The collapse of By the Horns Brewing, a once-prominent craft beer brand previously stocked by Sainsbury’s, highlights the significant challenges facing the craft beer industry in the current economic climate. The company’s founders, Alex Bull and Chris Mills, attributed the demise to a confluence of unfortunate events, including the failure of two key business partners, Flavorly and Bier Nuts, resulting in a £50,000 loss. This financial blow was exacerbated by Sainsbury’s decision to remove By the Horns products from their shelves, reportedly to accommodate a larger beer company seeking increased shelf space. This action significantly reduced By the Horns’ sales volume. Further complicating matters was a 30% rent hike on one of their facilities. Despite initial hopes for recovery in 2024, delays in decisions by supermarket buying teams and the subsequent collapse of their contract brewer, And Union, owing them another £50,000, proved insurmountable. The cumulative effect of these setbacks forced By the Horns into liquidation, ceasing trading in January 2024 and formally entering liquidation in February.
The closure of By the Horns underscores the precarious position of many craft breweries struggling with rising operating costs, declining consumer spending, and increasing competition. The craft beer sector, once characterized by rapid growth and innovation, is now facing a more challenging reality. Smaller breweries, often operating on tighter margins and with less access to capital, are particularly vulnerable to economic downturns and market fluctuations. By the Horns’ experience exemplifies the domino effect that can occur when key partnerships fail and market access is lost. The withdrawal of a major retailer like Sainsbury’s can significantly impact a smaller brewery’s sales volume and overall viability.
The news of By the Horns’ closure has been met with disappointment by loyal customers who appreciated the brand’s distinctive craft beers. Many voiced their sadness online, expressing their appreciation for the quality of the beers and lamenting the loss of another independent brewery. The closure highlights the broader concern about the potential loss of diversity and choice within the beer market if smaller, independent breweries continue to struggle. Consumers who value the unique flavors and character of craft beers are worried about the homogenizing effect of larger corporations dominating the market.
The challenges faced by By the Horns are not unique within the craft beer and wider hospitality sectors. Several other breweries and hospitality businesses have faced similar difficulties in recent times. Rising ingredient costs, driven by inflation and supply chain disruptions, have squeezed profit margins. Simultaneously, consumers facing their own financial pressures are cutting back on discretionary spending, including dining out and purchasing premium beverages like craft beer. This reduced consumer demand further exacerbates the challenges for breweries already grappling with higher operating costs.
The increasing dominance of larger beer companies also poses a significant threat to smaller breweries. Larger companies often have the resources to negotiate better deals with suppliers, secure more prominent shelf space in retailers, and invest heavily in marketing and promotion. This makes it increasingly difficult for smaller breweries to compete, particularly in gaining access to key retail channels and attracting consumer attention. The case of By the Horns, where a larger company allegedly displaced their products on Sainsbury’s shelves, illustrates this challenge vividly.
The closure of By the Horns serves as a cautionary tale for the craft beer industry. It highlights the importance of robust financial planning, diversified sales channels, and strong relationships with key partners. Smaller breweries need to be agile and innovative in their approach to navigate the current market challenges. Exploring alternative sales channels, such as direct-to-consumer sales and online platforms, can help reduce reliance on major retailers. Building strong relationships with local communities and fostering a loyal customer base can also provide a buffer against economic downturns. Furthermore, collaboration and resource sharing amongst smaller breweries could potentially help them achieve economies of scale and increase their bargaining power with suppliers and retailers.
The future of the craft beer industry remains uncertain, but the challenges faced by By the Horns and other breweries underscore the need for adaptation and resilience. While the industry faces significant headwinds, the continued demand for high-quality, unique beers suggests that there is still a place for smaller, independent breweries. However, their survival will likely depend on their ability to innovate, adapt to changing market conditions, and build strong, sustainable business models.
