Homegrown hero

17 June, 2013

When writing a story you need conflict, drama and obstacles for the hero to overcome in order to capture the reader’s imagination.

Without a dark lord to vanquish and a ring to destroy, Lord of the Rings would become a nine-hour barn dance.

If Rocky won all his fights without breaking a sweat, the film probably wouldn’t have swept up at the Oscars and earned a huge global fan base.

Last month OLN wrote a feature about the lager category, the Rocky Balboa of the drinks trade – an underdog losing market share, with obstacles to doggedly fight through at every turn.

The story had (we hope) highs and lows, laughs and tears, and showed its hero – lager – embarking on a journey, growing as a character and becoming richer for the experience, full of hope after overcoming problems and able to see light at the end of the tunnel.

But when it comes to writing about British ales, it is like writing about a snarling Mike Tyson stepping into the ring against a bunch of frightened schoolboys.

While all the other main categories are struggling to arrest falling volumes, British ales are continuing their upward march.

Volume sales are growing at 2.4% year-on-year – driven by bottled ale, which is up 4% – and the off-trade ale category is now worth £510 million (Nielsen, year to January 5).

It is bullying the others, forcing them off the shelves and taunting them with its impressive growth figures, and nothing seems to be able to stop the juggernaut.

The main obstacle it faced was the duty escalator – which the Chancellor has now scrapped in true deus ex machina fashion – and the weather was perhaps a tiny thorn in the side, but now the sun can’t stop shining.

The biggest challenge faced is counting all that money: this month Fuller’s posted a 5% annual profit rise to £31.7 million, the latest in a string of British brewers to reveal sterling results. 

British ales

“The latest Nielsen data shows all the other categories looking grim and there’s only one shining light within that and that’s premium ale,” says Neil Jardine, retail sales director at Greene King.

“Retailers are looking at the same figures as us, so they know how well it’s doing, and we are helping them grow it.”

The British bottled ale off-trade category is now worth £330 million, and Marston’s predicts that within five years it could double and be worth £660 million.

Category marketing director Thom Wilkes says: “The category has a solid platform of great brands, growing consumer awareness and occasion-led innovation, which will allow the category to double in value in the next five years.”

After a decade of consistent growth, some retailers may worry the bubble will eventually burst, as Lee Williams, marketing manager at Thwaites, admits “nothing can last forever”.

But he adds: “So long as the category can attract the novice or younger drinker then there is plenty of potential in British ale.”

Jardine points to the fact that the category enjoys a penetration rate of just 25% as proof of its potential to continue to grow, adding: “There are three in four consumers that haven’t tried this category and there is a huge potential to double its size.”

Ale has had it all its own way for so long – like a long Rocky box-set where all he does is pick off feeble opponents and bask in universal adulation – that there is a risk of becoming complacent.

But Jardine says: “We remain paranoid by our nature. We can’t plan or anticipate things just to grow but with the correct management it will continue to grow.

“Suppliers and retailers all want it to remain a healthy category we can benefit from.”

Bill Simmons, national account controller for Fuller’s off-trade business, is equally optimistic.

He says: “Consumers are also becoming increasingly interested in provenance and local markets, leading to increased consumer knowledge. These drinkers tend to be more experimental and the reinvention of traditional ale styles from well-known brewers, such as IPA, sparks their interest.

“They can continue to increase penetration and we can draw comparisons from other categories such as cider to demonstrate this. The cider category, which was once seen as dull, boomed due to innovation. If brewers continue to innovate and experiment, sales of ale will continue to increase.”

Williams attributes the category’s success to the engaging stories behind many British ale brands.

He says: “Our recent Lancaster Bomber promotional campaign linked around the 70th anniversary of the Dam Busters highlighted the interest and demand from shoppers to buy into a British cause.”

This is evidenced in the recent return of Shepherd Neame’s “bottle of Britain” Spitfire campaign and the release of Iron Maiden’s Tooper ale, based on the Charge of the Light Brigade.

“Britain has a strong tradition of military prowess and it’s great to tap into that,” says lead singer Bruce Dickinson, who created the 4.7% ale that has already taken the off-trade by storm with listings at Morrisons and various independents.

Williams says: “I think as brewers we need to bring these stories more to the attention of both retailers and shoppers and tie in with calendar events and occasions to really drive everything that is great about British ales.”

Britain will never run out of stories of wartime heroism, and patriotism is at an all-time high following the London Olympic Games, so the only way seems to be up.

How terribly boring, but how terribly exciting for retailers wondering how to increase profits.

“The main challenges are the growing number of ales available in each retailer, there is a danger of proliferation as there is such a vast amount of individual SKUs available,” says Simmons, finally throwing up an obstacle.

“There is a risk that consumers could get confused at the fixture as there is so much choice. Market leading brands can lose visibility on shelf as they are not given the proportional shelf space they deserve.”

Marston’s agrees, with Wilkes arguing that the top 10 brands make up 40% of volume sales but are given just 19% of the fixture (Kantar, January 2013) and urges retailers to double the space for market leaders.
Simmons says: “The ale fixture is so vast, and has a wide variety of different styles it can be easy for a consumer to become confused. By working together to ensure brands have the right shelf space and position we will keep consumers coming back to the fixture.”

And sales will continue to increase. It’s a simple tale with a simple message: stock more premium ale, make more money, live happily ever after. 




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