Cloudwater-19

Cloudwater were one of the breweries I considered a consistent force for good, with a cold-chain ethos derived from it’s (outwardly apparent) symbiotic partnership with distributors such as Jolly Good Beer, and a real mission statement to prescribe, not describe, beer quality. Of the second wave of British Craft Brewers, we considered Cloudwater to be a Beacon for others to follow.

Join the Debate on Twitter: https://twitter.com/ahoppyplace/status/1384871922815623173

On the 14th of April 2021, Cloudwater made clear that ethos was no longer a key value for the brewery via a blog post on their site.

This week I was quoted in a Good Beer Hunting Article for Jonny Garrett.
Here is the long-form on my views for why, whilst I can see the good in this announcement for Cloudwater’s partner brewers, I cannot see past inconsistencies in the message nor the value-proposition that’s giving us no choice but to make calls on supply.

It should also be prominently noted that this take is my perception of events some of which now a year past. If I’ve misremembered anything, relevant “it’s been a bit of a year” disclaimer applied. I’m willing to update the article if so.

To understand why so many people were upset about this announcement though whilst in the same week Vault City and Brew By Numbers also listed in the same supermarket to very little commotion – we first need to go back in time…

On Pandemics, On Brewery Support and On the Supply-chain

In June, 2020 when COVID-19 was just starting to really impact us all (beyond the initial amusement of Furlough, ‘free money’, elbow bumps at trade shows and the like), Cloudwater made a statement that they were withdrawing all distribution lines because they couldn’t be confident on the cold chain credentials of their wholesale supply-chain (Edit: And that several larger trade accounts were significant debtors, though this would not have impacted wholesalers such as Pigs and JGB to our knowledge). This was presented alongside a not unreasonable statement that the additional margins gained by selling direct to the public would ensure security of employment for all of their staff at the beginning of a global pandemic.

(Edit, Cloudwater archive of the post: https://drive.google.com/file/d/1cKYH8c1vmavPzMQG02A4uvHLCFsgZO_x/view , and a post explaining the sentiments behind that post: https://cloudwaterbrew.co/blog/2020/6/29/surviving-the-first-wave)

(This section has been revised following feedback from Yvan Seth of Jolly Good Beer)

However, whilst frustrating, it was a stance I could understand. I did however worry for the impact on wholesalers in general, and specifically JGB. Jolly Good Beer had helped Cloudwater build their brewery coldstore, and shipped a large volume of Cloudwater’s trade beer. The draw of Cloudwater was one of the main reasons we established terms with JGB initially.

In March, as lockdown kicked in and with genuine fear over the impact of COVID-19 on the industry, but more importantly, the health of everyone both in beer, and customers of us all, Jolly Good Beer temporarily mothballed their operations. In June, just as they were ramping back up to manage a supply to the limited open free trade through COVID, and with Cloudwater as a large part of their recovery plans, Cloudwater pulled trade supply. They did so based on what was in the opinion of many, a false message.

Image credit: JollyGoodBeer

It was also quite frustrating for us as a business simply as Cloudwater had always been a big draw for our customers. We moved a lot of their beer, and we no longer had access to it. Whilst intangible, we certainly had plenty of customers ask where Cloudwater had gone. And all we could do was lie, or tell them to stop shopping with us – to go direct.

The Rise of the Online Brewery Bottleshop

In the year that’s followed we’ve seen Cloudwater move from that brewery our followers trusted us to recommend to them, to a real threat to our bottleshop. This was due to the number of guest beers being offered by their webstore, and especially the exclusively imported American beers that no one else can buy. It was Cloudwater using their scale and reach advantages to disrupt the market. Whether or not this was the plan from Day 1, this continued throughout the year that followed.

It created a social contract between them and the most hype-chasing of craft beer fanatics to constantly spend their hard earned with them, and not the competition. Every week there was another reason to hit that £40 minimum and not spend money with another independent outlet.

From a business perspective, I simply see all of that as smart. I don’t begrudge them it to be honest. I respect it. Even if it frustrates to try and trade against it.

I also completely appreciate the message that Cloudwater did much of this to ensure they did not need to lose any of their staff through a difficult trading period.

This acceptance of a logical business position is also why the news about Cloudwater going into TESCO, contract Brewed at BD, for essentially their core range – is from a perspective of competition to my business, not something I take personally. I just have to react to it as a business. It does make some immutable business decisions for us.

If you lay with the Devil…

I must say I do however find it distasteful that it’s TESCO. TESCO who on only Monday of the same week had the brass front to release a message suggesting that “just this once”, they’d support the industry. Whereas, for many pubgoers – they’ll find a trip to what used to be their local now a trip to a TESCO express store, with hundreds of pubs closed down and converted to their convenience outlets. We’ve seen how they’ve really been treating our industry for 20 years loud and clear. I can’t help but feel that Co-Op, or even Morrisons, would be a more pleasant brand to associate with, but again – this may miss the real point…

For those involved, and for the messages this helps further – there are clearly positives

Look, whilst business and frankly, our survival, rests on taking stances against certain trends, I’d like to mention the positives.

I am very happy for the reach and recognition this will garner for the collaborative breweries, and especially the two I know well being Rock Leopard and the Queer Brewing project. Their beers alongside two others are going into a 4 for £10 box set, and the income that this can derive for the breweries (neither of which are currently full time operators as I understand it) alongside exposure to both their beer but also their very important messages, is not to be downplayed.

I am genuinely over the moon for the people involved, in getting their messages heard, in getting some security of income during a very, very difficult time for everyone in beer.

But I still feel that timing the announcement of the TESCO core range alongside the release of these beers is a highly cynical move.

It’s not all about you, you know…

It now seems as though if any independent beer shops – shops that have now had the most approachable of Cloudwater’s beers: The ones we can sell to the volume customer (and not the 1 in 10 that will pay any price for a product they simply trust is worth the premium), make a statement against something that will hurt us – that we are implying the 4 pack beers, that Rock Leopard, or that Queer brewing, are somehow to be chastised.

From my position, that isn’t what I’ve really seen anyone saying. No one I know is anything but over the moon for Lily, for Stacy, and for everyone involved in that deal. But by design we feel of Cloudwater, these deals have been intertwined into the larger deal.

All in order to do something Cloudwater said, whilst putting their Ethos-building partners in the supply chain to the sword the previous year, they would never do: To leave their beer on ambient shelves, in ambient warehouses and for months beyond the best-befores they’ve ever previously been comfortable with.

Image credit: https://www.flickr.com/photos/dhwright/7132178933

They were best, before…

Is the vague (and likely not contractual) suggestion that Tesco may improve it’s beer storage over time enough to overrule a company’s Raison d’etre? I don’t feel it is, but again – this debate should be being had way outside of one regarding visibility of Queer Brewing and the other breweries involved.

To reiterate, it is possible to say we are incredibly disappointed with Cloudwater whilst being very excited for their 4 collab breweries in this release. That is exactly how we feel. But it doesn’t change business decisions that must now be made

What’s non-business speak for “Value Proposition”?

Our decision as a bottle shop on stocking Cloudwater is both challenging and remarkably simple. We cannot sell Cloudwater beer as of today and will not order more once existing lines have been sold.

If supermarket beers are gateway products, then the other side of the aperture cannot only be £5-12 beers. We need the vast majority of what we sell to be more approachable than that.

If a customer, new to craft, comes into our independent store, asks for Cloudwater and only gets shown beer that costs double or triple what they paid in a supermarket, we lose that potential customer. We lose credibility. It’s better to not be associated, and when asked, simply say “We don’t sell the big brands that are available in supermarkets – but we have this other beer from someone else that we think you might like“.

On the other hand, we’ll definitely continue to list non-Cloudwater collaborative products from Rock Leopard and Queer Brewing, and wish them every success. We just wish this release, amazing as it is, was all that Cloudwater had put out today. That it wasn’t front and centre of a deal to actually list significantly more of “their own” (Brewed under contract) beer.

I think they know that could have announced the core range a day after, the next week, whenever. The conflating of the two is unfair to the breweries involves and the supply chain alike and has removed the opportunity for discourse of the business decision without inflammation. I know a huge number of people had a terrible day online on the 14th. This could and should have been avoiding by keeping the deals separate.

Because fundamentally, our decision to de-list Cloudwater is exclusively down to the fact that if we cannot compete on price in an online market place that this brewery themselves helped make signifantly more cut-throat, we will find another brewery to sell. We cannot have our customers question our integrity. Our survival is staked on it.

Feelings don’t come into it..

Cheers…
Dave

Categories: Beer

4 Comments

Carl · 21st April 2021 at 5:06 pm

Well said Dave!

Gary Moon · 21st April 2021 at 5:56 pm

Totally in agreement with your sentiments here

Yvan / Jolly Good Beer · 21st April 2021 at 6:28 pm

I just have a few comments/clarifications of my own here given we are mentioned in this several times…

“Jolly Good Beer are a long-established beer wholesaler”

We’re seven years old this month, which isn’t so long established – I think we’re the youngest of what I’d call the “significant” wholesalers specialising in “craft beer” (and bearing in mind companies like Cave and Clay are circa 4 decades old! We’re a youthful minnow! 🙂

“Overnight, Jolly Good Beer – at the beginning of the first lockdown – lost a huge amount of their viability”

We lost all viability overnight at the start of lockdown. Due to COVID limitations and the number of customers entirely shut down and Health & Safety advice/concerns at the time we shut down entirely of our own volition. It wasn’t until 3 or 4 months later in lockdown Cloudwater made their announcement – at about the time we were gearing up to attempt to resume operations. The announcement was of course deeply shocking to us, and the generalisations in the post hurtful… but discussions were had and things were resolved adequately. I did remain rather despondent about the episode mind.

“symbiotic partnership with Jolly Good Beer”

We are very much a separate entity to Cloudwater, we are not a symbiote! 🪱? 😂 Just want to be clear about that. We buy their beer, we sell their beer, as we have since they started brewing – in a general sense we think of them as friends, and I knew all the founding team except for Paul before the brewery existed. We ran coldstorage then, and from before they existed as we still do. We’ve done some dispense install work for them for their bars, which has nothing to do with their coldstores beyond it being us installing a dispense system in an existing coldstore. As a business they are a significant supplier to us – and in the context of COVID more significant than they were before due to a bunch of general market issues. So we’re significantly exposed to them and they’ve been in the top 5 on our risk-RADAR for a long while. We’ve “lost” significant brewers before (Beavertown being the most damaging) and survived it – and if we lose Cloudwater (though the “indie” market losing interest in them due to Tesco) I hope we can survive that too, though it’s very dicey given where things are at now…. i.e. already up shit creek due to COVID, and this was the last thing we needed on top of that really.

We aren’t happy about the Tesco thing, but that is what it is. It has happened to us before, and we know how it tends to pan our for us through experience. But every case is different, so we will see where this goes. We have seen what looks like an immediate backlash already in sales terms though, so it’s not starting out great – but also not a surprise. But it’s early days yet. This is all nothing new, it’s just another successful “craft brewer” going into supermarkets… and so the wheel turns. This isn’t game changing for UK craft beer, it aligns with expectations really. If anything it proves that the indie market has to learn to expect this to happen and work to mitigate against the impacts. Sadly this is just the reality of life.

We published our own statement about all this here: https://jollygoodbeer.co.uk/2021/04/16/cloudwater-in-tesco/

Dave Hayward · 22nd April 2021 at 10:55 am

Thanks Yvan for all of this – you’re right, I’d conflated the actions in March and June somewhat. It’s something I’ll edit in for context now.

I hope there are plenty more people like A Hoppy Place that, IF they’ve made the difficult decision to drop CW at least for now, will pick it up with additional lines from the same distro’s. It’s certainly what I’m doing.

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