Ruffling some feathers

14 November, 2008

Nothing is certain in the ales sector where there have been some meteoric shifts in sales figures

The list of best-selling beer brands currently rivals the FTSE100 for volatility. For every brand enjoying a double-digit period of growth, there's another whose market share is bombing.

So it is that John Smith's Extra Smooth is up 10% while its running mate, John Smith's Original, is down 20%.

As Boddingtons continues its long-term slide with a 15% annual decline, Old Speckled Hen has surged ahead by 17%.

The story continues down the list: Greene King IPA up 21%, Worthington's Creamflow down 10%; Hobgoblin up 12%, Marston's Pedigree down 19%.

With so much to -ing and fro-ing , it's perhaps surprising

the actual line-up of the top 20 hasn't changed that much since a year ago. Only McEwan's Export and John Smith's Original have traded places in the top 10, and the biggest climb is Hobgoblin's rise from 14th to 12th.

Pedigree fell furthest, down from 11th to 15th. The reversal of fortunes between Hobgoblin and Pedigree could be an indicator of future priorities in the expanding Marston's camp after the acquisition of Hobgoblin brewer Wychwood.

But if current trends continue, there could be some significant change in the top 20

next year. Old Speckled Hen's sales value of £26 million leaves it tantalisingly close to breaking the John Smith's/Boddingtons one

and two positions that

have been the status quo for a decade or more.

It would also be a landmark moment for premium bottled ales, the sub-category that's driving growth , but which in volume terms still plays second fiddle to the established brands of the big brewers.

Seven of the top eight ale brands are owned by the major national brewers, though Fuller's London Pride is well-positioned to join Speckled Hen in the upper echelons over the next couple of years.

Within the big brewer hierarchy, Tetley's Smoothflow's 5% upward trend could see it taking Caffreys down a place, and London Pride may feasibly do the same.

The bigger picture in all the ups and downs is that the winning brands are apparently stealing share from rival brands rather than adding sales to the ale category overall.

The ups and the downs pretty much cancel each other out, with overall sales flat at around the £442 million mark.

But considering

ale has largely been

thought the ugly duckling of the beer category - at least in the off-trade - for

two decades, it's not such a bad performance.

Ale's only slightly underperforming the total beer market at a time of mega-cheap lager deals, rising industry costs and tighter consumer spending.

The game seems to be up for old-fashioned keg-style canned bitter though, with Stone's falling out of the top 50 beer brands, and John Smith's and Tetley's increasingly putting their efforts into the creamy side of things.

The Scottish & Newcastle triumvirate of Newcastle Brown, John Smith's Original and McEwan's Export had a tricky time in the year

their brand owner was bought by Heineken.

For Newcastle and McEwan's the real interest will lie in

the figures when they've had a full year in the new outsourced sales and marketing unit Jygsaw.

Graham Page, analyst at Nielsen says: "It's going to be very interesting because they are well-established brands but [S&N] clearly feels it doesn't have the resources to give them the focus it would like."

As far as ales go , that focus is clearly on John Smith's Extra Smooth, the brand which has done an excellent job exploiting promotions around its Grand National sponsorship and which - backed by strong on-trade distribution for the draught version - has kept widget beer firmly on the map at a time when the authenticity of premium bottled ale is widely assumed to be having more resonance with consumers.

"In widget ale, success is really about those brands with the focus and levels of promotion," says Page. "If you've got a brand with high penetration and high turnover then you're going to have more margin to plough back into marketing."

It's no coincidence that two of the main fallers in recent years in widget bitter have been Boddingtons and Caffreys. A decade ago, they had arguably the highest marketing profiles of any ale brands on the market, but today the level of investment is a mere trickle by comparison.

Coors' recent decision to introduce temperature-sensitive cans for Caffreys has been billed as an attempt to attract a younger generation of drinkers to the brand, but for a beer that was once the rising star of the ale category it could prove to be have come several years too late.

Off-trade market value

Week ending Oct 4 2008: £442m

Week ending Oct 6 2007: £443m

Change: 0%

Top 20 ales

Position Brand % change

1 John Smith's Extra Smooth 10

2 Boddingtons -15

3 Old Speckled Hen 17

4 Newcastle Brown Ale -8

5 McEwan's Export Ale -5

6 John Smith's Original -20

7 Caffrey's -7

8 Tetley's Smoothflow 5

9 London Pride 4

10 Tetley's Original 2

11 Theakston's Old Peculier -9

12 Hobgoblin 12

13 Worthington's Creamflow -10

14 Tanglefoot Bitter 6

15 Marston's Pedigree -20

16 Abbott Ale 7

17 Bombardier 10

18 Greene King IPA 21

19 Spitfire -1

20 Ruddles County


Source: Nielsen GB off-trade year to Oct 4 2008


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