bottled ales have savoured success
by offering variety while there's been mixed fortunes for low alcohol
and superstrength lager as well as a continuing decline for stouts
Zero and low alcohol beer finally comes of age
After 20 years in the wilderness it seems like the time may finally have come for no and low-alcohol beers.
The category - almost exclusively accounted for by benign versions
of well-known lager brands
- saw a 9 % increase in take-home sales in the year to Oct 4.
In volume terms, the rise was even bigger, from 69,000hl to 82,000hl, a jump of 18 %.
The first wave of no and low-alcohol launches in the 1980s were principally targeted at the on-trade, prompted by concerns over drink-driving.
Two decades down the line, staying sober so you can get behind the wheel of a car has been joined by healthy lifestyles and concern over binge-drinking as the motivation
for purchases, giving the off-trade a bigger share of the cake.
The main obstacle to growth for NABLABs back in the 1980s was that they just didn't taste very good. After trying a few different brands, many drivers came to the conclusion that they'd be just as well off having an orange juice or a Coke, as low-alcohol beers failed to deliver on the promise of replicating full-strength lager taste.
Mike Teague, sales director at Bavaria UK, the arm of the Dutch brewing arm which markets the 0% abv malt brand in the UK, says current growth in
NABLABs is being driven by more than just drink-drive concerns.
It's done promotions with pregnancy websites and health clubs.
"The quality of a lot of the brands is very good compared with 20 years ago," he adds. "People have only had a choice of one brand, in Kaliber, in the past, but now retailers can offer a good range to customers."
Many of today's brands have managed to slip under the radar into respectability rather than being hampered by high profile celebrity-driven advertising.
Barbican's ads of yesteryear secured almost as many ridiculing parody versions on TV sketch shows as they did sales.
That big brands
such as Stella Artois and Carlsberg have dipped their toes into the low-alcohol market in the last couple of years, indicates a feeling in the industry that the category is still one of potential unfulfilled.
Mid-strength launches like those from Carlsberg and Carling, with C2, also promise to make the wider lower-strength beer proposition more interesting in the future.
To date, much of the activity has been in low-strength lagers, with low-alcohol ale barely registering on the Nielsen sales charts.
Hall & Woodhouse's Harvester's ale - a mid-strength brand made especially for Tesco - is an exception, and the ale fraternity's reluctance to get involved in brewing anything but "proper" beer could keep low-alcohol ale on the sidelines for now.
Features tint heading
Nielsen analyst Graham Page is pessimistic about the brewing industry's chances of reversing its fortunes in the immediate future.
He predicts that Miller Beer may not be the only brand which disappears, or is contracted out, as brewers rationalise their portfolios.
"It has been a disappointing year for beer compared to previous years," he says. "Beer has been growing very steadily for a long time, accelerated by the hot summer of 2006. You've now got a situation where the on-trade has almost collapsed and the off-trade is fallen back itself.
"Any brands that are marginal may be put out to contract, with somebody else producing them, which may help the regionals. The problem for the big nationals is that the UK is a mature market in decline and it really hasn't got anywhere to go."
Page predicted "suicidal" pricing this Christmas as the industry tries to shift volumes that did not sell in the summer.
"My gut feeling is the performance of the trade in January, February and March will be absolutely dire and we'll be seeing some of the worst numbers in living memory, as bad as the Depression of the 1930s."
Off-trade market value
Week ending Oct 4 2008: £13m
Week ending Oct 6 2007: £12m
Super category in the grip of kryptonite factor
No decline in sales in any drinks category
is exactly regarded as welcome, but the continuing demise of the superstrength lager sector will see few tears shed.
Along with white cider, no alcohol type has done more to perpetuate the stereotype of the park bench drinker - and a drop in sales will be a welcome contribution to the industry's file of evidence that it is trying to clean up its act on binge-drinking.
Though Carlsberg Special Brew was famously first brewed to commemorate the visit of Winston Churchill to Carlsberg's Copenhagen brewery in 1950, it's become part of a category
that has unfortunately
been linked to people who seek
the biggest bang for the fewest bucks
over the years.
The major brands - Special Brew included - have done their best to distance themselves from that image over recent times, and moves to reduce pack sizes while maintaining prices, and keep superstrengths off-promotion, have helped to mitigate the category's image problems.
But the fact that some licensing authorities have sought voluntary bans on superstrength
sales , backed by a willingness by image-conscious retailers to take their own delisting steps, is indicative of the way blame for problem drinking has historically been laid at the category's door.
The upshot of all this is that superstrength sales value was 6% down in the year to Oct 4, compared with a similar period a year earlier, to stand at £130 million, accounting for a 5% market share, down by 0.4% on a year before.
"The drive to persuade people to drink less is obviously having some impact," says Nielsen analyst Graham Page.
"I wouldn't say brewers would be happy to see it die, but they are probably happy for it to be left to find its own level and in the process help the image of the alcohol category."
Lead brands Carlsberg Special Brew and Tennent's Super both managed to increase sales by a little over 1% - suggesting that tertiary and cash and carry brands may have been taking the bulk of the hit - though neither qualifies for a place in the overall top 10 beer brands, as has been the case historically.
Ged Lowry, head of take-home customer marketing at Carlsberg UK, agues that "superstrength is not the cheapest way to get drunk," and adds: "It's got an older demographic and an affluent shopper base. We don't really
do any marketing around Special Brew,
but there are people who want to drink superstrength beers - who want something different to standard and premium lagers - and in the vast majority of cases drink them
Ironically, the furore over supermarket pricing of mainstream lager brands may have taken the heat off superstrengths somewhat - but still, if you had to put your mortgage on the future performance of a single beer category, this wouldn't be it.
Ales that are showing real bottle
If there were a Beer Report prize for best performing brewer then Greene King would surely be in the frame.
The year has seen double-digit growth for its Greene King IPA, Old Speckled Hen and Ruddles County brands and a creditable performance from Abbot Ale - and all four brands securing places in the top 20 selling ales.
While the performance is a reflection of Greene King's levels of support for the brands overall - and off-trade specific activity - they're also testament to the growing interest in premium bottled ales among consumers.
The PBA category rose a further 3% in the year to October to stand at just short of £168 million, giving it 38% share of the ale market, and 5% of the total beer market.
It's easy to get too carried away - after all, John Smith's Extra Smooth on its own is half the size of the whole PBA category - but anything better than a flat performance in today's beer market represents considerable success.
"The 50cl dumpy bottle has been doing incredibly well while the rest of the ale category has been going backwards," says Nielsen analyst Graham Page.
"Elements like provenance, choice and variety seem to go very well with consumers and people are willing to pay a premium for it."
That's born out by the fact that the volume increase was just 2% over the year, outstripped by value growth.
Page adds: "The dilemma for companies like Marston's and Greene King is that although they do make a bit of money, it's never going to be as much as they would make from their tied pubs in terms of margin."
But if the sums can be made to add up, the bigger bottled ale players could offset the difficulties faced in the on-trade through enhanced take-home earnings.
"Cask ale is doing better than the rest of the on-trade in beer - only down about 4% compared with 7% or 8% for beer overall - and at the moment
ale does have the support of the major retailers," says Page.
"Most have 150 SKUs, when if you applied the normal category management criteria used across the rest of grocery, you'd probably strip most of that out and have just four or five."
PBAs' long-term success may hinge on whether the buyers continue to take a benevolent view of the category's attractiveness in allowing them to showcase local products brewed with skill and passion.
Off-trade market value
Week ending Oct 4 2008: £113m
Week ending Oct 6 2007: £116m
Off-trade market value
Week ending Oct 4 2008: £130m
Week ending Oct 6 2007: £139m
Premium bottled ale market
Value: £168 million
3% up on last year
2% up on last year
Share of the off-trade ale market by value: 38%
Share by volume: 26%
Source: Nielsen GB off-trade to
Oct 4 2008
Top three brands
1 Guinness Draught
2 Guinness Original
Stout performance from the Guinness pair
Sales of canned Draught Guinness outsell the next biggest stout brand by more than two to one - and the second biggest stout is its sister brand Guinness Original.
Sales of the two combined are more than eight times those of number three brand Murphy's, the Inbev UK-distributed product that lost over a fifth of its sales in the 12 months to October.
It's little surprise in a battle where Diageo's Guinness receives a constant supply of marketing money while Murphy's goes relatively
A Guinness pack redesign a year ago has been followed this year by Channel 4 film sponsorship, a new advertising campaign and extensive sampling, according to Richard Barlow, senior brand manager at Diageo GB.
But while Guinness has the market pretty much cornered, it hasn't had its greatest year.
Canned Draught Guinness
sales were more or less flat at around the £65 million mark, while
Original saw a 4% slide, to stand on £27 million.
Barlow says: "Canned Draught Guinness has been performing in line or ahead of the beer market, and we view our competitive set as leading lagers and ales rather than other stouts.
"Our activity has been about trying to extend in-home drinking occasions to include more with-partner occasions. In the past, it's been about rugby and other sport, and blokes drinking Guinness while they're cooking."
No other stouts troubled the scorers in the top 50, reflecting the relatively minor market share of 3% the category has.
Overall stout sales in the off-trade dropped 3% over the year to stand at £113 million.
But while Guinness dominates the category, its current performance isn't dragging stout to new heights.
For genuine new stuff in stout you have to look much further down the food chain, to fledgling brands, such as Brew
Dog's Paradox and Dorothy Goodbody's Wholesome Stout - both brands which have come under scrutiny from the watchdogs and
national media this year, but which have built up a small but loyal following, unencumbered by the trappings of Irish-ness.
Of the micro-brewed stouts, Titanic from the Midlands has made the best in-roads into the multiples, with other smaller brewers relying on enthusiastic independents and the Thresher-SIBA link-up for their distribution.
Next year, look out for a hinted-at renaissance for Guinness Original. Barlow says: "It's the 250th anniversary of the Guinness brewery and it's the closest you can get to the recipe Arthur Guinness would have first used, so there's a big opportunity. Watch this space."