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Need an idea for a diversification? Use your family’s talents and your farm’s natural resources, and you can’t lose…

The saying ‘good things come in small packages’ could have been created with Church Farm Brewery in mind. Proving that diversification doesn’t need to be carried out on a huge scale to be successful, the Reynolds family has pooled its individual talents to turn fortunes around.

Church Farm near Warwick was forced to reconsider its dairy production and distribution business after “supermarkets decided to give away milk for free” in 2011.

“The dairy business began to shrink and margins got tighter and tighter until we just couldn’t compete with the supermarkets anymore,” Jo Reynolds said.

Jo’s husband Andrew had been experimenting with beer production for a few years on a purely personal basis. “He was making home brew for his friends for when they would come round to watch the rugby in his ‘man cave’ on weekends!” Jo explained.

When eldest son Sam returned from travelling around the US he encouraged his parents to take their hobby more seriously after witnessing the rise in craft beer over the pond so they started experimenting with flavours to create something special.

“The end result was fantastic so we asked our local pub if they would like to try it – they became our first customer and today our beer is stocked in 280 pubs,” Jo said.

Initially the family decided to make savings by repurposing the farm’s milking equipment into brewing kit. Fermentation vessels were fashioned from bulk milk tanks, the milk receiving tank was turned into a mash tun and the bottling machine turned its focus to a different kind of pint.

Together, the family pooled its natural talents and utilised the 80-acre farm’s natural assets to create a holistic business which, in turn, sets them apart from the competition.

Accountant Sam gives financial advice and provides projections to steer the company forward, leaving Andrew and Jo more time to focus on brewing and sales respectively.

Youngest son Harry’s degree in biological sciences inspired the purchase of laboratory equipment to allow the business to carry out its own testing, while also providing the service for surrounding breweries.

Spent grains are fed to the farm’s 50-strong herd of beef cattle and an on-site borehole provides high quality water.

“Beer is 96% water, so the fact that we can use our own straight from the ground, and it only needs to go through a filter, is a huge point of difference,” Jo explained.

“When we were milking cows our water bill was about £14,000 every year. We’re probably using the same amount now, so investing in the borehole has saved us a huge amount of money.

“The most important thing with diversification is looking at the natural resources you already have on your site, and using them to suit you.”

Promotion

Of course, as Jo points out, there’s no point making the most delicious beer in the world, only for no one to know about it.

“Selling our beer is the biggest challenge,” she said. “Micro and even nano breweries are very popular at the moment so getting your brand into outlets can be hard.

“Building your brand and getting it out there is where the hard work really starts.”

Events are the team’s best form of marketing and have become a huge part of the business. “They give us the opportunity to go straight to the end user and get a lot more money for our beer, while also getting exposure,” Jo explained.

However, the most publicity has undeniably been generated by an appearance on Countryfile two years ago.

“We were advised that our website might not be able to cope with the increased traffic that Countryfile inevitably generates,” Jo said. “However, despite our IT guy getting involved we still didn’t accurately predict the amount of interest and the site crashed at 8:04pm!

“Our web stats went off the scale, sales in our online shop soared and the number of brewery tours booked shot up. We got other interviews off the back of it, we were approached by (but turned down) Dragon’s Den and people still come up to us to tell us they saw us on the programme.”

The appearance also led to other worthwhile opportunities. “After our appearance on Countryfile and winning Small to Medium Diversification Innovator of the Year at the British Farming Awards, we were contacted by the local authority, who made us aware of grants we could apply for,” Jo said.

The family ended up applying for, and securing, a grant from the Rural Payments Agency for £25,000, which helped them take their next big step; the creation of a brewery which helped them increase production from 20 barrels to 80 per batch. This in turn led to an increase in turnover of 66%.

Spotting niche markets

The success of a small diversification, like any business, appears to rest in the company’s ability to spot potential niche markets and new opportunities – something Church Farm Brewery does particularly well.

Increased capacity enabled them to offer their brewing services to other companies. “We’re not selling enough of our own beer to justify using the equipment every day,” Jo said. “So we’ve started making beer for three other breweries using their own recipes.” The team also hopes to install a bottling production facility in the near future, which will save valuable time as all the bottles are currently filled and packaged by hand.

Five years ago, Andrew planted an orchard of 140 apple trees which are almost ready to be harvested for the first time. “Cider will be our next venture,” Jo said. “We had the land and it seemed like a natural progression for us. The trees are now full of fruit so we’re really excited about that.”

And finally Harry will shortly turn his attention to another burgeoning marketplace; non-alcoholic drinks. In the past year, Nielson UK reports that £43 million was spent on no or low alcohol beers – an increase of 28%. And with a quarter of shoppers reporting that they are looking to cut down on alcohol consumption, developing a Church Farm Brewery non-alcoholic beer would appear to be a well-timed move.

Jo admits that the family has put a lot of pressure on itself, particularly at the beginning, but that this has helped steer it towards success.

“If I was to give anyone advice it would be to not rush to market – be 100% ready,” she said.

“We didn’t borrow any money until we decided to invest in a proper brewery, we don’t have an overdraft and we fund everything from the business. Doing these things would probably have enabled us to grow much more quickly and really hit the ground running – but it wasn’t a gamble we wanted to take.

“I do sometimes wonder where we would be today if we had done it that way, but now I think we are going at the right pace and we have a solid five-year plan.”

Slowly but surely, the Church Farm Brewery brand is starting to become more recognisable to customers and the family is finding that its hard work is really starting to pay off.

“People love a story,” said Harry. “They don’t just buy things for the sake of it anymore.”

“One of our biggest selling beers is Harry’s Heifer,” said Jo. “I always point out Harry at events such as the Good Food Show and everyone loves the family link, as well as the label for Black IPA, which he drew when he was younger.

“At the end of the day, everything is about the story.”

During the recent spell of unseasonably warm weather, I was in the garden removing the remnants of a fruit cage – which, ironically, had been flattened by the weight of the snow that fell in early February – when a Brimstone butterfly flew by.

Snow in February is not unexpected, but butterflies in flight and temperatures approaching 20 degrees Celsius certainly are. This warm weather has been welcomed by livestock farmers because it will help eek out fodder stocks, which are generally in short supply after last summer’s drought.

Arable farmers are also ahead of the game, with a significant acreage of spring-sown crops already in the ground and, although these early sown crops will not necessarily be the highest yielding spring crops, at least they are in the ground – they will yield nothing while the seed remains in the bag.

However, although this warm weather brings short term relief, I think it provides yet more evidence that our climate is changing and, in the long term, this will be a far greater challenge for us all than anything Brexit can throw at us.

These changes will bring opportunities for some and perhaps in this country, where the main problem with our weather is that it is generally rather wet and dull, it might mean we can start to grow crops that are currently not viable. For instance we are already seeing a few changes in land use with small vineyards popping up all over the place.

Indeed major champagne producers have already bought land and planted vineyards in South East England – they have recognised that with Kent’s chalky soils and changing climate, these areas will soon have similar characteristics as those found in the Champagne region in France.

But, on a global scale, climate change is likely to bring more challenges than opportunities, with sea levels rising, flooding many coastal or island communities and periods of drought and flood causing famine. In many cases this will result in periods of mass migration and we have all seen the political and economic challenges this has created in Europe in the last few years.

Thus, although we all tend to be pre-occupied by the here and now, which is clearly very important at an individual personal level, we must not lose sight of the bigger picture and the massive challenge that climate change will bring.

It will impact on farmers and farming systems across the world. The wider socio-economic and environmental impacts are also likely to be significant, and we will all have to do our bit to reduce our impact on the environment. But, in order to do this, we will need strong political leadership at a national and international level; something that is sadly lacking across the globe at present.

To say English weather can be unpredictable is certainly an understatement, therefore it has never been more important to ensure you are adequately prepared for every eventuality.

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James Stephen
RICS
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James is a Partner who heads up the South West Rural team based in Taunton.  He specialises in rural estate management, landlord and tenant matters, valuation, compulsory purchase and compensation, rural grant and subsidy regimes, rural planning issues and farm and estate diversification opportunities.

He is a RICS registered valuer and appointed valuer for the Agricultural Mortgage Corporation (AMC).

James has two children that absorb much of his free time but during the odd window of opportunity he enjoys fly fishing, playing tennis and cricket and is an armchair rugby enthusiast.

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