The Fall and Rise of the Local Brew: Process Innovation, Horizontal Product Innovation and the Geographic Dispersion of Breweries in England, 1900-2004

In the presence of strong economies of scale, a fall in transport costs can lead to a more pronounced geographical concentration of production. This is very apparent in the growing concentration of breweries in England from 1900-1970. The number of breweries in England fell sharply between 1900 and 1970, and so also did the range of locations in which they were located. In 1900, many small villages could boast a brewery of their own, but by 1970, the vast majority of breweries were located in towns and cities. However, as the number of discerning consumers has grown, with a pronounced taste for horizontal product variety, the tendency towards geographical concentration has declined in the last forty years. The consumer group CAMRA, arguably the most successful consumer group ever formed, has been instrumental in educating English beer drinkers to appreciate horizontal product differentiation in beers and ales. Since the foundation of CAMRA in 1971, we have seen many new micro-breweries enter the industry, and a rapidly increasing geographical dispersion of these micro-breweries.