Go into pretty much any pub across the UK, or stroll down the beer aisle at your local supermarket, and you’re bound to find a few craft beers.
They’ve been gaining popularity over the past few years and in the 12 months to April 2017 the UK craft beer market grew by 23 per cent.
The craft beer revolution has also seen the number of breweries in the UK jump 18 per cent between 2015 and 2016.
Ed Mason co-founded the Five Points Brewery in Hackney in East London in 2013
There have been several well-known craft brewery launches over the past few years which has encouraged more entrepreneurs to source funds and open their own microbreweries, often starting at home with homebrew kits.
These microbreweries have also benefitted from a tax break, introduced in 2002, with those producing fewer than 5,000 hectolitres paying 50 per cent less beer duty than their large counterparts.
One such brewery is Five Points, launched in Hackney in East London in 2013, which is forecasting profits of around £2million in its next business plan period.
It was one of the earlier craft breweries and recently launched a crowdfunding campaign to raise extra funds to extend the business, successfully surpassing its goal of £750,000 to receive more than £1million.
We spoke to the co-founder and managing director, Ed Mason, to find out how it all started, how it has managed to succeed in a highly competitive market, and what its future plans are.
‘In the early days, when it was just the two of us, Greg and I did everything in turns’ says Ed
How did Five Points begin?
Ed: I founded the brewing company in Hackney in late December 2012 with our head brewer, Greg Hobbs, brewing our first beer for commercial sale in March 2013.
Greg and I both live in Hackney and have raised families there and it was important to us to set up in the heart of the local community; we didn’t want to be on an industrial estate on the edge of town somewhere.
Our beers are inspired by our passion for both the British real ale tradition and the best of the international craft beer movement. Our flagship beers are complemented by regular limited edition and small batch releases including our barrel-aged project.
We were the first brewery in the UK to become an accredited living wage employer and are proud to pay the London living wage. All our electricity is sourced from 100 per cent renewable sources.
We’ve also helped to establish an apprenticeship scheme for training brewers and we work to support local charitable, arts and community projects.
Where did your initial funding come from?
Ed: When we first started up, funding was really tough to come by. It wasn’t that long after the financial crash and banks were nervous about lending money, especially to brand new start-up businesses and in industries they didn’t really understand.
When we first approached banks about loans it was very much a case of ‘computer says no’.
I was lucky enough to have had some funds available from selling a previous business, a craft beer bar, and I pitched my idea to some close friends and business contacts. In the end we founded the business with our own personal investment from me and four friends and business partners who were the founder shareholders.
Cheers: In the 12 months to April 2017 the UK craft beer market grew by 23 per cent
Why did you decide to use crowdfunding for the latest funding initiative?
Ed: Our aim with the recent crowdfunding initiative was to build a community of Five Points investors.
What we love about crowdfunding is the ability to welcome on board hundreds, potentially thousands, of passionate beer lovers and supporters of independent and growing businesses, who will be literally invested in the success of our brewery.
The capital from the latest round will be used to open the first Five Points Taproom at the iconic Pembury Tavern, as well as investing in state-of-the-art new brewhouse equipment and fermentation tanks which will triple production capacity volume.
We hope this will allow us to increase sales from two million to six million pints a year (34,000 hectolitres).
The fundraising will also mean investing in our team as well as expanding UK distribution and developing our export business.
What does a typical work day involve for you?
Ed: It can be incredibly varied, and it’s changed so much over the past five years since we launched.
In the early days, when it was just the two of us, Greg and I did everything in turns – I’d be helping brew, cleaning casks, making sales, delivering the beer and chasing payments.
As we have expanded and the team has grown, I’m no longer hands on with brewing and delivering and I can be involved in new product development, marketing, event planning and things like business development and recruitment. There’s also the HR, financial forecasting and quality control, and I still have the occasional brew day too.
Have you always wanted to be in the food and drinks industry?
Ed: My passion has always been for small businesses and working for myself. I’ve pretty much worked for myself since leaving university apart from a short stint as a personnel officer.
I started out working in pubs, bars and clubs originally playing in bands and promoting gigs and club nights. This eventually led to owning my own pubs, bars and clubs, and spending a long time selling other peoples’ beer.
Therefore given my passion for beer and food, it seemed a logical extension to start brewing my own beer.
‘My passion has been for small businesses and working for myself’, says Ed Mason
Why should someone pick a craft beer over a standard beer?
Ed: Flavour and authenticity – in food and drink, in general, there is a move to the appreciation of craft, to support independent, local companies and to value taste and flavour over mass-produced industrial scale products.
People love to support their local brewery, or local farm-shop, or local cheese maker, because people can see that the beer or food is produced with passion and with care, and by people who are committed to quality.
What advice would you give to others wanting to start their own brewery?
Ed: Really immerse yourself in the industry for as long as you can before launching, get work experience or a paid position with an existing brewery and hire the best staff that you can.
The capital from crowdfunding will be used to open the first Five Points Taproom
If you want to be a brewer yourself, get qualified – join the Institute of Brewing & Distilling, and complete a degree in brewing at a specialist course provider, somewhere like Heriot-Watt University in Edinburgh or the University of Nottingham, or a course at private provider such as Brewlab in Sunderland.
What’s the biggest challenge you’ve faced so far?
Ed: Capacity. Our sales far exceeded our initial forecasts and within two years we were selling our first brew-kit and installing a brand new one, double the size.
Availability of space has also been tough, and as we’ve grown we’ve realised how scarce availability is in central London.
We’ve been fortunate that adjacent premises have freed up at just the right time, and we’ve been able to obtain planning permission on two separate occasions to be able to expand and install additional capacity at our existing premises.
What’s the biggest mistake you’ve made?
Five Points was the first brewery in the UK to be an accredited Living Wage Employer
Ed: We would and should have gone bigger at the start, it’s important to invest in the largest possible capacity that you can afford and can fit in to your premises, if your business is successful, you will need it.
A year and a half ago when we reached capacity again, we took the decision to brew some beer off-site at a third-party brewery.
This was invaluable because it allowed us to continue to grow and take on new accounts and still supply existing accounts. But the margins were really low and it impacted our ability to make profits from that additional beer that we brewed.
This has been a key factor behind the decision to expand at our current site, and bring back all that additional production to Hackney.
What are the next steps for the business?
Ed: Our plans include the acquisition of our first taproom, just two minutes from the front door of our brewery, rolling out fully across the UK (currently around 80 per cent of our sales are to the Greater London area), developing export, investing in our team and in new product development.