Put a lid on it: innovation in PBAs
There were 253 premium bottled ale launches in the past year (IRI) and a leading brewer has warned that too much innovation could damage the category.
Launches have added £28 million to the category in the past two years, which amounts to 49% of all category growth, according to IRI.
But in its 2015 PBA Report, the UK’s leading supplier, Marston’s, warned that “over-innovation” is leading to a high level of churn.
There were more launches in the PBA category than in the rest of beer and cider combined.
But one in three PBA releases has been dropped within two years of launch (IRI) and Marston’s urged the industry to take a more measured approach to innovation.
Senior category manager Paul Warren said: “The high level of NPD launches is leading to a high level of churn. While consumers see the PBA category as highly innovative and interesting, this suggests that much of the NPD investment is not delivering a return.
“The category as a whole would be better served by taking a more focused and long-term view of NPD that is more closely aligned with consumer needs.”
The best NPD launch of the past two years was Marston’s golden ales multipack collection, which is now worth £1.8 million in annual value sales (IRI, year to February 2015).
The next best was Iron Maiden’s Trooper, brewed by Cheshire brewery Robinson’s, which is now worth £1.2 million.
But the top 10 PBA brands deliver 40% of the category’s value while only receiving 15% of shelf space (RBD Shoppertrack 2015) and Marston’s urged retailers to donate more space to the leading SKUs.
Old Speckled Hen remains the top brand, despite value sales falling 1% to £17.5 million. Next is Hobgoblin, which grew sales 2% to £14.1 million.
The best performer was Sharp’s Doom Bar, which grew value sales by 187% to catapult it up to fourth in the chart at £12.7 million, with third-placed Newcastle Brown firmly in its sights.
The other star performer in the top 20 was Brewdog’s Punk IPA, which grew sales 68% to £3.6 million.
Most brands in the top 20 grew sales, but Spitfire, Old Golden Hen and Marston’s Pedigree all suffered value declines, according to IRI.
Three years ago Marston’s set out a plan to see the PBA category grow to £1 billion by 2020, and it said it is on-track to hit the target.
In 2009, the category stood at £280 million and in the past five years it has grown 75% to £490 million (IRI). Marston’s believes the category will grow 106% in the next six years and hit the £1 billion mark on schedule.
Warren said: “This level of growth [since 2009] is only coming as a result of progressive action from brewers and retailers to recruit new shoppers and consumers. We can continue to maintain this momentum by continuing to execute new ideas in three key areas.”
Provided retailers play ball, Marston’s said £176 million will come from improving shopper engagement through initiatives such as mixed packs and own-label offerings, £152 million will come from a better retail environment with more space for the category and £182 million will come from innovations.
It called for a “sustainable innovation pipeline” with a focus on fewer but better innovations that can broaden the appeal of the market.
It is also encouraged to see young shoppers buying into the category. Research firm RBD interviewed a range of shoppers in 2014 and asked if they intended to buy PBAs in the year ahead. It asked again in 2015 and found that 14% more people intended to buy into the category. That was driven by 18 to 35-year-olds, where 45% more shoppers said they intended to buy into the category.
“Healthy growth categories in any sector need to recruit new consumers and PBAs are appealing to greater numbers of consumers than ever before,” said Warren.