UK: Beer responsible for almost half of all on-trade drink sales in the UK

Beer is responsible for almost half (49.4%) of all on-trade drinks sales in the UK, followed by spirits (25.1%), wine and champagne (16.9%), and cider at 7.5%, according to CGA OPMS MAT data to 30/12/2017, The Morning Advertiser reported on April 10.

The same data shows lager dominates the beer category, taking a 69% value share of the market.

Not only does lager take the lion’s share of the market, but it is also the only sub-category in growth at 0.7%.

The mainstream market, however, is experiencing decline of 2.2% in value and 4.7% in volume as consumers seek more interesting and flavoursome options that are now available.

As a result, world and craft beers are picking up in value and volume terms, with world beers now accounting for 16% of value sales (up 10.9% year on year).

This segment has contributed £190 mln to the beer category, with 89% of volume sales coming from the top 10 brands.

Craft, which is lauded as the superstar of beer, is growing at 8.4% in value, contributing £65 mln to value growth.

Although craft is championed by many in the on-trade, it only accounts for 7% of value sales, with 22% of volume sales coming from the top 10 brands.

This figure could be set to rise, as new brands and styles are launched into the segment and more consumers become interested in it.

Kantar’s Craft Beer Omnibus Survey data for September 2017 showed only 11% of consumers claimed to drink craft beer weekly.

Despite this low figure, there’s an estimated 7.5 mln Brits who call themselves ‘craft-inquisitive’.

“This means they mainly drink mainstream beer, are interested in craft, but aren’t buying into it very often,” says Diageo senior category strategy manager Clare Moscrop.

“This group has three main barriers to purchase when it comes to craft beer: value for money, confusion over choice, and concerns that the quality will be poor and that the taste will not match their expectations.”

Therefore, there is a huge opportunity to trade up into these segments, away from mainstream beer, by simplifying what is on the offer and focusing wholly on quality, she adds.

Guinness’s innovations manager Katie Hunter explains how the brewer’s new Open Gate Brewery Citra IPA and Pilsner play familiar against new.

“Our two new highly crafted beers sit in the white space between mainstream and craft beers – enabling consumers to trade up from mainstream beer with the assurances of the Guinness brand,” she says.

Guinness’s Hop House 13 is an example of how brewers are widening their horizons and acting on new consumer demands.

Now one of the top 10 world beers, it is also demonstrative of the success that can come from innovation by a well-known brand.

Hop House 13 has sold 24.5 mln pints in the on-trade since its launch in 2015 (CGA OPM to 24/2/18) and the two new launches from St James’ Gate will look to replicate this success.

“As brewers, our goal is to introduce people to the more flavoursome possibilities of beer,” explains Guinness lead brewer Peter Simpson.

“It’s no secret that many people are moving away from mainstream beers and seeking more flavoursome options.”

Although more options can be daunting, to counter this flavourful brands can bear a small similarity to the mainstream to encourage trial among a wider consumer group.

The current desire for more flavoursome beers is no doubt driving growth of craft and world beer.

Throughout history, in one way or another, beer has played an important role in British society and continues to do so, yet it has progressed further in the past decade than at any other time and shows no sign of slowing.

This feature was brought to you by The Morning Advertiser in association with Diageo as part of a project looking at the history and future-scope of beer in the on-trade.

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