Strong sales driving a return to ale's heyday
The ale category is firmly on course to return to the glory days of the 1980s after enjoying strong sales growth over Christmas, according to a leading supplier.
Ale continues to outperform total beer and sales grew by £6 million over Christmas (Nielsen, 12 weeks to January 4).
It now accounts for 15% of total beer, but makes up almost 30% of the market’s growth as it continues to eat away at lager’s share and attract new consumers.
Neil Jardine, retail sales director at Greene King, told OLN: “It feels like ale has come of age – again – and is coming back in terms of importance to the beer category to the levels we saw 20-30 years ago, when ale dominated the beer market.
“We are coming from a lower base but its importance to beer has increased significantly.”
The total beer market grew by just under £21 million in the 12 weeks to January 4, while volumes remained flat.
But ale saw strong volume and value growth – a continuation of a trend that began in 2010 and shows no sign of letting up.
Premium bottled ale accounted for £5 million of the £6 million growth in ale over Christmas.
Within that £6 million growth figure, 63% came from Greene King alone.
This means that nearly £1 out of every £5 of growth seen in the total beer category was driven by Greene King.
“We are delighted with that performance,” said Jardine. “It vindicates a lot of the focus and investment we have put behind premium ale for a number of years.”
He refers to the fact that Greene King makes up more than half the advertising spend in the PBA category.
The Suffolk brewer has consolidated its position as the market leader: it holds a 21.6% value share and a 23% volume share, putting it comfortably ahead of its closest competitor Marstons.
Its portfolio is showing double-digit growth – with value sales up 16% and volume sales up 14.5%, driven by Old Speckled Hen, which is up 19% - and Jardine is confident this will continue if the PBA category is given the shelf space it deserves.
“We are pleased with the space our customers gave PBAs this year,” he said. “The amount of space PBAs are given has risen 30% in recent years but it still has a way to go.
“Total liquor was in decline last Christmas and just about flat this time around, and retailers are looking for categories that show growth and want to support them.
“PBAs provide a very strong commercial proposition: they are sold at a premium to other beers and offer greater margins and are less dependent on price promotions.
“In 2011 the category sold 60% of volume on promotion in the four weeks to Christmas, but this year it was 49%.
“They are bringing new consumers into beer. Old Speckled Hen brought 140,000 new shoppers to the ale category in the Christmas period, according to Kantar.”
Retailers can help drive further growth and boost profits by selling PBA multipacks and giving the category more space in the convenience channel, according to Jardine.