Discovery channel: Craft beer
Craft beer is on everyone’s lips and it’s good news for both UK and global producers of all sizes. It would be impossible to fit a description of every beer launch into this feature, so suffice it to say there are many and the flavours are diverse.
The overall picture shows that consumers are very engaged with craft and they are prepared to experiment and trade up.
While recent data shows that craft is still a small segment of the overall off-trade beer category (it currently represents 1.9% of total off- trade beer, according to IRI 2017), many see this as indicative of the fact that a lot of shoppers are yet to discover craft.
“Around 75% of adult beer-buying drinkers in the UK are yet to buy into craft beer so there’s a great opportunity there,” says Sam Fielding, who heads up a team for the new Maltsmiths brand at Heineken.
Naturally the interest in new beers has led to the emergence of more specialist bottle shops, while supermarkets are also revising ranges.
Claire Young, national off-trade controller at Shepherd Neame, which distributes US craft beer Samuel Adams Boston Lager, says it recognises three types of craft beer drinkers: “The entry-level consumer is price sensitive, looks for something different from the mainstream brands, though not too hoppy and a brand they can trust”.
Then, she says, there is the “core craft consumer” who is interested in new styles but does have favourite brands. These consumers also shop in supermarkets but are less price sensitive. And there is the “craft specialist” who “lives and breathes craft, looks for beer experiences and probably shops at a specialist beer retailer”.
WHAT SHOULD RETAILERS DO?
Andy Roberts, managing director of Wiltshire’s Box Steam Brewery, says the craft beer shopper’s enthusiasm for the new and different makes it hard for producers to build loyalty.
At the moment Brewdog’s Punk IPA is the clear leader with a 28% share of the category, but after this no other brand has more than a 6% share, which gives an idea of how hard it is to maintain brand loyalty.
Roberts says: “Although this will almost inevitably frustrate established suppliers, retailers will gain most from the craft beer category if they keep things moving.
“Exploration is a key characteristic of the craft beer fan, so providing new, interesting and unusual lines will keep these experience-hungry consumers happy.”
Graham Richardson, general manager of importer Heathwick, adds: “Beer drinkers like nothing more than to discover new brands. Having said that, maintaining a range of quality core brands that sell well is also important for traditionalists.”
He adds that, while specialist independent beer stores are important for many brewers, the multiple retailers have begun to expand their craft beer offering in the past 12 months.
He also notes it is important that retailers stock a range of packaging formats as “we are currently witnessing a growing trend for canned craft beer”.
Paul Fallen, managing director of Fallen Brewing Company in Stirlingshire, says the best advice he can offer retailers is to have engaging POS, but he adds: “We have experienced considerable success with in-store tastings and sampling.
“We have also had fun co-hosting evenings and all of these activities have really helped us to build up a sector of loyal returning customers who love our beers.”
Steve Magnall, chief executive at Suffolk’s St Peter’s Brewery, says retailers should stock a broad range of options with a mix of smaller producers and bigger brands. He adds: “Tastings of new beers encourage people to buy something new and these can be very effective.”
Young at Shepherd Neame advises retailers to capitalise on seasonal opportunities, such as barbecues and festivals in the summer. She also suggests siting beer in the chillers alongside meal ideas.
And Fielding at Maltsmiths says the producer recommends that retailers cover off both imported and local beers but should also think about ranging around the key styles: lager, IPAs and pale ales.
“Consumers will look for styles they recognise and then they look at brands. We all have a responsibility to make it simple,” he says.
WHAT’S NEW AND WHICH BEERS HAVE BEEN SELLING WELL?
Box Steam Brewery points to its newcomer, Golden Bolt, a 3.8% abv IPA, which the company says “has been a great hit so far”.
At Heathwick, Richardson says sales have been good for more unusual beers, including those from US craft brewer Tailgate, which it says have “gained significant traction in the trade”. The beers include Peanut Butter Milk Stout, Grapefruit IPA and Watermelon Wheat.
And Fallen has had success with collaboration brews, such as Malibru, a 4% sour which was part of Brewdog’s Collabfest event last year, and the 4.9% saison Train Beer, made with the Good Spirits Company.
Meanwhile, Justin Hawke, owner and head brewer at Moor Beer, and newly-appointed chairman at the Society of Independent Brewers (SIBA), says the producer’s bestseller is Nor’Hop, a 4.1% golden beer.
“It’s a must-stock beer given the recognition and appeal it has with consumers,” he says.
Moor brews at least 30 different beers a year and it has had considerable success with collaboration beers. Hawke says the brewer’s sales were up by 50% in 2016 “and we expect to match or beat that this year”.
Others have found success with listings in multiple grocery retailers. Shepherd Neame says Samuel Adams Rebel IPA has been a success in the UK since its launch last year. The brand is now listed in Tesco, Morrisons and Asda, while its Boston Lager is also doing well and has listings with most of the multiples.
“It’s a great choice for entry-level craft consumers,” says Young.
Carlsberg UK has continued to build its portfolio of craft beers, including its distribution partnership with Brooklyn Brewery. Liam Newton, vice-president for marketing, says: “It is a very exciting time for Brooklyn Brewery right now – just last month we launched Brooklyn Scorcher IPA in cans for the first time in the UK.”
Heineken also announced this year it would be investing heavily in the craft beer arm of its business with the launch of its two-strong brand, Maltsmiths.
The brand, which comprises an American- style IPA and a Bavarian-style Pilsner, was created by two of the company’s brewers at its Caledonian Brewery in Edinburgh.
Fielding says: “With Maltsmiths we wanted beers which would appeal to a craft-curious consumer, so slightly less experienced beer drinkers but people who are experimenting. These are the beer styles we think are big and will work well in multiple retail outlets, but we will add to the range over time.
“We want to make craft beer accessible, so that is why we have started with beer styles drinkers know, but we have added small tweaks to excite people.
“We launched just a few weeks ago but it’s already had a fantastic response.”
Established brewers, such as Meantime, have also ramped up their focus on experimental brews. Successful beers, such as Meantime’s Yakima Red, which started life as a seasonal beer, can join the brewer’s core range if they prove to be successful.
Meantime has launched four beers under its Pilot Series banner in the past six months and it has plans for another eight by the end of this year.
The popularity of craft beer is also sparking demand for beers that tap into other consumer trends, such as alcohol-free and gluten-free.
This is a phenomenon that St Peter’s Brewery, which specialises in these areas, is experiencing, according to Magnall, who says: “Our gluten-free products – G-Free and Dark G-Free – have seen a boom recently.”
The brewer is about to launch Without Gold, a zero-alcohol golden ale, into its alcohol- free portfolio.