Declining beer and cider market has “had a shocker”

24 July, 2015

A World Cup hangover was blamed after the revelation that beer sales have dropped 2% and cider is down 5% in 2015 (Nielsen, year to date to 20/6/15).

Heineken’s trade marketing director Craig Clarkson said the market “has had a shocker”.

He said: “Beer in the last four weeks is in double digit decline and so is cider. Because of that, beer is now down 2% and cider is down nearly 5% in 2015.

“Standard lager is in 7% decline as that’s where the battle was last year with the World Cup.”

But he added: ‘I’m sure it will be fine again by September and we will see growth in the year.”

In the absence of a football World Cup this year, Clarkson urged retailers to make the most of the rugby World Cup, which is hosted in the UK this September for the first time since 1999.

He said: “The rugby World Cup is going to be a huge event in the UK this year. There will be 48 matches in 13 stadia in 11 cities.

“There will be 20,000 hours of broadcast coverage. There will be a trophy tour starting in Edinburgh and heading down the UK in different cities during the build-up.

“It is predicted to add £2.2 billion to the UK economy. From the beginning of June we will be building up how to help stores make an event of the World Cup.”

Heineken believes any growth in the beer and cider market will come from innovation.

Clarkson said: “It’s important to keep Foster’s, Carling, Stella ticking along, they need to be doing well, but growth will come from innovation.

“Three years ago innovation [products released in the last three years] accounted for 1% of our business. Now it’s 17%.

“You need one really successful mainstream innovation and Strongbow Dark Fruit is really propping that up at the moment.”

Heineken’s innovation director Sam Fielding said that it needs to be more disciplined with its innovations and not just throw a tonne of new products at the market every year.

He said: “Shelves aren’t elastic. We have to work with our customers to ensure we are bringing relevant and credible products to the market. We have to be more rigorous and help customers make the most of innovations, especially in convenience. It’s our job to help them have the right range for the right consumer and occasions.”

He pointed to the new rum-flavoured Foster’s Rocks range as an example of a product that can exploit a gap in the market.

Fielding said: “Both the spirits and cider markets are catering very well to the younger end of the market and beer gets pushed out of these occasions and we don’t think it should be.

“We looked to innovate on Foster’s in a way that borrows from spirits and cider, so we launched Foster’s Rocks, a beer that allows Foster’s to start appearing in higher energy occasions. Rum gives it an interesting taste and appeals to the younger end of the market that wants to experiment.”

Clarkson added: “I don’t think the spirit beer category is necessarily a category. Flavoured beer – beer with something with added – is what we are really looking at.

“Desperados Red is now second in the market, with about 12% of the mother brand’s sales.”

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