Beer rides high in new era
For the first time in a decade the UK beer market is showing continued growth, and the retail trade is leading the charge.
Bars are struggling and beer is down 3% in volume in the on-trade (CGA, year to July 12), but beer aisles in supermarkets, independents and specialist retailers are now jam-packed with intriguing brews and the take-home beer market is flourishing.
Volume sales are up 2% and value sales have also climbed 2% to £3.7 billion (Nielsen, year to July 19) after the Treasury gave the industry a helping hand by scrapping the duty escalator and delivering two successive cuts on beer tax.
Consumers at all levels are starting to re-evaluate beer and discovering the old adage that says nobody dislikes beer, they just haven’t found the right style yet.
Premium bottled ales produced by a burgeoning body of British producers have grabbed a lot of the attention, as this sector is the star performer, showing year-on-year value growth of 10% (Nielsen).
A craft beer revolution has swept through the hipster hangouts of Hoxton, where trilby-clad aficionados pair porters, IPAs and sours with artisanal foraged kimchi tacos to their hearts’ content.
It has reached urban pockets of cities as far and wide as Brighton, Bristol, Glasgow and Manchester, where beer is finally seen as a rival to wine in terms of complexity, versatility and suitability for food matching.
But the bulk of sales still come from mainstream lager and this segment of the market has now finally arrested years of declining sales to return to growth in the off-trade.
Spirit flavoured beers and no and low alcohol lagers are also showing double-digit growth, highlighting the innovation brewers are displaying.
Leading retailers from across the trade were in buoyant spirits at an OLN round table event this month as they discussed the resurgence the beer industry is enjoying.
Danielle Jack, Tesco’s technical and development manager for beer, said: “It’s a great time to be working in beer. There’s now a huge focus on beer [in the media and in popular culture], which there hasn’t been for many years. The element of food matching is really important.
“Our sales figures show people are definitely picking up on interesting segments in beer. We are going further than any other supermarket in educating on hops, and we are doing a lot of work with Camra. You would be really surprised how much we all love beer at Tesco. Just as much as people with microbreweries.”
Sarah Hamilton, beer buyer at Oddbins, has also enjoyed being part of the beer revolution that has seen the retailer double its own-label craft beer range.
She has noticed customers becoming more adventurous and said the in-store teams are able to trade shoppers up to interesting beers because the quality on offer is at an all-time high.
Hamilton said: “Oddbins has always been a great platform for engaging with customers and recommending something different.
“People walk into our stores looking for half a dozen cans of mainstream lager but we talk to them and recommend something a bit different.
“A lot of shoppers want to try something new. Our range is ever-evolving as people want to experiment. It all comes down to quality. As long as you can communicate why a beer is the price it is then people are happy to pay it.”
At the other end of the market independent beer specialists are thriving and Real Ale – winner of Independent Beer Retailer of the Year for the past two years at the Drinks Retailing Awards – is similarly bullish.
James Hughes, who is in charge of business development at the Twickenham-based retailer, said: “It is such an exciting category and there are so many interesting new beers coming out all the time. It’s a challenge to stay ahead of it all, but we are able to offer our customers quality and consistency.”
Craft beer wholesaler Pigs Ears Beers is also riding high on the crest of the wave that is the craft beer revolution.
Director Toni Skinner said there is a growing demand among the trade for micro-produced beers that push the category into new and interesting directions, and that those retailers that can provide differentiation to the multiples on their shelves are flourishing.
But despite the retailers’ buoyancy – plus the rise in coverage of beer among the mainstream press and a government that is sympathetic to the industry – there are still a number of challenges.
According to research from Britain’s Beer Alliance, the majority of UK consumers still see beer as homogenous, narrow-minded and less appropriate for a wide range of occasions and consumers than rival drinks categories.
This body – which is made up of leading UK brewers, plus the likes of the British Beer and Pub Association and the Society of Independent Brewers – has therefore launched a £10 million campaign called There’s a Beer for That to educate “the Daves and Debbies of Doncaster” that have “not been reached by the craft beer revolution” about the manifold wonders contained within the beer category.
Many readers will have seen the TV commercial espousing the joys of sharing a hamburger with your pet labradoodle and indulging in cakes and strudels, with a beer for each occasion, and it has hit millions of consumers.
Retailers at the round table were pleased to see investment on beer at a broad level.
“This is all about bringing beer to the fore and that’s fantastic,” said Jack. “There’s now a huge focus on beer, which there hasn’t been for many years. The element of food matching is really important.”
Hughes added: “This campaign is about being passionate about it and getting it out there to more people. In that sense I think this campaign is great.”
Campaign director David Cunningham faces a daunting challenge, and one which boundless diplomacy, because he is attempting to unite a notoriously fractious industry and appease multinational lager producers and tiny craft brewers alike, not to mention independent retailers and leading grocers and the on-trade.
Beer enthusiasts have previously criticised the alliance for focusing too heavily on mainstream lager, and Skinner said the Twitterati were annoyed because the BBA set out to “reignite Britain’s love of beer”, but she said it had already been reignited by the craft beer movement.
But Cunningham pointed out that it may have been reignited in hipster pockets of London, but it hadn’t spread to the majority of the UK.
“Craft beer is an important movement but it’s still relatively small and it’s not getting out there to the whole of the UK, and if we can get the message out to the Daves and Debbies of Doncaster that’s a good thing,” he said. “It’s been ignited in certain urban areas but not across Britain. We want to reach places the craft beer revolution hasn’t touched.
“There are some sceptics out there, three or four hardened people on Twitter are nervous and calling it a Trojan horse. Some people are nervous about big brewers riding on the coattails of craft beer.
“We are putting £10 million behind this campaign to promote beer and to get people to see other categories as our competitors, not each other. Everyone can benefit if we grow the market for beer. The big brewers are putting investment behind beer at a total level.”
Big lager brewers and craft beer producers often have conflicting interests – just as independent and multiple retailers frequently clash – and uniting everyone for a campaign is difficult.
But Cunningham wants the industry to see rival categories like wine and spirits as the enemy – not one another.
Jack at Tesco agreed that large producers and their craft counterparts need to work in tandem, and stressed that both can learn from one another.
She said: “Mainstream big beer’s quality is consistent – it may be 24 cans of lager but you know what to expect. It’s great that a lot of small producers are having a go but there is bad beer out there, which can damage the craft name. People can be educated to assess what makes a good or a bad beer.”
Hughes at Real Ale also pointed out that there are so many new brews coming out all the time due to the explosion in microbreweries across Britain that it would be easy to constantly change the shop’s range.
But he argued that retailers need to be incredibly vigilant, taste everything that comes in – something Skinner at Pigs Ears Beers struggles to due to the overwhelming tide of new arrivals – and ensure they deliver “quality and consistency” rather than change for the sake of change.
Richard Dinwoodie, director of Uttobeer in Borough Market, said the independent sector is struggling due to the improving craft beer sections in supermarkets.
He said: “The supermarkets are becoming more aware of beer and listing better beer. People can now get it cheaper than in independents. I couldn’t buy a slab for a tenner, but supermarkets can and they say they are making a margin out of it.
“There are now independent retailers that can’t support independent breweries because they can’t compete with the multiples on price.”
But Hughes said independents simply need to stay ahead of the game and impress shoppers with quality, consistency and excitement to compete.
He said: “As a specialist retailer our challenge is to stay ahead of what’s going on. Our customers are very knowledgeable. We have to test everything that comes in and know a lot about the breweries. There is a lot of work for retailers to do. The challenge is not to explode the category, just make sure you are putting good quality in that you would buy and that your customers want to drink. People are looking for quality, flavour and consistency.”
He added: “We can’t be snobby about a campaign that’s getting people into beer – everyone has a responsibility to do that.
“Seeing more people coming through the door and buying beer will determine the success of the campaign for us.”
Cunningham said: “In the short-term we hope to track attitudinal changes through research. Do people think beer is now more of a quality drink, better for more occasions? Then we’re hoping this leads to a behavioural change that brings the category back into growth. This campaign alone what do that – it’s what the whole industry does that will.
“Spain has been doing this campaign for 10 years and it took seven years to stem decline there and get it into growth. The backers and big brewers recognise that this needs to be a long-term campaign to get results.”
A major challenge the industry faces is consumer education, particularly when compared to the wine category.
Retailers were full of praise for the job the wine trade has done in educating shoppers about the different colours, regions, grapes and styles of wine on offer.
They all said a universal style guide would benefit the industry, but an ensuing pernickety debate on definitions of styles showed it would be impossible to please everyone when creating this guide.
Cunningham said: “Getting people to agree on styles is a huge task. It all takes compromise, putting some beliefs aside. People will say some things are wrong.
“People get passionate about [small stylistic differences between beers] but they have lost sight of the consumer. We are trying to make it accessible. Give us a break and let us bring people in.”
Skinner said: “You can’t ever get a comprehensive style guide for beer,” said Skinner. “It’s too broad, and people have their own interpretations.”
She added: “Any style guide can’t just focus on big beer, to break down that us and them. If there’s a coherent idea of styles we can pass down to our customers that would be very beneficial. If you make a concerted effort to inform people and we benefit just as much as Heineken does then we can’t complain.”
Hughes added: “Flavour maps work well for whisky – peaty and smoky to light and floral and everything in between – and something like that for beer would be really helpful.
“You have to go to the lowest common denominator to start with. People in the know are already in the know.
“Wine has taken 30 years to get to this point [where consumers are educated about grapes and styles]. We need to fast track that without dumbing it down too much. Most people only know a lager, there is Stella, and that Guinness is a stout. We can educate them better.
“People need to be careful not to treat beer like a closed shop, saying if you don’t know all about it you can’t love beer. It’s important not to over-intellectualise it. It’s about people enjoying good beer. It’s an exciting category. This campaign is about being passionate about beer and spreading the word and that’s great.”
Twitter is a key battleground for Britain’s Beer Alliance as it seeks to win customers from wine and spirits, and it has invested heavily in an initiative called #BeerMatch. Users tweet @ BeerForThat and mention what they are planning to eat, and receive beer recommendations to go with it.
The database has automated responses for 750 recipes and 1,000 beers – created by independent beer experts including Steve Livens and Jane Peyton – but if the meal is not on the list someone at the BBA will send back a tailored response.
Retailers of all sizes can join Britain’s Beer Alliance and it will promote their shops for them. Cunningham said: “We have 25,000 Twitter followers and 130,000 Facebook fans. We want to talk about what people are doing. You can join and we will talk about what your store is doing. This will amplify it.”