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Firms behind ASDA's Scottish craft beer deal seek UK expansion

The team that helped drive a £850,000 supermarket deal for some of Scotland’s best craft breweries are planning to roll out their innovative business model across the UK.

Published: April 25, 2016
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Last week, supermarket giant Asda announced a major deal with the Craft Beer Clan of Scotland, a collaborative trade and export body that represents 25 craft breweries.

Breweries such as Lerwick  (pictured), Loch Lomond and Eden Mill were part of the deal. Picture: Lerwick Brewery

Breweries such as Lerwick (pictured), Loch Lomond and Eden Mill were part of the deal. Picture: Lerwick Brewery

In the deal, Asda will stock 18 lines from nine breweries under the Craft Beer Clan banner, including the award-winning Loch Lomond Brewery, Eden Mill and WEST Beers. It is a significant expansion of Asda’s craft beer offering and a major breakthrough for the micro-breweries.

The deal was driven and managed by a collaboration of business consultancies, Ross & Brown and 121 Business Solutions, who approached the Craft Beer Clan of Scotland after identifying an opportunity within Asda’s premium bottled ales category.

Retail experts Simon Ross and Craig Brown, alongside Scott MacDonald of 121 Business Solutions, recognised that the Craft Beer Clan’s close contacts with Scottish brewers meant they could offer Asda significant cost-savings and easily overcome the challenges and complexities that smaller producers face when working with major retailers.

The team are now looking to offer their collaborative model, in which they share skill-sets, industry knowledge and cross-category expertise, to small producers seeking listings with major retailers and who wish to benefit from their bespoke account management services.

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Mr Brown, managing director of Ross & Brown, explained: “What is acceptable when delivering to an independent retailer is a world away from dealing with the major multiples. From having images available online for home shopping to the complexities of supply chain and order fulfilment, it can be difficult for a small, individual producer to deal with multiple retailers and their requirements.

“The journey doesn’t stop with a listing. Remaining listed, having a joint business plan with the retailer and a clear promotional strategy are key alongside the technical analysis of sales data, by store, by line and by week to ensure that availability is maximised for the consumer and that the brand is playing an active part in driving sales.”

Following on from the deal, which took only 12 months from conception to completion, the industry experts are also looking at other "craft" or niche categories as well as taking the Craft Beer Clan model to other retailers and multiples.

Mr Brown said their strong relationship with Asda’s local sourcing team, including the retailer’s regional buyer for Scotland Brian O’Shea, had been critical to the deal. He added: “Building relationships and a network like we have at Ross & Brown doesn’t happen overnight; it comes through years of industry experience and building a reputation with retailers, suppliers and senior food and drink industry professionals.”

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Scott MacDonald, director of 121 Business Solutions, agreed that being able to draw on his firm’s and Ross & Brown’s collective expertise had been critical. He said: “From our own experience, we knew we could deliver an acceptable and sustainable commercial agreement between Asda and the Craft Beer Clan.”

Key to the deal’s success had been the parties’ collaborative approach. Mr MacDonald added: “It's efficient for everyone in terms of cost, time and physical resources. With R&B and 121 handling the commercial relationship on behalf of the brewers, this enabled them to focus on ensuring their products met the needs of the consumers."

Simon Ross, also managing director of Ross & Brown, said the deal had been “a perfect match” for all four parties, and was evidence of their successful synergy and how good an idea the inception of the Craft Beer Clan was into such a popular category.

Mr Ross said he hoped the end value of the deal would exceed £1 million per annum and give significant visibility to Scottish craft breweries, who without the Craft Beer Clan “would never have had this fantastic opportunity to sell their products to such a large customer base that Asda provides”.

He added: “Asda now only needs to deal with one account management team for all the Craft Beer Clan breweries and that is Ross & Brown. This synergy does not exist within other multiples and it’s helped position Asda ahead of its competitors in regards to the craft beer category.”

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Chris Miller, director of the Craft Beer Clan of Scotland, said: “The Craft Beer Clan works hard to promote Scottish craft beer at home and abroad, and I was delighted when Ross & Brown and 121 approached me about Asda, enabling us to put together a category range reflecting the modernity of Scottish craft brewing by region, beer, type and format.

“It is refreshing to work with like-minded brewers of integrity who grasp the concept of collaboration to mutual benefit.

"To bring so many new brand listings to the retail environment across Scotland has been a great opportunity for the Craft Beer Clan as we continue to build on Scotland's reputation as a world-class producer of drink.”

Brian O’Shea, Asda’s regional buying manager for Scotland, said: "Asda has worked closely with the Craft Beer Clan, utilising their expertise in the market and Scottish brewery contacts to secure a range of flavoursome unique beers that offer customers drink experiences with authenticity. This is a fantastic development that not only gives great choice to our customers but also further strengthens the outstanding reputation of Scotland’s drinks and drink producers."

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