A vast range of new products and low- and zero-alcohol drinks offer the biggest opportunities in beer & cider. Olivia Gagan reports
Maximising sales on your core range is one way that you can boost your profit margin in the beer & cider category this year. But you can also succeed by making the most of the vast range of new products on the market, and by tapping into trends for low-alcohol and free-from drinks.
There is no doubt the beer & cider category has undergone huge changes in recent years. From the explosion of fruit ciders on the market several years ago to the emergence of craft beer, gone are the days when you could simply offer tried-and-tested bestsellers. The challenge now is establishing the right mix of trusty stalwarts and new, exciting products.
Toby Lancaster, category and shopper marketing director at Heineken, says that to do this, you should first pin down your core range of mainstream, well-established drinks.
“Mainstream cider and beer accounts for 75% of the category according to Nielsen data, so a core range of ciders and beers – such as Foster’s, Kronenbourg and Strongbow – is fundamental to ensuring retailers have a staple choice,” he says.
Despite newer trends, some products remain perennial favourites – Carling is gaining share in the mainstream lager sector, for example, despite decades of availability, and is not only the biggest-selling 4% lager overall, but the biggest beer brand on draught in the on-trade.
Lancaster says that once your core range is established, you should work on adding an edited selection of premium beers and ciders to your offering.
“To increase value, it is important for wholesalers to offer retailers premium options – such as Birra Moretti, Heineken and Amstel – that will appeal to shoppers looking to trade up.”
75%: Percentage of category sales accounted for by mainstream products
Clare Vintner, UK customer marketing and field sales management director at Molson Coors, says presentation is key to promoting core stock lines. “Simple tricks, such as organising your chiller, can make a huge difference. The wholesale fixture should follow an organised structure to help retailers navigate your product range, and purchase stock more easily and efficiently.”
2,000: There are now more than 2,000 beer and cider breweries in the UK
Craft beer & cider has undoubtedly been one of the biggest trends to emerge over the past decade. Now, consumers are more educated than ever when it comes to shopping for these lines. There are more than 2,000 breweries in the UK, dedicated beer festivals are growing in number, and specialist beer subscription services and online beer communities have become available, so beer drinkers are more aware of trends and new brands than ever before.
With the market flooded with products, Lucy Cottrell, brand manager for Crabbie’s at Halewood Wines & Spirits, says the trend for flavour innovation and drinks with authenticity and provenance has spilled over “into the spirits market, so there is now cross-category engagement from consumers looking for craft credentials in their alcohol choices”. As a result, the craft category is entering a new phase of progression.
“Producers are becoming ever more experimental in terms of introducing
new styles, flavours and blends to the market, as demand encourages the creation of something beyond the norm,” she says.
To capitalise on this sprawling segment, Amy Burns, marketing manager at Distell, which produces Savanna cider, believes that the line between different categories is becoming increasingly blurred, making it important to provide consumers with
a wide offering.
“One example of category-merging is the latest release from Savanna, Savanna Cross, which blends premium cider with the distinct aroma and bitterness of hops,” she notes.
Cottrell says you can also boost sales of craft lines by offering one-off gift-sets. “Retailers will be looking for a point of difference to maximise their sales, so wholesalers should stock gift-sets, particularly at key sales periods, and branded glassware to complement their beer selection, so they become the one-stop shop for their customers.”
Cottrell says growth in the craft category should continue to benefit from “key trends affecting the entire alcohol industry: from the interest in provenance and premiumisation, to the growing demand for no-, low- and gluten-free alcohol”.
With an 18% rise in sales value in the low- and gluten-free alcohol segment to date this year, according to Nielsen data, retailers will want to stock a range that resonates with health-conscious shoppers keen to moderate their alcohol intake without compromising on taste. Heineken’s Lancaster predicts that this trend will continue to grow throughout the spring and summer. He says his company has responded with the introduction of products such as Heineken 0.0 and alcohol-free Old Mout to provide taste-focused alternatives for health-conscious consumers, or those who do not want to or cannot drink alcohol.
Matthew Langley, insight and innovation manager at Westons Cider, also acknowledges this trend. “Low- and no-alcohol products are rising in credibility and acceptance, and are now seen by consumers as a positive choice based on taste, flavour and experience, rather than something that you have to have when ‘you are not drinking’,” he says. “The implications and opportunities for the cider category are huge.”
Lancaster says you should communicate this growing demand for healthier beers and ciders to your customers. “Educating retailers on the benefit of a core no- and low-alcohol range will help ensure that retailers are not missing out on one of the fastest-growing segments in the market: shoppers who are wanting to moderate their alcohol consumption,” he says.
According to Halewood’s Cottrell, wholesalers who pay attention to seasonal consumer demands and stock accordingly can increase sales. She suggests: “While beer is versatile, it also complements the seasons – dark, rich beers are perfect for colder spells, whereas light and refreshing beers enjoy an uplift during the spring and summer months – so wholesalers should review and rotate their ranges regularly.”
In addition, she says: “Look to capitalise on the growing demand for food and drink pairings, to inspire the off- and on-trades to encourage cross-selling opportunities.”
Heineken’s Lancaster adds that seasonal sporting events in particular offer an opportunity to sell through higher volumes of premium products.
He says: “There is ample opportunity surrounding the growing number of sports and seasonal occasions taking place. The World Cup, for example, presents a vital opportunity for unlocking value in the category. Shoppers will watch the matches with partners or friends, so will be looking to trade up and opt for sharing beers. Wholesalers should therefore encourage retailers to stock a range of premium large single bottles and ensure that they are visible throughout the store during the World Cup period.”
18%: The rise in sales value in the low- and gluten-free alcohol segment this year
David Sheppy, master of cider at Sheppy’s Cider, says smaller, canned servings of beer and cider are growing in popularity.
“Sheppy’s launched cider in a 330ml can as an addition to our range of traditional, premium cider last year,” he explains. “We recognised that smaller sizes are appealing, as people continue to focus on quality over quantity. Plus, they are easy to stack, easy to stock and have a lower carbon footprint – which is great for environmentally-conscious younger drinkers.”
Distell’s Burns concurs. “Wholesalers should acknowledge the growth of the 330ml pack format and take the popularity of canned craft drinks into account when deciding which stock to purchase and display,” she says.
Whether it is canned or bottled cider, or craft or mainstream beer and lager, Halewood’s Cottrell offers the following advice: “Know the category intimately,” she advises. “Know the trends, know your customers’ needs and make sure you provide added value over the competition – whether that is by emphasising regional selections, offering an extensive range of drink styles and flavours or delivering different brands in multiple formats. This will help you to maximise all sales and profit opportunities.”
Abada Akhtar, Premier Smeaton Stores, Fife
“Since Scotland welcomed Minimum Unit Pricing legislation in May of this year, we have already seen changes in the way that people buy beer and cider. The new rules mean the price of larger bottles has really gone up, so people are opting for smaller bottles of cider and purchasing lower-strength lager instead.”
Jonathan Fraser, Budgens, Reading, Berkshire
“We have had good sales results by sorting our drinks range by price: creating a section dedicated to premium drinks and then another for pricemarked value options. It suggests that consumers at the moment want a mix of drinks that stand out as either premium or crowd-pleasing budget choices.”
Olivia Bastin, The Three Crowns, Chagford, Devon
“For the summer months, San Miguel is a popular lager choice and has been for several years. For ciders, Norcotts Elderflower Cider has had a great response – in fact, any drink with elderflower or rhubarb flavours is selling well right now. Local beer Jail Ale by Dartmoor Brewery attracts both pub regulars and one-off visitors.”
Ian Renwick, The Jaded Palate bar chain
“Classic amber ales and pale ales are becoming popular again. Interest is growing in organic beer, too, and unusual variations on hops and yeasts. Provenance is important – if it is local, drinkers will like it.
“People are adventurous with their beers and ciders now, and I find most are now totally open to trying drinks from microbreweries and smaller producers.”