The current generation are drinking less, and the next generation will drink even less – so headlines have said over recent years.
Well those writers aren’t wrong. Survey after research after survey shows that consumers are looking to moderate their alcohol intake.
A recent analysis via FMCG Gurus survey of 1,000 beer drinker in the UK in Q3 last year, showed 42% of beer drinkers say that they have looked to limit their intake of the last twelve months, with 71% of these consumers citing health reasons for doing so.
This trend, added to the government’s duty escalator and variable summer weather has undoubtedly affected the beers, lagers and cider category.
But we need to put this decline in perspective, for the market remains huge with plenty of room for growth, as the craft revolution has emphatically shown.
Furthermore, with only 12% from the same survey saying that they drink non-alcoholic beers, consumers are clearly looking to moderate intake of standard products rather than turn to non-alcoholic alternatives.
In addition, 57% of beer drinks in the UK say that they plan to seek out healthier beer options over the next twelve months.
While trends are important to keep abreast of, what wholesalers need to know is that lager still accounts for two thirds of all sales value in convenience stores (CGA).
Canned lager is still the most popular format however larger single serve bottles (660ml) and smaller multipacks are also popular in premium and world beer categories. CGA says that grab packs of bottles for premium world beer, particularly Mediterranean styles are also popular.
Total market volume for the year to March 2019 has shown that 4.3 million pints of beer were sold through the off-trade, which is 700,000 more than on-trade (Marstons).
While we know craft and healthier drinking are two of the major growth areas in beers, lagers and cider, it is important to note that over the previous three years there has been a huge amount of value switching to premium areas of lager.
A trend that is continuing to grow, says GlobalData, who highlight in their research of the category that beer drinkers are seeking quality over quantity.
In fact, consumers are now willing to pay a higher price for a more premium experience. This has then increased the demand for premium world beer, which commands a higher price no matter what the ABV.
It’s no surprise then that World Beer is a top performer within the beer industry, growing +14% within the last year, which totals at £112million (CGA).
Benefitting from this trend are a number of world beers and lagers, including Super Bock, Portugal’s best-selling lager, winning 35 consecutive gold medals from the Monde Selection, International Institute for Quality Selections – the only beer to have ever done this.
As well as being a premium crafted world lager, Super Bock is imported directly from Portugal having been brewed in Porto since 1927. This is the kind of authentic brand story and provenance customers are increasingly seeking from their lager brands.
Distributed in the UK by Brookfield Drinks, the brand’s best-selling product is the 660ml bottle, which has already achieved listings in supermarkets for £2, or as part of a mix and match 3 for £5 offer along with other 660ml world beers.
Kestrel Premium lager is another world offering with a rich history (and another brand supplied by Brookfield Drinks).
It offers a full-bodied, rich drinking experience which is crafted using the Holy Brewing method; which includes a 7-day cycle of fermentation.
With Kestrel Premium positioned as high quality, additional margin can be gained for savvy wholesalers and retailers. Furthermore, the brand has a new re-designed can, adding a more eye-catching and contemporary look.
Brookfield Drinks advises wholesalers and retailers that their Super Bock range should be in the chiller, as many drinks are consumed within two hours after purchase. In fact, 43% of World Beer drinkers state that having their beer chilled is the most important aspect when purchasing (CGA).
“Ensuring Super Bock is available chilled to consumers will increase sales as well as add to the more premium offering of the beer.
“Super Bock 660ml bottle formats in world beer are ideal for independent and convenience retailers as 21% of total sales of this format are purchase as a ‘top-up shop/food for tonight’,” says Brookfield Drinks. What the beers, lagers and cider market has always benefitted from is big suppliers taking on responsibility in driving growth.
In this vein, Heineken recently announced the results of the second year of its Greenpaper three-year category strategy, which has driven a further £132m towards the £670m three year value opportunity it identified in 2018.
Heineken’s Greenpaper offers wholesalers and retailers solutions on how to grow their businesses and accelerate growth in the beer and cider category.
Built from over 100 pieces of qualitative and quantitative research, the category strategy identified an incremental £670m in value for the Off Trade over the next three years (2018 – 2021) via six different drivers.
Each of these focused on leveraging seasonal and sporting events (Sports & Seasons), premium alternatives (We’re Worth It), healthier options (Live Better), driving value through core principles (Maximise the Core), recruiting and engaging with 18 to 24 years old shoppers (My Generation) and food pairings (Great with Food).
Over the last 2 years an incremental growth of £448m has been secured across the strategy, with the supplier’s ‘Great with Food’ driver responsible for £126m of value alone this year, illustrating the importance of cross-merchandising in-store.
Toby Lancaster, Category and Shopper Marketing Director at Heineken UK, commented: “Looking forward to 2020, we’ve got several key opportunities in sight.
“With £182m left of the three year opportunity to unlock in Year 3, the approaching summer of football with Euro 2020 kicking off, and our increased sustainability drive, starting with our pledge to remove plastic from all multi-pack cans by 2021, are just two of the ways we aim to achieve this category growth.”
Guinness from Diageo is another brand that historically has strongly supported the independent trade.
Guinness Six Nations and St Patrick’s Day are the two biggest periods of the year for Guinness, and in 2020 Guinness will be activating in wholesale depots and across 8,000 outlets in the trade.
“As wholesalers and cash and carry depots look ahead to what 2020 will bring, having a drinks range that prioritises choice and premium options will remain of key importance as consumers continue to demand high quality brands,” says Hannah Dawson, Head of Customer Category, GB Off Trade, Diageo
“Now more than ever, consumers are placing importance on premium brands that explore a complex range of flavours. For example, Hop House 13 has floral and citrus notes and is lively on the palate, while Guinness West Indies Porter is known for its classic bitterness and caramel-toffee sweetness.”
The low and no alcohol category is another area which has seen a significant boost in the off-trade in recent years and Guinness successfully capitalised on this fast-growing trend in 2018 with the launch of the non-alcoholic Open Gate Brewery Pure Brew.
Since launching, overall sales contributed to the 36% year-on-year growth in the take home category (CGA) by the end of the year, highlighting the vital role of innovating.
“Sustainability remains at the forefront of consumers’ minds and wholesalers should look to include selection of highly sustainable beers in depots as the New Year progresses. Eco-friendly packaging has been a particularly successful way to encourage responsible consumption and tap into the growing consumer demand for more sustainable practices,” says Hannah.
In April 2019, Guinness announced the removal of shrink-wrap from multipack products and its transition to sustainably sourced, recyclable and biodegradable cardboard packs.
Hannah adds: “It is important for wholesalers to recognise that effective merchandising strategies can be crucial in boosting beer sales to independent retailers all year round, especially during key calendar dates like Six Nations and St Patrick’s Day.”
In the Cider market, Westons annual Cider report gives the industry a great insight into what is happening in this category for wholesalers and retailers alike.
Last year’s report shows that in 2018 Cider volume grew 2.6% and that value continues to grow ahead of volume as the market premiumises – price per litre increased by £0.06 to £2.25.
Five key themes emerged from the report on consumer purchasing: Apple is still the dominant flavour variety with 57% share of cider value and is 2.5% up year-on-year; Fruit now accounts for over a third of sales and continues to show double digit growth up 11.7% versus last year.
Thirdly, the strong growth in fruit cider is being driven by the can format, which accounts for 55.3% of fruit value; Fruit cider in a can saw 22.9% growth versus last year.
Finally, Fruit has higher penetration than apple cider, so more households are buying into it, however apple cider shoppers spend £64.90 a year whereas fruit shoppers spend £33.24 so apple shoppers drive almost twice as much value.
Interestingly, Pear cider has seen no signs of a resurgence now having just 7% share with value still declining.
Despite this, pear cider still has 97% distribution in the off trade, and for wholesalers, addressing this could free up space for better performing products and help enhance the overall cider category growth, advises Westons.
Clearly, stocking the right flavours are a dominant theme in Cider sales.
In 2018, Brothers Drinks Co. reported an increase of over 100% in like-for-like cider sales across UK winter markets for its Spiced Toffee Apple and Mulled Festival Ciders and more recently reported a 44% uplift in total like-for-like sales of its Toffee Apple cider flavour during 2019.
“We expect further growth for our Toffee Apple flavour through its presence at over 75 UK winter markets and increased consumer demand for seasonal flavours and mulled ciders over the colder festive period,” commented Nicola Randall, Senior Marketing Manager at Brothers Drinks Co.
The supplier activates a number of partnerships with wholesalers, consisting of bespoke loyalty cards and promotions, specifically tailored product ranges and dedicated POS.
They also support with events, cocktail ideas and bar equipment, as well as team training and product expertise.
“As a result of the partnerships in place, often through our wholesalers, a large proportion of our operators have seen return on sales increase three-fold, which has led to Brothers and Mallets Cider becoming a staple in their drinks portfolio throughout the whole year,” says Nicola.
Capitalising on the rising low/no alcohol trend, Thatchers Cider recently introduced Zero, its first alcohol-free cider.
With a golden appearance, crisp, medium dry taste, and fruity aroma, this is a drink designed to look like cider and taste like cider. At 0.0%, Zero will appeal to those consumers looking to moderate their alcohol consumption.
“We’ve taken a lot of time and care in the production of Zero,” says Martin Thatcher, managing director and fourth generation cidermaker.
“Created to be full of taste from the start, this is a no-alcohol cider that meets the growing consumer expectation for moderation, but just as importantly offers great character and is something special and enjoyable to drink.
“It offers the premium experience people are looking for when choosing an alcohol-free alternative.”
Thatchers Zero has an RRP for 500ml of £1.80 in the off trade and is no more than 0.05% abv.
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