Premium bottled ales: lightbulb moments

10 October, 2014

Greene King has overtaken John Smith’s supplier Heineken to become the market leader in the off-trade ale category for the first time.

It now accounts for 18.3% of the market by value sales, compared to 17.6% for Heineken (Nielsen, year to September 13). This highlights the continued success of premium bottled ales and the downward spiral gripping canned products. Greene King’s portfolio is in 12% growth while Heineken is declining at 13%, so the gap should only continue to widen, and it may not be too long before third-placed Marston’s overtakes Heineken too.

“We are in a category that has been showing sustainable and controlled growth for more than a decade,” says Neil Jardine, head of off-trade at Greene King. “Penetration has gone up to 28% but there is still a huge opportunity to grow as there are so many consumers to still target.”

New consumers are attracted because it is an exciting category, full of innovation and NPD – there have been 365 launches in the premium bottled ale sector in the past two years (Marston’s PBA report 2014), putting it way ahead of lager, and these new drinks have added £44.5 million to the category.

This year research firm RBD surveyed 767 drinkers and found that bottled ale was the most innovative alcoholic drinks category, with 33% of the vote putting it ahead of wine, lager and cider.

“Shoppers realise the PBA category is delivering more innovation and new products than any other category,” says Paul Warren, senior category manager at Marston’s.

“This is fuelled by both existing brewers and the growth in new brewers hitting a 70-year high, supplying retailers with a constant pipeline of new products and brand extensions.”

He adds: “The majority of PBA drinkers are experimental by nature and look to add to their repertoire of tried and trusted brands on a frequent basis. This need for discovery makes innovation and NPD in terms of range an essential part of maintaining the appeal of the category.”

Crawford Sinclair, director of sales at Innis & Gunn, which grew off-trade sales by 18% in the past year and now has the top SKU in Scotland’s PBA category, agrees innovation is crucial to bringing in new shoppers and driving value in the category.

“We have launched several products over the past few years into our core range and limited and seasonal products, which are really important if you are going to encourage consumers to move into the category and trade up,” he says. “PBA’s counterpart in the on-trade is cask ale, which has done a great job of bringing very flavoursome beer to consumers and bringing in interesting seasonal brews, and the off-trade can learn from that.

“The way cask ale has grown can be replicated in the PBA category.” Sinclair adds: “Every year we launch three or four limited-edition beers that go quickly but generate excitement and add value because they are more expensive.”

Black Sheep has just launched a new collection called The Flock, a mixed six-pack that includes old favourites along with two new PBA launches – All Creatures and Velo.

Velo was launched as a bottled beer this summer, following its success as a seasonal cask ale, celebrating the Tour de France passing the brewery when it started in Yorkshire.

Jo Theakston, sales and marketing director, says: “For existing fans of Black Sheep, The Flock offers the chance to buy a selection of their favourite beers and, for those looking for their first taste of our products, it is an opportunity to explore the breadth and depth of what our brand has to offer.

“While we have sold limited beer selections direct to customers online and at our visitor centre, this is the broadest Black Sheep collection ever and the first offering created especially for multiple grocers.”

Jardine agrees that innovations such as multipacks and mini-kegs are as important as new beer styles, but stresses that core brands are the real key to the category’s success.

He says: “Innovation is important. Old Hoppy Hen was one of the category’s most successful launches for a long time. Whenever we have moved into new territories the Old Speckled has been successful. We have another evolution of it coming out soon.

“We launched our innovation brewhouse to do smaller runs and be more creative and we are gaining some traction with these craft products. We recognise that consumer tastes are evolving and sometimes to bring new consumers in you need a different flavour profile.

“But our focus is very much on our core brands. If we were in a category that was extremely mature, had 70% penetration and flat sales and we were scratching our heads about how to grow it we would be challenging ourselves all the time on new products. But we are in a category that is showing growth and there is a long way to go.

“Core products are getting more shelf space and we are delighted with the extra space key retailers are giving to big PBA brands.”

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