Premium beers pull ahead

The days when British holidaymakers demanded that the bars they frequented on their package trips to the Costa Brava served fish and chips, tomato ketchup and English keg beer are ending. Britons, it seems, are becoming more adventurous in their choice of holiday destination – and in what they eat and drink when they get there.

This growing cosmopolitanism in the UK is good news for manufacturers of premium imported beers, which can expect to see sales of their brands continue to grow as a result of new-found world awareness.

According to the latest figures from research company Datamonitor, consumption of speciality beers per capita in the UK doubled between 1994 and 1998. Although volumes (0.024 litres per head last year) are still minuscule, future growth is likely to be at similar levels. By comparison, per capita lager consumption over the same period fell from 54.4 litres a head to 54.2 litres, while ale and stout consumption fell from 55.6 litres to 54 litres.

The UK-brewed premium products should also continue to enjoy increasing sales, because companies which operate pubs across the country are putting their efforts into encouraging drinkers to trade up to more expensive brands, to make up for the general drop in volume sales.

Consumers have proved they are prepared to pay a premium price for these products, placing a greater emphasis on the quality than the quantity of product they consume. This has led to significant sales increases in the premium beer segments. After alcoholic soft drinks, premium speciality beers is now the fastest-growing beer category in the UK. Indeed, premium segments account for five of the ten fastest-growing segments in the UK market.

Walk into almost any pub, even those which actively seek to resist change, and the consumer is likely to be confronted by a wide range of premium ales and ciders, with stylish labelling and names to match.

This is partly a result of the simple mechanics of demand, but also because most UK pubs are owned by large breweries, all of which are actively seeking to push premium products.

The two other sectors of the market – cider and perry (pear cider), and alcoholic soft drinks – both saw growth, with consumption of ciders and perrys up from 8.4 litres each in 1994 to 9.2 last year, and alcoholic soft drinks fizzing from nothing in 1994 to 1.4 litres in 1998.

For many drinkers, their choice of beer brand is very much a lifestyle and fashion statement, particularly among young consumers. As Datamonitor observes: “Just as young people like to be seen in the most exclusive and fashionable clothes, so they want to be seen drinking the most fashionable and exclusive beers.”

One direct consequence of premium beer’s transformation into a fashion statement has been an increase in pace of new product launches in an attempt to keep drinkers interested.

The Nineties have seen a fundamental diversification of beer drinkers’ tastes in the UK. While many consumers would once have defined themselves strictly as ale, stout or lager drinkers, the majority of UK beer drinkers now have minimal category loyalty.

According to Euromonitor, this has created significant opportunities for the leading brewers. While growth in sales of traditional beer products has been relatively stagnant, the increased willingness of consumers to experiment with innovative products has created lucrative high-growth niches on the fringes of the market.

The strong growth in the alcoholic soft drinks sector may come as a surprise to some marketers, given predictions only a few years ago that the whole sector would disappear, after it came under heavy attack for allegedly encouraging underage drinking.

However, it seems that the sector’s marketers have successfully concentrated on products such as pre-mixed cocktails, which appeal to 18- to 24-year-old drinkers and to women in particular.

The latest Datamonitor research, however, does show that, after an initial surge in consumer interest, the alcoholic soft drinks category has reached a growth plateau, forcing many of the secondary brands out of the market.

But the report adds: “[The alcoholic soft drinks’] legacy was to create a consumer awareness of and demand for flavoursome, ready-to-drink alcoholic beverages. This led in part to the rapid development of pre-mixed spirits – a category which appears to have considerably more staying power than alcoholic soft drinks.”

The report continues: “It can be argued that brands such as Hooch, which survived the backlash against alcoholic soft drinks, have now been subsumed into the pre-mixed spirits category, and have benefited by association from the success of ranges such as Bacardi Breezer. The pre-mixed spirits category suffers from less controversy and is more adult-oriented than flavoured alcoholic beverages.”

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