As we approach the end of this turbulent year, we just wanted to check in to give you an idea of how things have been going at Siren. Grab a beer and get comfy, it's a long one!
It is nearly the end of 2020. My last update was March this year, and I have to apologise for the lack of communication. I hope you will appreciate this has been a challenging year for us, as I’m sure it has been for all of you. We have worked incredibly hard to ensure we are doing all we can as a business; to find as many opportunities as we can with a limited team in a tricky environment. However, we take our responsibility to you, our shareholders, very seriously and know that we must do better.
We entered the first lockdown in a worrying position. 85% of our business is/was to the on-trade with keg and cask formats making up the lion share of our output. We had over £350K of stock packaged, 21 tanks full of beer worth around £250K and over £650K owed by customers. In addition to that, we had many more customers who had received deliveries from us in the lead up, unable to pour it and desperate for return or compensation options. Then of course we also had landlords that wouldn’t defer any rent, and clearly no customers to actually buy anything!
It was an unenviable position, but we dug in and reacted in the best way we could. With the help of the furlough scheme, our bank and an absolutely fabulous team we managed to find a way through. Once again much of the support came from you, our investors, and in no small part the fans we have built up over the last nearly 8 years.
We also have to thank our webshop and the team behind it, which frankly, went bananas. From a base of £10-15K/month average it shot first to £90K a month, and actually peaked at £185K. Along with being very valuable business, this also gave us a great basis to work around in terms of production planning and all the knock-on effects of that. So we went to work reconfiguring the team, our offering and looking for as many new customers as we could. Thanks to the furlough options I’m pleased to say we haven’t made any redundancies.
Beer52 were a great help for us, along with many pubs and bottle shops that were allowed to trade, many in innovative and inspiring ways. (Our Stories Behind The Stats series looked at some of these in more detail, check them out here.) We did have to credit plenty of beer to customers, and did our best to help as many small businesses as we could, but minimised the impact as far as possible.
With all these pressures in the middle of a pandemic, releasing on average two new beers a week and operating with a reduced team, we probably had enough on our plates. So that’s when we decided to unveil Lumina, along with the single biggest launch campaign we’ve ever undertaken. Now this beer was actually months in the making, previously being fine-tuned under the guise of ‘Refractions’. In many ways it was the culmination of years of work on the Suspended in… series and really dialling in what we can achieve with hop-forward low abv beers.
Unable to launch our core beer in the way that would have felt most natural - sharing pints in our favourite pubs across the country - we instead tried to create a plan that would be interesting and engaging and fun for those spending a lot of time at home, and would enable us to get cans into as many people’s hands as possible. Lumina’s name, design and story was inspired by the celestial, so that was our starting point.
We teamed up with a local independent PR company who gathered a host of the leading writers and broadcasters in the UK on a virtual tasting of the beer on launch day, along with a masterclass in stargazing with Dr. Becky Smethurst, an astrophysicist and research fellow at the University of Oxford. We then scaled up this concept to host our own stargazing evening, with around 1,000 customers joining us in picking up the mixed cases to get involved. Seeing people out in their gardens or local parks, coming together to share a beer with us was a really proud moment. Somewhere in all of this we also developed what might be the most niche brewery merch ever in our Siren branded planispheres. 2020, eh?
The launch went extremely well. We’ve already shipped over a quarter of a million cans and Lumina has just hit shelves in Waitrose stores across the country. As I write, it is still outselling Soundwave on our webshop! (Soundwave fans - time to up your game!).
On the production side, we had some time with reduced brewing compared to normal, and this allowed us to complete a bunch of projects to ensure that we are fully set up to run at full speed as soon as we can. Much of this has been made possible by the crowdfunding raise.
To this end, we have installed two new 250HL external tanks and a hop cannon to make them sing, built a brand new lab facility, installed a new state-of-the-art CIP system, brought in new CO2 tanks to ensure canning can run at full capacity and most recently invested in a new steam boiler (as far as the brewers are concerned, the most important investment, and nearly the most expensive).
Excitingly, we have just taken delivery of a new water treatment plant which could hopefully be commissioned before the end of this year. This will allow us to choose our water profile needs by beer style, and will help us improve the quality in particular of our hazy IPAs. The water in Finchampstead is very hard, and you cannot take out the things you don’t want in a water profile, you can only boost what you do want. Again, this is a big investment, but one that we feel helps us travel along our mission of brewing the best beer we possibly can.
It hasn’t all been plain sailing. As I mentioned, we have had to credit a lot of beer. We have also sadly lost some great and longstanding customers who just could not make it through the lockdown, and as such have we written off a lot of bad debt already, with more possible.
In some ways, despite having been there and done it before, Lockdown 2 has been much harder than the first one. Many pubs are just not bothering to open, having spent fortunes on becoming covid secure, taking on extra staff, and then being hit with a ridiculously bad bit of policy with the 10pm curfew. Understandably many took the view to take the furlough money and see what happens next.
Siren owes a debt to the on-trade, and many publicans have become close friends. It is brutally hard to watch how hard this is affecting the hospitality sector. Once again, when they open we will work hard with them to build solid plans to help and support their businesses and do what we can to make sure that as many as possible come back from this pounding.
However, let’s finish on a positive. Here we are in November, we have Caribbean Chocolate Cake in the fridge, a new flagship beer doing incredibly well, our take on a Cali IPA going very well, our very first advent calendars selling out fast and a Tap Yard expansion plan about to begin. I’m cautiously optimistic that our industry can bounce back, with Siren of course playing a strong part.
I would like to take this opportunity to extend a really heartfelt thank you from all of the team at Siren. It is because of you, and your advocacy that we have managed to weather all that has been thrown at us this year. I would also like to wish you all the best for the remainder of this year and a cracking Christmas.
