Beer and cider is in strong growth, driven in part by the trend towards premiumisation.
The beer and cider category is in a very healthy state and is currently in very impressive growth at +5.4% MAT (value), with beer at +6.1% and cider at +3% MAT value growth according to Nielsen.
Driving this growth are several factors, but one of the most promising is the increased demand for premium products.
Identified as the We’re Worth It driver in Heineken UK’s Greenpaper, the largest piece of category advice ever developed by the company, the driver focuses on how bolstering the premium options in store is critical to both maximising sales and ensuring the category’s success.
“Recently premium brands have flourished, as consumers have increasingly looked to trade-up to more premium offerings in the category to treat themselves at home,” comments Toby Lancaster, Category and Shopper Marketing Director for Heineken UK.
One of the fastest growing alcohol brands in the UK off trade, Birra Moretti has experienced a growth of +134% in the past year (Nielsen). This is largely due to consumers’ growing expectations of a strong food and drink offering in stores, as they look to create a more quality experience when in their home.
With a third of all drinking occasions now including food (Kantar) and 43% of large single bottles purchased to accompany a meal, a huge revenue stream has been created for retailers who have cross-merchandised food and drink to drive sales.
“Whether dual-merchandising Foster’s with snacks ahead of a big sporting game or Birra Moretti next to authentic Italian dishes, consumers can easily get the ‘full package’ when looking to elevate moments with friends and family,” adds Lancaster.
Furthermore, the No, Low and Gluten Free Beer and Cider category is an area that has truly boomed in the last year, experiencing huge growth in the impulse channel (+56% according to Nielsen).
Driven by the fact that one in five UK adults are now teetotal (Office For National Statistics) plus shoppers who are keen to make positive choices, without compromising on taste.
Leading the Low and No category is Heineken 0.0, which has swiftly become the fastest growing brand in the segment, adding +239k incremental shoppers to the category (Kantar).
Overall the cider category is in a very healthy state and currently experiencing growth at +3% MAT (value) in the impulse channel (Nielsen).
Mainstream flavoured cider is currently in +13% growth (Nielsen).
With the appetite for flavoured cider and premium apple alternatives on the rise, Strongbow is a brand that is evolving with the landscape.
Strongbow Dark Fruit is the number one brand in the mainstream flavoured cider category and is currently experiencing +20% growth (Nielsen), demonstrating its importance as a must-stock for retailers.
Premium flavoured cider continues its monumental success and is currently in +43% growth (Nielsen).
“Independents have an advantage over multiples due to convenience of location and local knowledge,” comments Lancaster. “As shoppers will be visiting their local independent store to purchase beer and cider to be consumed within a few hours, retailers should make sure products are available in a pack size to suit this occasion such as single bottles and four packs.”
Retailers should also ensure that seasonal events (such as the UEFA Champions League and bank holidays) are promoted in store to remind customers of the key moments they should purchase for, Lancaster suggests. Using creative POS and having clear signs directing customers to the beer and cider fixture means that independents will not lose out to competitors.
“What’s more, ensuring that the chiller is fully stocked and easy to navigate, by ranging categories and pack formats together, will improve the shopper experience, driving repeat sale,” Lancaster continues. “Finally, with independents being part of the local community, retailers must create a welcoming atmosphere in store to show their community spirit – a simple hello on arrival can make all the difference to customer experience.”
80% of beer and cider sales are sold in single or small packs (Nielsen) and customers are twice as likely to purchase for consumption from the chilled range (HIM) so ensuring that the chiller is fully stocked with customer favourites in the right range and in the right pack size, such as a four packs and large single bottles, is essential.
In doing so, shoppers can find exactly what they need quickly and easily, reducing the chance of them going to search for beer and cider elsewhere.
43% of large single bottles are purchased to accompany a meal, Lancaster points out. As such, there is a huge opportunity for retailers to be more adventurous with their cross-merchandising to help showcase perfect pairings of food and drink and increase basket spend.
Convenient formats, such as single bottles and four packs, should be dual merchandised next to food pairings to ensure maximum impact and maximum sales potential. Getting the pairing right and importantly making them easy to shop and discover, will maximise profits through increasing the basket spend by shoppers. Check out www.tasteofcidersandbeers.co.uk for a guide to food matching all of Heineken’s products.
With the No, Low and Gluten Free beer and cider category in huge growth at +24% (Nielsen), retailers should not underestimate the importance of incorporating a range into their stores.
Acknowledging this trend, Heineken 0.0 began the year by fronting the biggest Dry January Campaign it has ever undertaken.
With the category not just limited to January, Heineken will be continuing this momentum throughout the year by educating retailers about how they can merchandise a new or growing NOLO range within their stores. This will include helping retailers introduce new tactics in store such as Zero Zones to not only meet customer demand, but to continue the growth of the category.
Within the premium flavoured Cider category, exotic flavours are increasing in popularity, driven largely by a younger generation who are looking for fruit ciders in original, unique flavours.
As such, in March 2019 Heineken UK launched Old Mout Pineapple and Raspberry.
Scoring high in taste tests, Old Mout Pineapple & Raspberry contains the same 4.0% ABV as the other Old Mout variants, resulting in a refreshing cider bursting with a tropical fruit flavour.
Like every one of Old Mout’s ciders, each has a natural taste including no artificial colours, flavours or sweeteners.
“Craft beer is now worth over £150 million as a category and Nielsen research predicts it will reach £255 million in the next two years,” says Lee Wild, Category Manager at Costcutter Supermarkets Group. “With the average craft beer price per litre of £4.46 – almost double that of the average branded beer – it is a major opportunity for our retailers to increase premium sales.”
Throughout the past year, Costcutter has tapped into the booming craft beer and cider trend as part of a major drive to help retailers optimise sales in the flourishing market.
The group has partnered with online beer distributor EeBria Trade and introduced over 80 craft breweries to Costcutter retailers. This allows them to buy hundreds of products online, which are delivered directly from local breweries to store.
Costcutter has also launched a comprehensive guide, combining national market research with its own Shopper First customer profiles, to give each of its retailers store-specific data on the best products to drive footfall and increase sales. The new guide is tailored to each of the group’s individual store locations, showing which brands will attract the most shopper interest and basket spend.
Badger Beer, from Hall & Woodhouse, has launched its first ever outdoor advertising campaign.
The series of 48-sheet and 6-sheet adverts carry the strapline: ‘Whoever said you can’t buy great taste was lying’, and feature across key roadside sites in both digital and non-digital format nationally, as part of Badger’s fully integrated media campaign for 2019. The adverts also feature within Badger’s social media campaign launching at the same time.
Digital screens of the adverts will be positioned outside 60 stores nationally, featuring a bottle of Fursty Ferret. The 48-sheet landscape posters will feature Tangle Foot in 30 key urban sites nationally as well as 19 key roadside sites within Badger’s Dorset heartland. Six-sheet portrait posters featuring Tangle Foot will also be positioned in 16 national urban roadside locations.
The national roadside adverts will feature a Tangle Foot bottle whilst the Dorset adverts will feature a Tangle Foot bottle as well as a cask handle and pump clip.
Sarah Pace, Brand Manager at Badger Beer, says: “We are extremely excited to be launching our first ever outdoor campaign, which highlights the great taste and quality of our beers. The campaign will also build on the relaunch of our brand just 10 months ago and continue to grow brand awareness, both nationally and within our Dorset heartland. With this awareness-boosting campaign we aim to increase our rate of trial and ultimately our own base of loyal customers.
“Going live on 20 May, the campaign will also include sites at key railway stations within our heartland, featuring 48-sheet posters by the platforms and carrying the same strapline: ‘Whoever said you can’t buy great taste hasn’t been to Dorset’.”
Following a rebrand last May, the redesigned Badger Beer range is now outperforming the premium bottled ale market on a MAT basis, with the Tangle Foot bottle growing at 8% in value, year-on-year (Nielsen).
“With summer on the horizon – which will see Brits firing up their BBQs and tuning in to another season of top sporting events – retailers have a real opportunity to drive sales, so it’s important to ensure they’re stocking the products that consumers really want for the occasion,” comments Sharon Palmer, Head of Trade Marketing, Budweiser Brewing Group UK&I.
One key area to maximise is the continued trend for moderation, Palmer suggests. It’s been the buzzword on everyone’s lips over the past year, but the truth is, it’s way more than a passing fad or trend. It’s a way of life for an increasing number of the consumers – 73% of us are trying to lead a healthy lifestyle (McKinsey).
We’re increasingly looking to reduce our alcohol and calorie consumption and as a result, are choosing low and no alcohol drinks – particularly at occasions such as BBQs which might take place earlier in the day. In fact, the no and low alcohol beer segment is growing at nearly twice the rate of the 5% ABV+ segment (9% vs 5% according to Nielsen).
“While consumers may be drinking in moderation, they are also willing to spend a little more and treat themselves when they do drink,” adds Palmer. “Strong, premium brands, which give consumers high-quality ingredients and great experiences will keep winning over shoppers.”
In the low-alcohol space, Michelob ULTRA is Budweiser’s latest beer to land in the UK.
Brewed to 3.5% ABV and with 79 calories per 355ml can, it responds directly to the trend for Brits leading an active lifestyle and wanting a light beer to complement this.
Bud Light has become the second biggest contributor to category growth in the core lager category, with 8.5% of Bud Light buyers being new to beer (Kantar).
“Chilled beer is a key point of difference for independent retailers, so keeping the fridges well stocked is crucial,” Palmer recommends.
Slim cans seen from the likes of Michelob ULTRA chill faster than their glass equivalents, providing shoppers with a chilled serve straight away. It’s also important for independents to cater to the social and sharing aspect of these occasions – making sure they stock multi-packs where possible as well as single pack beers.
“Another way for independents to compete with the multiples as we approach the summer season is to ensure they’re tapping into key cultural moments,” adds Palmer. “For example, why not create some signage and display around this year’s Champion’s League Final, or Women’s World Cup in June? It could be as simple as saying ‘Everything you need for the big game’, but it’s vital for retailers to use clear and visible signage in store to help shoppers navigate what products and deals are on offer.”
Last summer, both the value (+13.4%) and volume (+12.6%) of beer sales increased over the World Cup period (Nielsen), highlighting the impact these sorts of occasions can have for retailers.
Budweiser has become the Official Beer of the England Women’s Football Team ahead of this year’s Women’s World Cup.
“To drive differentiation, independents can help shoppers to find all of the ingredients and garnishes they’ll need to create the ‘perfect serve’ in one place – making the shopping experience easier – like placing fresh limes with a multi-pack of Corona,” Palmer suggests.
These small touches in store can really appeal to shoppers, particularly when they may be on a last-minute dash to their summer party, BBQ or picnic. To tap into the more reactive shopper habits, independents need to be prepared and help make the shopping experience as easy and convenient as possible for their customers. This includes signage in-store directing consumers to key seasonal items, store layout to ensure the shopper journey is simple and cross-merchandising.
“Cross-merchandising will make it easier and more convenient for shoppers to get everything they need in one place – particularly if they’re on their way to a BBQ, dinner party or simply to meet up with friends and watch the Women’s World Cup,” Palmer continues.
This can also help to increase average spend. For the summer BBQ occasion for example, retailers should bring together essentials such as ice, beer, burgers and hotdog buns, as well as snacks like chips and dips to create a wider package offering. With this in mind, it’s also important to research which beer and food pairs well together. Bud Light is a great beer to serve with iconic BBQ sharing platters such as burgers, chips and dips.
“Retailers can also use their merchandising as a way to tap into key cultural moments that consumers may be shopping for,” says Palmer. Let’s use the upcoming Eurovision as an example – why not get creative and run a promotion that matches beer and food pairings from around the world. A platter of fresh meats and cheeses would be a good option to represent Belgium, for example, particularly when combined with a refreshing Stella Artois, which has a meaningful legacy of Belgian brewing heritage – 600 years in fact.”
“The cider category continues to perform strongly in the UK, with value sales of £1.18 billion across cider and perry in the off-trade – up 5.3% year-on-year,” explains Darryl Hinksman, Head of Business Development at Westons Cider.
“Sales of fruit ciders are flourishing, and this is driven by the vast number of consumers seeking out sweeter, refreshing flavours,” explains Hinksman.
Fruit ciders represent 35.9% of volume sales in the off-trade and this is up 11.75% year-on-year, while in convenience, fruit ciders are worth £176million, up 12.7% according to IRI.
“Up and down the country the thirst for fruit cider is growing. These drinks are bringing new consumers into the cider market by broadening appeal for non-traditional cider drinkers such as women and younger drinkers. As a result, fruit cider is driving incremental sales. Based on the growing demand for fruit cider nationwide, we expect it to account for half of all cider sold by 2023,” adds Hinksman.
Last October, Westons Cider released Stowford Press Mixed Berries in retail channels. Available in 4 x 44oml cans at 4% ABV, it is a well-balanced and bright fruit cider with a burst of berry flavour.
“While fruit ciders are becoming increasingly popular with shoppers, apple cider continues to have a big role to play in the category. This is especially true for premium and traditional apple ciders such as Henry Westons,” comments Hinksman.
Currently, apple cider represents a 56.7% share of the off-trade market and this is growing 2.5% year-on-year, while apple cider has a 62.1% share within the convenience channel, IRI data reveals.
In September, Westons Cider added to its successful Henry Westons brand with the launch of Henry Westons Aged Finish. Released to broaden appeal for its category-leading brand and leverage the success of the number 1 traditional crafted cider, Henry Westons Vintage, the new offering is a bright and sparkling medium dry cider aged for up to 180 days.
“Henry Westons Aged Finish is an accessible cider that which will drive interest in traditional crafted liquids, thanks to a great depth of flavour and a lower ABV,” continues Hinksman.
“In the off-trade, cans are growing faster than any other format at +11.5% (IRI). They’re also claiming 53% of all off-trade sales. Shoppers love cans because they’re easy to chill, they’re recyclable and they’re lightweight.
While glass bottle ciders represent 32% of off-trade volume, this format is dipping in popularity, down 0.5% year-on-year (IRI).
“Interest in low-alcohol drinks is growing and we’re seeing new, younger – and more affluent – consumers purchasing these products,” says Hinksman.
Many consumers aren’t avoiding alcohol entirely. Instead, they might be ‘mid-week moderators’, curbing their alcohol consumption during the week and, in doing so, staying loyal to the parent brands they know and enjoy.
“What’s great about low-alcohol ciders is that they tend to taste the most like their parent brand,” Hinksman explains. “However, we should remember that low-alcohol is still a relatively small part of the cider market overall.
Space tends to be at a premium within convenience stores, so retailers and store managers should take care stocking to ensure this space is maximised for turnover and profit.
“We’d recommend that retailers ensure out of stocks are minimised by carrying a limited range of the best-selling products, with at least two facings per product – rather than trying to fit in one pack unit of every cider available,” adds Hinksman. “Fruit cider is currently around a third of total cider, therefore it should take up around a third of the cider fixture space.”
Looking for quality
As the sun comes out, our thirst increases so we like to drink beers that we can have more than one of – this means lager or lower ABV ales. Beers that are hop forward, but have a lower bitterness than your super-strength IPA’s, are more popular.
“The other big trend in beer is the fact that customers are often drinking slightly less but looking for a better beer to drink,” says Adam Keary, Sale Director at Camden Town Brewery. “Drinkers are prepared to pay a little more to get a great quality beer that they’ll enjoy rather than buy cheaper beers just because they can drink more.”
Camden Town Brewery is about to launch Week Nite, a full-flavoured lager, which is limited to only 3% ABV. If higher ABV beers are for the weekend, then this one is for the weeknights.
“We’re typically seeing that customers are drinking slightly less beer, year after year, so volume sales for the category are down,” adds Keary. “That said, the drinkers are looking for better quality beers and are prepared to pay for these so we are seeing value sales increase on last year.”
The macro trend of health and wellbeing is definitely apparent in the beer trade as customers’ “going out” behaviours are changing, whether that’s ordering lower ABV drinks or having nights off from the booze altogether.
Premium world beer
Molson Coors has launched premium world beer Pravha across the UK off-trade.
Pravha is a lighter tasting pilsner from the brewers of Staropramen and has all the iconic bold flavours of a high quality Czech pilsner, but is crisp, light tasting and refreshing.
Tapping straight into the consumer trend for premiumisation, its growth reached 87.4% last year, making it the fastest growing 4% ABV lager in the top 20 on-trade brands (CGA). Within the premium beer category as a whole, the largest value growth is being driven by world beers, like Pravha, which are up 15% and delivering £30 million year-on-year (Nielsen).
Molson Coors is investing heavily into Pravha this year, with a four phase total trade launch activation planned, worth over £5million. As part of the first phase, Pravha’s packaging has undergone a complete redesign. This includes a new embossed bottle and fully enclosed 4 and 12 packs, using high quality finishing and multiple textures to encapsulate its distinct yet accessible offer within the premium space.
Alongside the new packaging, a national advertising campaign is targeting key cities including London, Birmingham, Manchester and Edinburgh. The second phase will see the roll out of in-store promotions and sampling over the summer months. Phases three and four will hinge around key seasonal moments and growing repeat customers.
Alpesh Mistry, Off-Trade Sales Director at Molson Coors, said: “We’re making a multi-million pound investment in Pravha and we believe this represents one of the biggest single investments into the world beer category over the next year or so. Pravha is a category defining beer and already one of the most popular new lagers in the country, despite being a relatively new brand to the UK market. This shows just how strong consumer appetite is for world beers.
“Launching Pravha at scale in the off-trade is another signpost of the journey we’ve been on at Molson Coors to create a really balanced portfolio with premium and mainstream brands. Our ambition is to make Pravha a leading world beer and our launch strategy will ensure it’s unmissable on retail shelves for our customers and consumers.”