. You are like, and it was for me, it was like a little bit of, um, uh, a little bit too much of like, that's not right. And that is, and going back to what we talked about earlier with some of the new breweries that are doing things that are, you know, would have been like ridiculed five, six years ago, I think being open minded. And what I'm really saying is being open minded. It doesn't matter who's saying their craft and who's not look at what they're doing and look at like, Our consumers responding to it, because that's really what matters. It doesn't really matter, like, if, if, if, if, uh, if, if you think they're craft, if they're invited to a festival or not, but look around and, and, and like, if what they're doing is clicking, ask yourself, Hey, is that something I could, I should look at? And if it doesn't feel right for your values, don't do it by all means, but don't like have a closed mind to what's going on, have a very open mind to what's going on and then decide what's right for you. And don't worry about what's going on around you. I think that like, That mentality is really, really important. It's quite different than it would have been, you know, seven years ago. I think it's evolved quite a lot already, but there's probably, this discussion around the term craft beer last year got me a little bit like, feels like we're taking a step backwards. But anyway, what an incredible top three Uh, there's gonna be so much value for people listening to that. Uh looking at breweries and yeah, I was really fascinated by the You Independent indie beer versus craft beer movement. it's good to get your take on it. I wasn't really sure how it sat with me, but I can, I can I have, I have very, I mean, to be honest, I'm kind of like halfway through writing something on it. I feel like I missed the boat at this point. but I think there's positives and there's negatives. I think there's examples of people that have X, I think. I think, like, if you look at, uh, attic, attic brew, like, uh, those guys have been Birmingham. Like, I think they've executed it really well. It fits really well with their brand. I think, you know, I think, I think it can work for some people. I don't think it's gonna make a huge difference, but I think it can work for some people to, to sway a few decisions. I think, you know, all I was saying is I just feel like, I feel like that's. That whole discussion was about solving a problem for the brewers as opposed to solving a problem for the consumers. And I think anytime you saw, you know, like, it's kind of useless because it's all about the consumer. It's not really about the brewers. Yeah, and I know there was like the consumers being duped and there was some statistics, but again, going back to statistics, I look back on it and I was like, I don't know, I feel like the statistics were maybe just self professing versus, versus really trying to solve a problem for the consumer. The consumer doesn't really care what they want is the right product, right? so yeah, anyway. Yeah, yeah, absolutely. And yeah, you can make, you can probably get a statistic to back up just about anything you want to say if you really For sure. enough. So they're not always the best are they? but yeah, look, Luca, thank you so much for coming on the, on the show, man. I really, really appreciate it. if anyone has anything they want to talk to you about, is there any way they can get hold of you in a A hundred percent. Yeah. Like, I best two ways would be, I mean, if you go on LinkedIn, I tend to try and stay pretty active and put content out on LinkedIn. so Luca Lorenzoni, uh, I don't know if you can share anything, Chris, but, um, that would be one. You can obviously message me there. If not, yeah, send me an email. Right now I'm still using my personal email. I'm getting, uh, my, Business one set up, but it's L U C A 2 at gmail. com. So, I mean, send me an email. I'm always up for chatting if I have the time or, or, you know, if anyone wants to, uh, uh, hear more or, yeah, hear more about path and, and, potentially look at, you know, working together and stuff by all means to, Awesome, two great ways, and I'll link both of those in the show notes, so people have nice easy access to them. But yeah, look, Luca, thank you so much for coming on the show, man, it's me too, man. Really good. And always good to talk to you. Uh, hopefully next time in person. Haha, yeah man, absolutely, alright, take care, mate. well, what a way to start the year. What an insightful guy Luca is. It's not very often that you get someone of his caliber with his experience in both big, big breweries, the biggest in the world, and also right here in the UK at the craft brewing scene. So, uh, really, really found that exciting. I mean, for those who listen regularly know that I am a bit of a nerd for economics and business and marketing anyway. So, Content like that for me is so good, uh, selfishly. I really hope that you as the brewer listener also got some really interesting insight into macro trends, into the, into the brewing industry. And ultimately, as we really talked about and really nailed home, just actually how positive it really is. There are, of course, a lot of people going through hard times, and I don't want this to be anything known to undermine any of that. Breweries have shut and big names have closed. That is a natural part of any market that has ever existed in the history of mankind. So, we just got to remember that actively, this is a positively positive thing. This is a positive place to be. And as Luca said, right at the end, we should really make an active effort to be more positive and share more positive news, not just amongst ourselves, but to the wider press as well. Next episode, I'm going to have Gareth Moore from Daya, which is extremely exciting for me because he's going to talk exclusively about NPD, new product development, and how. They seem to get it so consistently right. Super excited for that episode. If you enjoyed this one, please make sure you share it around both on social media or just send a link to a friend, a brewing colleague or a supplier. Anyone who you think might find this information interesting. It really helps me grow the reach of the show. And ultimately I really want this content to help the brewing industry. So on that note, thank you so much. And I'll catch you on the next episode of the Modern Brewer Podcast.