Cloudwater brew company

06.06.17

Stepping Out Of The Echo Chamber

I think I’d be right in saying the results of the EU referendum last year were pretty shocking to most of us, because most of us live, for good reason, in circles of largely like minded individuals. I felt gutted after the results came in, not just because of the immediate and very real affects an instantly devalued pound had on Cloudwater, but because I was down about being so out of touch with such a lot of my fellow countrymen. The echo chamber is real.

The few times I have chosen to speak about matters not strictly focused on beer, whether on our Twitter account, or our blog, I have had at least a few replies along the lines of – “just stick to beer, man!” or “Leave politics to the politicians!” or “I don’t want to read about politics on here, so just stick to beer stuff.” No thanks. The bubble is there for the bursting, folks. Political decisions affect every single one of us, and certainly affect the beer industry as much as any other. In this blog post I’m going to do my bit to communicate how the various manifestos, parties, and personalities in front of us all in this week’s election look from our point of view. What is written below isn’t the truth, but it is our truth. Do with it what you will – affirm your beliefs, challenge us from a view point we don’t yet see, use it as a starting point to discuss various views with your friends and family, but whatever you do, please get out on Thursday and vote for whatever you believe will make the UK a leader in the modern world, whatever you believe will set us on a course to make all our lives better. Believe in something good, and stand for it.

I can think of no more effective way of stepping outside my own echo chambers than writing this post. I know our customer base is broad (which is an excellent thing), and I know there’ll be customers that feel the views expressed here aren’t aligned with theirs, and that’s perfectly ok – we have shared values that run deep regardless of values that are or appear different at their core. I feel duty bound to use this platform, the biggest platform we have, to engage in discussion, spark debate, and communicate our views. Why not just share my own ideas, and the ideas of the team in my own personal online spaces? Well, you see, Cloudwater is our life. Because we love what we do it consumes the majority of our waking lives. It’s the team I built and now support, and the change I wanted to see in the industry. A good chunk of our ideas are my ideas. There’s only the faintest line between how we work, and how I work, or how we think, and how I think. And as I said before, there isn’t a we and me, an us in work, and an us out of work. We are who we are, from the moment we wake to the moment we sleep.

A key point of this post is to look at our needs and hopes, and some of our concerns, and then as squarely as we can at the pledges each party has made and how it might all fit together for us.

I’d like to start by addressing the questions posted by my team mates.

Al Wall (Lead Brewer and Brewery Engineer): How has the devaluation of the pound affected us? Will we have to put our prices up?

As I explained in a post immediately after the pound slumped, as predicted by the very experts the leave campaign decried in the run up, we have seen the costs of our ingredients and packaging materials rise by up to 20%, and stay at new higher prices. In order to shelter as many customers from those cost rises, whilst still working towards turning a profit (which I’m glad to say we have seemed to have started achieving in the first months of this financial year), I decided to look anew at how we packaged and sold our beer. We dropped cask, which was making us barely any profit for all the man hours, tank occupancy, and ingredient costs. We’re also focusing on developing our self retail capabilities, and have recently brought our online store in house to reduce the costs of selling beer direct online. I can also announce that we’re looking to grow our brewery tap hours and capacity quite considerably in the coming months. More on that when I can, but all these measures were taken to absorb as much as we can ourselves, and shelter our end customers from price rises.

Jay Krause (Lead Brewer): The issue of immigration isn’t an easy one to address, but so many of our colleagues in the brewery, our friends, and our family come from overseas (not to mention many other people working in the industry).
Following on from this Claudia Asch (Lead Packaging) adds: We are already so short of nursing staff that immigration restrictions will surely cause collapse/calamity in hospital and social care. What about in farming? Are the indigenous inhabitants of Cornwall willing to harvest their produce for a pittance? Food price rises seem inevitable.

Our team at the brewery is made up of 13 full time staff, 3 of whom were not born in the UK, but have settled here and are currently working hard within Cloudwater to make the UK beer scene even better. Outside of our team, our partners, extended families, friends in the industry and outside the industry are from all over the world, and we all feel better off for it. Any development towards an anti immigration stance, or furthering of anti immigration rhetoric would negatively affect every single one of us in the team, so we’re all for the UK being home to anyone that wants to make a good go of bettering themselves and society here.

Immigration has become such a difficult issue because some politicians, and most of the press have made it a narrow, binary topic. Immigrants aren’t a homogenous group of people. From seasonal workers that make putting a diverse range of UK grown food on our table possible, to PhD level graduates that make the UK home of their research and all the practical implementations that come forth by way of new technology, medicine, businesses and more, our way of life is underpinned in many ways by the contributions of people that came here to make a difference.

Reducing immigration to a topic that wraps up and contains all the ills in the country conveniently allows politicians, the media, and even some business leaders to dodge responsibility for the job losses, industry failures, and resulting economic suffering so many currently endure. For example (and in the interests of clarity, my wife and most of her friends are medics), the NHS isn’t under pressure right now because of immigrants overusing our hospitals. In fact it is significantly staffed by immigrants doing all the things most of the rest of us don’t have the stomach for, or couldn’t sleep at night having experienced. The strain the NHS is currently experiencing is caused by a lack of adequate funding from nurse training bursaries to equipment maintenance (such as the decision to drop service from Microsoft that resulted in the recently successful malware hack), profits directed to private contractors rather than foundation trusts, and misguided, some might say arrogant politicians that put their agenda before the very highly trained, compassionate experts we all trust with our lives. The diagnosis of those inside the NHS is the problem is a lack of resources, and the cure is a government that values and supports those on the front line of health care and every person in the UK seeking rapid medical care.

The diversity within the beer industry is impressive (though of course we can all do better to make more positive and welcoming spaces for women, people of colour, LGBT+ and non CIS gender folk into this wonderful community), and is undoubtedly one of the pillars that create and support the vibrant outputs we cherish.

Robyn Bell (Cellar Tank Manager) asks: Could you cover the importance of being politically engaged, the demise of proper discussion and debate in an era of echo chambers and why you choose for us as a brewery to be vocal about the impacts of current policies. I'm proud of us for ‘not just shutting up and making beer!’
Emma Cole (Accounts) adds: This is an important issue - please cover why the 'Just stick to beer' stuff shut down attempts won't work.

The reach of political decisions are as broad as they are deep. Politics informs which news is most visible. It’s behind the scenes trawling our internet activity, and in our homes as a force legitimising or questioning our preferences. Politics is the reason Manchester has seen a disturbing growth of homeless people, food banks, and racial attacks and slurs in recent years. Politics determines how clean the air we breathe is – none of us are outside of the influence of politics.

We live in a world informed and coloured by politics. There’s no disconnecting from the it, and so we have a choice – we accept what comes, as if we are subordinate to our political leaders, or engage, lobby, fight, and advocate for the change and freedoms we want to see in our world, as if our political leaders are at our service. I fear we have become used to political action being a thing that happens in a polling station and through likes on social media, and political opinion something shared only between like minded individuals for fear of offending anyone not interested in our views, or politics itself.

I know there are people out there that think this is a foolish post. Business and politics don’t mix, apparently. Well, we’ve evolved. We’re just a brewery, true, but we’re not just brewers. We’re thinkers as much as we are drinkers, and we don’t find any pleasure in the thought of pretending the only thing we care about is beer.

Now, for some questions from Twitter.

Have we been finding more political interest and engagement in recent months?
Most definitely! From our tap room to events, to casual drinks with friends and customers, our conversations are more political than they have ever been, and it’s wonderful. From people that challenge us to put our point across better in the first place, to people that challenge our views at their core, we have relished engaging in sometimes heated, always civil discussions of how we really take a step forward as a country.

Do you think Labour is the party of small businesses?
From the manifestos in front of us, and voting records of those vying for power and influence, we largely agree that Labour and its people seem to be more on the side of progressing and supporting small businesses.

How can we address the problem of echo chambers?
Further to the thoughts above, we should all support political discussions taking place throughout our lives, and across our interests. To section off parts of our life from politics is absurd. There isn’t an area of our lives politics fails to exert some influence on.

Let’s all commit to doing everything we can to make political discussion an important part of who we are and what we support, irrespective of whether it’s the sort of politics we prefer.

Where do you stand on Small Brewer’s relief?
We are firmly in support of the current small brewer’s relief program, and would advocate extending the support it offers.

From our point of view, SBR is a measure designed to help smaller breweries, without the advantages of scale, and economies of purchasing and production, to produce beer alongside the bigger guys without a significant financial pressure, or greatly compromised profit margins that would stifle growth or stability.

The government could also look at what could be done alongside SBR (such as duty relief based on year on year increased in production volume) to incentivise those breweries intent on growing to meet demands.

Are people right to suggest you should just stick to beer and leave politics out of your social media presence?
Nope. Other businesses can and do choose to avoid politics entirely, but that doesn’t mean it’s the way it has to be for all of us in the industry. We already exist to contribute to positive changes in beer, so there’s an element of activism about our work already. Why stop there? Why pretend that all we care about is beer? We can move beyond the worries, and the fears that sharing our views and deep concerns is a bad thing.

How would we deal with a rise to 26% corporation tax?
An increase in the tax we pay from profits we make would be welcome if the additional taxes raised were spent on making people’s lives better, and not funding wars, or other such nonsense. Has tax ever been a problem, or has the problem been what our taxes were spent on? Should the next government’s manifesto be aligned with the values we hold dear of equal chances for all, an increase in corporation tax would serve to further our existing goals.

How would we deal with paying for healthcare, as is common in the USA?
Decreased funding for the NHS and its services has already negatively impacted our staff directly with waiting lists for services lengthened, and access restricted.  Although we pay at least a living wage, and as much as we can far, far better than that our employees would struggle immensely should they have to start providing themselves with private healthcare insurance.  If such insurance became our responsibility we in turn would likely find it difficult to secure coverage for our team that matches the service they currently have access to under the NHS.

The average employer-sponsored health insurance in the US currently costs around £5,000 per employee, which for us at our current staffing level would amount to an annual spend of £65,000. We’d have no choice but to pass these costs on, or drive even harder towards self retail, which may negatively impact your local bar or local bottle shop in the long run.

Would an increase in employer NI, reduced corp tax allowances and increased corp tax impact on your ability to recruit and invest?
If the result of higher contributions and higher corporation tax was a better NHS and better UK wide infrastructure we would benefit as a whole. My reinvestment and recruitment decisions are made in light of our current and potential prospects, so a positive economic outlook, and the broadest economic growth (putting more money into the pockets of more potential customers) are far more important strategy factors to me than this year’s corporation tax and contribution liabilities.

Of course, more tax paid on our profits means less money to reinvest, but there’s a hard limit to how far we can get on profit reinvestment alone.

How much does the UK independent brewing scene rely on a growing UK economy?
I believe that the growth of our economy makes it easier for our customers to justify spending on the whole, which in turn supports developing and growing businesses such as Cloudwater, new start ups, as well as expending established breweries too. Any contraction or stagnation in the economy quickly creates uncertainty and worry, which inevitably impact all but the most wealthiest people’s spending decisions.

That concludes our team and Twitter sourced questions. Now let’s look at some of the manifestos individually, and measure up against our specific industry concerns which manifesto is likely to help or hinder us.

The key areas that concern us at Cloudwater are:
• Materials cost, both affected by the strength of the pound, and the global environment.
• Team wellbeing, affected by their cost of living, access to world class health care, job security.
• Customer well being, affected by their cost of living, access to world class health care, job security.
• Access to skilled workers from the EU or beyond, affected by immigration policy and tone.
• Access to the single market and the continuation of tariff free exports.

Material Costs

The biggest factor impacting our materials cost is Brexit. A pushy stance or tone against 27 member states, with very little incentive to accept any demands, can only result in a bad deal for the UK. I fear that a hardline stance will see us face further increases in materials cost, and would sooner or later force us to increase our prices, or look to make cheaper beer. We’ll be voting for the party that pledges to put the UK economy and tariff free access to existing markets front and centre in Brexit negotiations.

The second biggest factor impacting specifically our ingredients is the environment. Without adequate care and stewardship we face increasing incidences of everything from suboptimal growing conditions, to crop failures and declining access to some of our favourite most ingredients. Our vote in this regard will be for the party that pledges the greatest level of care of the environment. 

Team and Customer Wellbeing

Returning  to Brexit once again, not only do our materials costs rise when the pound falls, but our costs of living rise considerably too. The UK imports a considerable range and volume of food from countries with climates suited to growing some of our favourite cereals, fruits, and vegetables, as well as goods from near and far. We’ll be voting for the party that pledges to put the UK economy and tariff free access to existing markets front and centre in Brexit negotiations.

The NHS, and all its supporting services underpin our collective sense of well being and health security. In our short history we have directly and indirectly (through our families and friends) needed emergency eye care; A&E; mental health services; dentist services; treatment for a brain haemorrhage; skin check up and skin cancer prevention; paramedic care and treatment for a heart attack; heart attack rehabilitation; treatment of tropical disease; back injury treatment; and countless GP appointments to cover everything from contraception to acute mental health care. I can not imagine the UK, nor our lives as we know them, without the NHS in a government funded and supported state. We’ll be voting for the party the pledges to fund the NHS according to the NHS’s increasing costs, and credits front line medical staff with the insight and professional knowledge they have to offer.

Job security in the brewing sector is something I’ve not had to assess in detail so far in the life of Cloudwater, as the industry appears to fare quite well in both difficult and not so difficult economic circumstances. However, should the government in power during Brexit negotiations choose a hard line approach that rocks the UK economy enough to cause another recession, the UK brewing industry, and many other industries dependant on economic positivity and growth are likely to suffer. During the last recession countless friends and relatives saw their standard of living drop due to a decline in construction (which has contributed to affordable housing shortages up and down the country), decreases in funding across the public sector (contributing to increases in waiting times, and pressure on resources in the NHS, and a decrease in effective rehabilitation across the prison service).  We’ll be voting for the party that pledges to put the UK economy and its stability at the heart of their Brexit negotiations.

Access to Skilled Migrant Workers

Whilst there are fine and promising students of brewing science graduating from education programs at the University of Nottingham, and Heriot-Watt University, the UK brewing industry already benefits from skilled and experienced brewers and production staff, through to brand ambassadors and social media from all over the world. Our long tradition of brewing in the UK is not among the most technically advanced, leaving modern breweries devoting time and resources to on the job training and development, alongside recruiting of skilled and educated professionals from Europe, the Americas, and beyond.

It is vital that we do not lose the ability to attract and employ skilled migrant workers, as the rapid growth and developments already at hand in the UK brewing industry are vital to our collective future successes. Our commitment to training and progressing our British born workforce requires keen leadership and technical skills, and in an ever busier and more competitive marketplace we must maintain barrier free access to some of the world’s most talented, skilled, and educated brewery professionals.

An important point to make here is that not only does the UK’s immigration policy play a central role in determining how and who we can recruit, but the tone of the UK government (and the media who often follow in tow) is important too. We must not just be open to the contributions of skilled and vital migrant workers, but be welcoming of everyone making a contribution to our society and economy too. The demonisation of migrant workers must end, and in its place a rational and broad ranging understanding of the contributions, both actual, and potential, arise in its place. We’ll be voting for the party that supports access to skilled and seasonal migrant workers, and that seeks to cease irrational, and negative language around immigration too.

Access to The Single Market

A good number of the UK’s most highly regarded, and largest modern breweries export anywhere up to 50% of their output abroad, with most of their exports heading to the EU. Can you imagine the increase in competition should exports suffer through trade barriers, tariffs, or other impediments imposed on goods sold into the EU? Some less well established breweries may face incredible challenges to get their foot through the door and make their own contributions to the scene if more established brands suddenly had to find 10-50% more UK custom.

On the other side of the above concerns are the current opportunities for UK breweries to grow into export markets all over the EU. From France to Poland, Sweden to Spain, the EU is home to some fine and leading traditional breweries, but very few countries can currently compete with the range and quality of modern beer currently produced here in the UK. Although we at Cloudwater export only a few percent of what we make currently (mostly for events, mostly to see how we stack up against excellent local breweries in other scenes), we see demand rising for our beer across the whole of the EU, where lower beer duty rates and a lack of local modern beer drive interest and potential custom in our direction.

We’ll be voting for the interests of the UK brewing industry in maintaining tariff free and unrestricted access to the single market.

Conclusions

Our working mission is to make excellent beer, by making excellent choices. The choice we’re making on Thursday is to vote for the change we want to see in the UK, the change we think will make the most positive impact to our industry, to our team, to our customers up and down the country. We’re voting for the party whose manifesto most closely represents the progressive vision we share for this country, and that is backed up by its leaders voting record, calls to action, peaceful protests, and over 30 years of service to his constituents.

For those of you unsure which vote to make, please spend some valuable time testing your alignment with the various manifestos here – talk to friends, family, co-workers, and beware of political loyalties and bias in the media.

For those of you aligned with different political values, know that whilst we see different routes forward, we value your contribution to debates, your critical thinking, your realignment based on policies and practices over parties and political personalities.

For those of you suffering apathy, please know that your vote counts –even if you are positioned to vote for a party that is unlikely to change a safe seat, a drop in margin is never ignored.

Paul, and the team at Cloudwater.

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