The ‘Growing the Drinks Industry in Wales Strategy’ celebrates the work of drinks companies across Wales to date – and sets out the challenges and opportunities for the coming years.
As a rural country it believes a focus on nature and sustainability can help set it apart, as can collaboration between businesses in a small but growing industry.
F&B a 'rising star' in Welsh economy
Often overshadowed by its larger neighbours England and Scotland, Wales is home to around 3.1 million people. Three national parks cover 20% of the country's landmass; and yet its capital, Cardiff, is just two hours by train from London.
The food and drinks industry is considered a 'rising star' in the Welsh economy - the Welsh government wants to increase sales by 30% to £7bn ($9bn) by 2020.
The Welsh drinks industry, meanwhile, has a turnover in excess of £800m and a Welsh retail sales value of over £950m. It employs around 1,200 people.
In 2017 the Welsh Drinks Cluster was established by the government to raise the profile of the country’s drinks sector and lay the direction for the industry. This has been followed by the launch of the Growing the Drinks Industry in Wales Strategy.
What to watch in Wales: craft beer, spring water and wine
The sector now covers a broad range of categories including beer, cider, wine, spirits, bottled water, soft drinks, fruit juices, dairy and non-dairy drinks and hot drinks. Companies range from small independent companies to large international establishments.
There has been significant growth in the sales of spirits such as gin and rum, and sales growth of no and low alcohol beer has outperformed others in the beer and ale category.
While Scotland and Ireland have made name for themselves in whisk(e)y, for Wales it is perhaps wine and water which offer the most potential. The country’s fresh water means there are a number of mineral and spring water brands (sales in the mineral water category already exceed £15m); while Wales’ developing wine sector is described as a ‘hidden secret’.
“In the soft drinks sector, bottled water sales and mixers outperform the larger areas of soft drinks (such as carbonated drinks) due to the consumer’s ongoing and increasing interest in health & wellbeing – this is good news for Wales given its strength in depth of water companies such as Princes Gate, Montgomery Water and Llanllyr Source,” Andy Richardson, chair of the Food and Drink Wales Industry Board, told this publication.
In alcohol, beer dominates the sector, followed by spirits and wine.
“From a business and producer perspective, the size of the beer trade and craft brewing trends have led to an explosion of micro-small breweries in Wales over the last 10 years putting Welsh Brewers in pole position to capture more of the home market, currently dominated by imported beers from England and abroad,” said Richardson.
While overall producer numbers of spirits and wine in Wales are small compared to beer, there is great potential for this to grow. As with the growing English wine sector, Wales hopes to take advantage of the growing attention on cool climate wines.
“Wine in particular, has been grabbing many headlines in the UK over the last year due to its high quality positioning – this success has led to exciting levels of interest from Welsh farmers in considering viticulture as a future diversification option, which in turn may lead to even greater future potential for Welsh Wine due to the additional volume that may produced by new entrants,” said Richardson.
The last year has seen a number of events spearheaded by the Welsh producers and associated organisations and projects – such as the Welsh Vineyard Association and the Welsh Wine Strategy and Welsh Wine Adventure – such as press and trade tastings and a presence at events such as the Royal Welsh Summer Show and London Wine Fair.
And such collaborative working – both in wine and other categories – is one of the keys to sustainability growth and success for the Welsh beverage industry, says the strategy.
Some Welsh producers
- Tiny Rebel – Newport brewery
- Radnor Hills – mineral water and soft drinks manufacturer in Powys, and one of the London Stock Exchange’s ‘1000 companies to inspire Britain’.
- Aber Falls – the first distillery to open in North Wales since the early 1900s, with a range of small batch and flavoured gins
- Ancre Hills – Monmouth winery
- Princes Gate – spring water from Pembrokeshire
- Llanllyr Source – natural spring water
- Montgomery Water – spring and mineral water sourced from former volcanic hills in Montgomeryshire
- Rhymney Brewery – Welsh brewery with visitor centre
- Hensol Castle Distillery – gin distillery and visitor centre
- White Castle Vineyard – a five acre vineyard based in Abergavenny, South Wales.
Opportunities: water and sustainability
As a largely rural country, Wales believes its pure water supplies can help set it apart from others, while increasing its focus on sustainability can also be a point of differentiation.
“Wales has access to pure, fresh and sustainable water supplies that provide the basis for our drinks industry," said Richardson.
"This together with innovation in product development and branding puts Wales at the forefront of the sector.
“Furthermore, Wales is a country where well-being and sustainability are embedded in the way we work which sets us apart from many global drink companies.”
The Strategy says that ‘greening’ of the whole drinks industry in Wales could create a key advantage for the sector.
“If sustainability becomes a key message for all producers, by looking closely at all aspects of a circular economy, the industry may improve, through collaboration, productivity across the whole supply chain,” reads the strategy.
“This would result in a beneficial effect on overall profitability across the sector, while changing the marketing conversation towards environmental advantage for sustainability businesses in this sector.”
Challenges: skills and sugar tax
Some of the obstacles faced by Welsh drinks companies include skills shortages, access to energy, changing consumption patterns and the decline of pubs and traditional on-trade outlets, according to the strategy.
Other factors included regulatory issues such as the sugar tax, minimum pricing on alcohol and consumer attitudes to plastic.
In response to the concerns over a skills shortage, engagement has begun with the National Skills Academy for Food and Drink. This collaboration will result in a bespoke provision of technical training requirements for Welsh brewers in partnership with Brewlab, a provider of training and analysis services for the brewing industry.
The Strategy has set out four priorities to work on: innovation, scale up, marketing and skills.
The next step for the Drinks Cluster will involve working within Special Interest Groups for each industry sector to develop an identity and marketing strategy. With collaboration being key, it hopes it can engage 50% of drinks producers in Wales in the cluster in the next 3-5 years.
The aim for Wales’ beverage industry is to work together to build Welsh companies and brands both at home and abroad; improve skills and knowledge across the sector to support innovation and increase the environmental performance of the drinks industry.
The ultimate aim is to achieve its vision as set out in the strategy: “A thriving and developing Welsh drinks sector comprising of innovative and energetic producers of distinctive, high quality drinks”.
Want to be part of the Welsh Drinks Cluster? Contact firstname.lastname@example.org
Pictures: getty: boldg/backyardproduction/william87/johnnylye