Brewer facing challenge from craft producers

Beer producer Black Sheep Brewery posted another loss as the business continued to be challenged by the rise of microbreweries and faced additional uncertainty from Brexit.

Operating losses at the North Yorkshire brewer remained flat as the business reported a loss of £437,000 in the financial year ended March 31, 2017, accounts showed.

Turnover held steady at around £18m. The company said £280,000 of the £437,000 loss was related to one off costs associated with reshaping the business.

Hide Ad
Hide Ad

In a statement filed to Companies House, Paul Theakston, chairman of Black Sheep Brewery, said the results “look all too familiar” with operating loss “very little different” to the previous year.

Paul Theakston of the Black Sheep Brewery.Paul Theakston of the Black Sheep Brewery.
Paul Theakston of the Black Sheep Brewery.

Mr Theakston, who established the business in 1992, added: “It is true that trading conditions have continued to be challenging, that the cask beer sector is increasingly fragmented, with the roll call of micro brewers still growing, beer volumes nationally decreasing in the face of social pressures and challenges from other drinks, and so on, with the additional uncertainty brought about by Brexit and a foggy political landscape.

“However, moaning about all this is pointless and counterproductive. It is current reality and the challenge and priority for the board and management of Black Sheep has been to reshape the business to bring it back to profitability as soon as possible.”

In order to tackle the competition from microbrewers, Black Sheep has put together a “craft” team to come up with “new and interesting beers”.

Hide Ad
Hide Ad

Robert Theakston, managing director of Black Sheep Brewery, said battling the fast changing market, with now more than 1,900 brewers in the UK, as well political uncertainty has meant a longer-term approach to the turnaround of the brewer than they would have liked.

Paul Theakston of the Black Sheep Brewery.Paul Theakston of the Black Sheep Brewery.
Paul Theakston of the Black Sheep Brewery.

He said: “It would have been very easy for us to discount the beer, drive the turnover forward and get a short-term boost to the bottom line but long term damage to the brand would have been done.

“So, our plan for controlled change has been key. Time has been spent implementing strategic change, focussing on the areas such as sales, production and marketing that will help us build a platform that will undoubtedly lead to a profitable business.”

Black Sheep said it continued to challenge what is brews, it’s packaging and its mix of beers. The firm said it developed its craft beers through the year, which are now increasing sales growth.

Hide Ad
Hide Ad

“We have put together a Craft team that are tasked with generating new and interesting beers that will challenge everyone’s perception of Black Sheep as a traditional ale brewer only,” the managing director said.

Black Sheep has also made changes at a boardroom level. Production director Alan Dunn left the business in March 2017.

Ealier this month, Paul Theakston announced that he would step down as chairman. Andy Slee, experienced beer and pub industry professional, replaces him. Mr Slee became a non-executive director at the Masham brewery last year. Mr Theakston will remain on the board as a non-executive director.

Related topics: