Although the name Budweiser Brewing Group (BBG) has only been in use since 2019, the company’s brands have a rich history dating back centuries.
Stella Artois traces its origins to the Den Hoorn brewery in Leuven, Belgium founded in 1366. Stella Artois – “Stella” meaning “star” in Latin – was born as a holiday gift from the brewery to the people of Leuven, and a star has been proudly displayed on Stella Artois bottles ever since.
Among many other brands, Budweiser Brewing Group also supplies Budweiser, Britain’s biggest beer brand, Corona, the number one world beer in the UK, and Beck’s, the most popular German beer brand in the world.
Jessica Markowski, Wholesale and Convenience Sales Director at Budweiser Brewing Group UK&I, tells Wholesale Manager how off-trade beer sales reached their highest levels on record in 2020 due to the Covid-19 lockdowns and how the company plans to support wholesalers this year.
How would you sum up Budweiser Brewing Group’s history?
We’re a brewer with a long history, and a strong heritage. Budweiser Brewing Group is a relatively new identity for us in the UK, having rebranded from AB InBev in 2019. Yet some of our best-loved beers, like Stella Artois and Budweiser, have centuries of brewing tradition! So, we treat our mission of maintaining the high quality of these iconic brands very seriously indeed.
As well as protecting our heritage, we’re also focused on our longevity – and are committed to building a business that will still be here, producing beer in a hundred years and beyond. Behind the scenes last year, we invested millions in our breweries to increase production capacity, all while improving sustainability across our supply chain. 2021 is going to be a huge year of opportunity for our wholesale and convenience customers in the beer category, so we want to make sure that we can help them meet demand in a way that is sustainable long term.
Can you talk us through your brand portfolio?
Our core range includes some of the UK’s leading premium beer and cider brands, such as Budweiser, Corona, Stella Artois, Bud Light, Beck’s and Magners.
Stella Artois remains the UK’s favourite alcohol brand1 and continues to see strong performance across the premium category, with 524 million pints sold in the UK Off-Trade during 2020.2 Budweiser remained the second most valuable beer brand in the Off-Trade, with value growing ahead of total category at +29.8% YOY,3 while Corona grew both volume and value at over double the rate of the total category across the year.4
A focus of 2020 was to expand our range of no and low beer to respond to growing demand amongst shoppers. We launched two new alcohol-free products – Budweiser Zero and Stella Artois Alcohol Free. Both premium options allow retailers to provide alcohol-free variants of shopper’s favourite beers that do not compromise on taste or quality. Bud Light has also performed well since its launch in 2017, and was worth £11.1m over the third quarter of 2020.5
How is the beer market performing?
2020 was a year like no other for the beer category in the Off-Trade, as a result of the increased footfall and spend arising from the Covid-19 lockdowns. Beer sales reached their highest levels on record, seeing +19.6% growth in Q3,6 and +23.4% in Q4.7
While hope is on the horizon with the vaccine, we still expect to see consumers subject to varying degrees of restricted living in 2021. So, many of the circumstances which drove Off-Trade sales in 2020 will still be in play.
Taking 2019 as a base, rather than the anomaly of 2020, we expect to see 11% growth for the total category in 2021 with Impulse & Convenience growing ahead of this and gaining share of total market.8
What are the biggest trends in the beer market?
We spent much of 2020 helping our wholesale and convenience customers get to grips with new consumer behaviours formed during the Covid-19 lockdowns. Increased at home consumption fuelled by trending occasions such as the Big Night In, for example, as well as enjoying beer with food as part of everyday, low-key beer moments at home. Even though we will be able to live in a less restricted way following the vaccine rollout this year, we can expect these at-home consumption behaviours to continue. As such, 2021 will provide a fantastic opportunity for wholesalers, and their impulse and convenience customers, in the UK.
Covid-19 also compounded a trend towards premiumisation – almost two thirds of shoppers claimed to be treating themselves at home during the initial lockdown in 2020.9 Alcohol is one area where consumer chose to splash out, with 52% of shoppers willing to pay extra for quality when buying alcoholic drinks to have at home.10 We saw this reflected in the success of our premium brands – value sales of Stella Artois, Budweiser and Corona grew by double digits during the lockdown period.11
How did Covid-19 affect the market?
Consumers have really re-discovered what it means to shop locally. A quarter (25%) of Brits claimed to shop more at their closest local store in 202012 with Impulse gaining +1.7ppt volume share of beer across total market in 2020.13 Online sales also doubled for the channel during the peak of Covid-19, demonstrating the extent of the ecommerce opportunity in this new landscape.
Making in-store and e-commerce offerings work in tandem in 2021 will be key for convenience stores – this can be as simple as in-store promotions that can be redeemed online.
How have your alcohol-free products, Stella Artois Alcohol-Free and Budweiser Zero, been performing?
Both launches have proven a hit in a year in which consumers continued to seek options to moderate their alcohol intake – with Stella Artois Alcohol-Free and Budweiser Zero growing ahead of the total no and low market and showing double digit growth since launch.
Even before lockdown, moderation was on the rise, with 42% of drinkers having made efforts to reduce their alcohol consumption at some point in their lives – equating to nearly 20 million people in the UK.14 This has contributed to the success of the no and low category, now worth £100.5m in 2020, up a huge 29.8% YOY.15 Alcohol moderation is no longer a trend but a lifestyle choice for many so wholesalers would do well to have range of no and low alcohol options available in 2021.
What steps have the company taken in the area of sustainability?
We made strong progress against our sustainability goals in 2020. Last October, we removed plastic rings across our entire UK-produced portfolio, helping our Off-Trade customers reduce their own environmental impact while catering for an increasingly sustainability-conscious shopper base. Combining our removal of plastic-rings and decreased usage of plastic shrink wrap, 850 tonnes of plastic waste will be taken out of our supply chains in total.
Last year we also reached the milestone of sourcing 100% of the barley used to brew our UK beers from British farms and announced in December the installation of a new wind turbine at our Magor brewery – another step towards our goal of brewing our beers with 100% renewable electricity.
How do you work with wholesalers to help them grow their business?
We introduced a new way of working with our wholesale customers at the beginning of last year – focusing on simplifying our pricing and promotions structure and introducing greater use of digital technologies. Despite a year of uncertainty and upheaval that none of us had anticipated, these new processes have already proven really effective for our customers.
How can wholesalers maximise sales of your products?
This year, our focus will be supporting wholesalers so they, and their customers, can thrive within a continuing context of increased local shopping and at home occasions. We’ll be working closely with the trade to help them leverage the strength of our brands against cultural moments and milestones that will drive sales even further.
Helping our customers select the right SKUs is also key – we know wholesalers are serving smaller independents with very limited space in-store. Last year, 4,532 different beer and cider SKUs were sold in the UK convenience channel, yet the average convenience store only has space to stock 69 SKUs.16
So, last year, we optimised our pack line-up to focus on our 568ml and 440ml cans. The pint can has seen strong performance, with sales up 29.2% over the last year,17 and 60% of consumers claiming to only buy this format.18 We’ve seen the pint can drive revenue in the convenience channel – Stella Artois and Budweiser pint can formats generate £383 more yearly in the average convenience store compared to 500ml.19
What marketing support do you have planned for your range?
The return of the Euros will be a huge opportunity for the channel with the Budweiser family – given Budweiser is the official beer of the Premier League and Bud Light’s sponsorship of the English Men’s Football team. We have a suite of activity planned around the Euros this summer, with lots of prizes and giveaways which will help retailers increase footfall and drive sales. And we’ll be bringing back our limited-edition Stella Artois packaging to help retailers get into the spirit of Wimbledon this summer.
We’re supporting those all-important everyday moments too. We’re planning a multi-million pound campaign with Stella Artois focusing on the at-home food occasion, along with campaigns around favourites such as Corona and Magners for at home and outdoor summer drinking occasions.
Do you have any NPD coming up?
We’re always looking at ways to diversify our portfolio to help customers meet changing shopper needs – Budweiser Zero and Stella Artois Alcohol Free were launched in direct response to the growing trend for moderation, for example.
We also worked closely with ZX Ventures – the growth and innovation group of AB InBev – to launch Mike’s Hard Seltzer in 2019. Hard seltzer sales have rocketed in the US and are showing strong growth in the UK, as consumers take to low calorie and lower ABV spirit alternatives. Mike’s Hard Seltzer is currently performing really well and is a great way for retailers to tap into this emerging category.
Watch this space for more exciting launches this year!