Founder of the Peckham-based business Tom Gosnell said the health of bees, inflation and soaring costs were providing problems for the business, which aimed to champion sustainability.
While the site was fortunate to have a fixed energy contract, the broader energy crisis hitting the sector created “uncertainty” at the firm.
“If we look down our supply chain, particularly at some of our co-packers and then our customers at the other end, you can feel a general tightening in the industry,” he said.
“People are offering less credit, and they’re being less nimble, less responsive and less willing to take risk.”
Inflation was also posing major challenges, with raw input costs having shot up significantly. Everything from honey to cardboard, to fuel and transport, to cans had become more expensive. Prices of carbon dioxide was the biggest increase at 10x its normal cost.
This wasn’t helped by the change in duty rates. While increases in duty were meant to be frozen this year, new Chancellor Jeremy Hunt announced last week this plan would be axed, and the increases would go ahead.
“What’s that going to look like?” said Gosnell. “There are a lot of things to work through there.”
Tough choices
He continued: “I can see things getting quite tough, especially for the end consumer. There is a range of outcomes of a pint price, certainly in London, ranging from £5 to £8. It’s hard to know where that’s going to fall out.
“As a supplier selling into that, none of the pubs are really going to willingly accept a price rise. It’s very challenging – you get squeezed in the middle of all of it.”
One challenge facing meaderies in particular was that they were susceptible to the health of bees.
Gosnell said: “When the bees are having a hard time, whether it’s due to climate change or pesticide use or other things, they’re a bit more sensitive than other crops which are a bit more mass produced in factory farming.
This meant prices went up and down, making things trickier. However, he said, the price of honey is set once a year depending on what the previous seasons had been like. So, you get a good idea what it will be in January and you can adapt from there.
Trying to sell an exciting and innovative product, like mead, was more challenging than usual, according to Gosnell. Cost pressures facing the sector meant operators were getting quite conservative about where they put their money.
However, other operators were “really excited” about stocking something new at the bar, with pubcos Portabello and Laines championing Gosnells' produce at their sites.
Gosnell believed operators should invest in mead as cider drinkers were “crying out” for a premium upsell. “At the moment, if you go to literally any UK pub, you’re going to get the same boring cider brands, whereas you have a range of premium and standard lagers as well as a premium gin,” he said.
Real challenges
He added: “We’re targeting the same audience as cider – but maybe making it a bit more premium, which comes down to the honey and sustainability angle as well.”
What’s more, finding staff had been a “real challenge” at Gosnells' new taproom on the Bermondsey Beer Mile, central London, which launched on 2 October.
“We’re fortunate to have some reasonably loyal staff, but it gets harder as we look to expand and need more staff as we get busier,” Gosnell said. This problem was exacerbated with wages going up due to inflation.
He was also worried about consumers cutting back on spending. “All the nervousness and skittishness in the industry is not irrational,” he said, “it’s because people are facing a massive cost-of-living crisis.
In light of this, the meadery was working closely with operators to see how they could give customers a reason to come out to the pub rather than just to drink. This included hosting events and talks.
