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Beer – From Beer To Eternity
d=”standfirst”>Lager still dominates the UK beer market, but more consumers are beginning to experiment with the variety and complexity of beer. Wheat beers, fruit beers, organic beers, even real ale, are catching on, says Robyn Lewis
The beer marketeers may be doing their best to shed the uncouth lager lout association in favour of a more refined image – see Carlsberg’s recent announcement that it is to sponsor an exhibition at the Royal Academy of Arts later this year, or the Stella Artois Screen at the Cannes film festival – but the figures show that, so far at least, the image problems have not been a barrier to sales with the category accounting for nearly half of the UK’s expenditure on drinks (Keynote, 2002).
Beer in the UK is, according to the most recent Coors statistics available (from the Coors Insight presentation and based on BBPA) a stable market. MAT figures to June 03 show the UK beer market at 34.63m barrels, in 2002 that figure was 34.69m so there has been very little movement. However, more interestingly, within this market there are signs of significant change. The Coors Insight figures have lager holding 68% of the total beer market and worth £9bn per annum. Predictions show that by 2008 the market for lager will have more than doubled and is set to account for over three-quarters of the UK beer sector, which will equate to two in every three pints bought in the on-trade, or over 90% of all beer sold in the off-trade. Furthermore, if trend predictors are to be believed, this category will shift to a more premium focus.
Pushing Premium
Currently, according to the Coors Insight figures, premium lagers account for around 43% of the UK lager market, and by 2008 it is expected to have risen to 46%. Coors attributes this to the growing trend for travel, developing tastes for colder and more refreshing drinks and for international and inspirational brands, though the company sounds a warning note.
“Those figures aren’t bad but there are obstacles in front of us and we should not take our eye off the ball,” says Coors’ Paul Heggarty. “The first thing that we, as an industry, need to address is the debate over alcohol responsibility that the government is bringing to us. The second is the issue of quality at point of purchase, and by that I mean the way beer is presented in the onand the off-premises. Look at the way consumers see wine, for example. In a pub or bar it is on a list with a description telling you the country of origin and with a tasting note and it is the same on the supermarket shelves. Meanwhile, with beer, well it is simply not presented as a connoisseur product. The third thing is the image of the category which we are trying to improve with initiatives like Beer Academy and Beer Naturally.” These latter two campaigns are industry-wide initiatives to educate the trade and consumer about beer, its heritage, the taste and benefits with the aim to add appreciation and, therefore, value to the category.
Many would argue that it is the larger brewers with their bigger budgets and popular brands that are in the best position to drive this movement and one of the largest, Anheuser-Busch, would agree. “We have the highest media spend for lager in the UK and we use that to add value to the category, invest in the brand and drive premium price,” says Randall Blackford, UK marketing director for Anheuser-Busch Europe. For its Budweiser brand Anheuser has concentrated on the freshness of its beer, highlighting the “born on” date on bottles. “UK consumers are looking for quality in products and freshness is our way of flagging up the quality of Budweiser,” he explains. “Consumers are beginning to notice the benefits of the bornon date and we are trying to educate the trade too with our ‘day fresh’ initiative. This means that we pick up the beer from the brewery in the morning and taste it in bars that same day.”
Blackford is keen to stress that Anheuser tries to drive profit through its brands, rather than relying on discounting to drive sales. “Premium lagers should be premium,” he explains. “Value-added promotions linked to high-profile sponsorships are where we are at, and that’s what retailers, on- and off-trade, can continue to expect from us. We want to add value to the category not take it away.”
John Ricketts, off-trade sales director for Heineken, says he agrees with this approach. “From an off-trade perspective in particular, the biggest issue facing us is ensuring that we find ways to hold the value of the category, particularly in the light of growing price promotional reliance and price dilution,” he comments. “Category building initiatives should be high on the industry agenda.” An area that Heineken has concentrated on, he says, is packaging, having introduced designer aluminium bottles and a new keg-shaped can. “Packaging innovation is a key driver in the off-trade, and event-driven occasions have a massive impact and stimulate increased usage as well. We’ve seen huge interest in, and sales of, our keg-shaped can. It’s been a big hit with retailers and consumers alike. Focusing on improving the drinking experience and responding to the demand for chilled beer also provide growth opportunities.”
Heineken has, of course, made a concerted move to premium beers by ditching its Heineken cold-filtered last year in favour of the 5% original Dutch export beer. Such a decision reflects the shift to premium beer that trend analysts predict will become even more pronounced over the next few years. One of the beneficiaries of this development is set to be the so-called speciality brands – wheat beers, fruit beers and imported beers such as the Czech beer Budweiser Budvar.
“Budvar’s sales in the UK are currently running at 18% up year on year,” says Denis Cox at the company. “Thanks to low cost travel, TV foodie programmes and the other printed media more and more people are discovering the variety and complexity of beer. You can now buy beers in the UK from as far afield as Peru and, in fact, any country in the world that brews it. I think it could almost be argued that it is changing places with wine. Not so long ago in the UK wine was a high-status drink for a high-status occasion, now there are gallons of it about and everybody is gobbling it down Hogarthian fashion all over the country. Meanwhile, more and more restaurants are developing beer lists and off-premises are developing their specialist beer sections.”
Ale awareness
So far the good news has all been for lager, as you will have noticed, but with the growth in beer and food matching, and in people’s growing taste for those speciality beers, ale – that’s cask-conditioned or real ale – could yet make a comeback. The Campaign for Real Ale (CAMRA), for example, is hoping that its work will bring the drink to new audiences. It is challenging brewers to market their ales to women and its 2002 Goddess of Beer campaign urged women to “Get real and discover the cool, natural taste of real cask ale”.
Others have been looking for new methods to distribute real ale in order to increase its appeal. Patrick Clark, the managing director of Clark’s Organic group last year launched a website (www.beersinabox.com) that sells organic, British ales over the internet. “The problem is that about 86% of the beer market is controlled by the big four retailers and they are able to control distribution. So I got together with other local microbrewers and we showcase and sell our beers online,” he explains.
Interestingly, according to Clark the majority of buyers live in the South, even though he is based in Yorkshire. “Most of our sales are below the Watford Gap and around nine in 10 are female,” he says. “The majority of this is presents for male friends and relatives but still, if they just have a try of one we could be developing a new consumer base.” With women the acknowledged trend-setters as far as the drinks industry is concerned (see the Beer and Women Focus overleaf) and with the South usually the place where fashions are conceived, it seems real ale will be a category well worth watching.
Indeed, the whole beer category will be worth tracking for a while, whatever sector of the drinks industry you work in. As the debate over the damage that cheap, high volume alcoholic products do to the nation’s health begins to hot up, it looks as if beer just might be the first of such drinks to make the step to a properly premium market.