Cheers to beers

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The beer and cider category in the off-trade has a value of £4.6bn

Premium beers and ciders are growing fast, but own-label is also breaking into the bestsellers, writes Louise Banham.

The top 10 alcohol brands account for more than half of all category value sales in retail, so it’s critical that core brands remain at the heart of every wholesaler’s offering. But a big trend everyone should take note of is the growth of premium beers and ciders. 

Despite still feeling the aftermath of the recession, suppliers say consumer confidence has risen to a three-year high. “The fact that consumers have become more demanding has also meant that the average price per litre has gone up, contributing to overall value growth,” says Craig Clarkson, category & trade marketing director for off-trade at Heineken. “Although in the past cider and beer growth has been driven by volume sold on deal, we have begun to see retailers move away from deep discounting, contributing to this growth and driving value sales.”

Top tips: Four great ways to grow sales
  • Ensure customers know what the core brands are: Advise them on giving them the right space in-store and the importance of capitalising brand promotions.
  • Stay up to date with trends:Premium beers and ciders are one of the fastest growing sub-categories. 
  • Keep an eye on own-label:Own-brand lines have broken into the top 25 beer lines in independent retail (visit betterRetailing’s What to Stock)
  • Encourage trade-up: Highlight premium brands in-depot to harness the power of summer or sporting events, which are prime occasions for trading up.

Suppliers say more people are entering the cider category and, in turn, are working their way from value, mainstream ciders through to premium ciders. “Premium is the segment of the market with the most drinkers and continues to present huge opportunities,” says Martin Thatcher, managing director of Thatchers Cider. “Consumers are looking for authenticity and quality – in other words, ciders that offer genuine craft, heritage and tradition. By stocking ciders from a craft cider maker, wholesalers can be confident that they are offering their customers the type of ciders in demand.” 

The trend for more premium brands has also helped give way to a number of emerging segments, including world beers and ciders and spirit-flavoured beers. 

“We’ve noticed that in particular, young adult drinkers, who are prone to travel, are very familiar with different ciders from around the world,” says Anthony Mills, head of European marketing at Savanna Cider. “So it might be an idea for wholesalers to introduce these brands.”

World Beers has recently launched two beers from Brazil’s craft brewery Cervejaria Amazônia to take advantage of the Latin-themed, sport-filled summer and consumer trend for craft beer. 

“With this summer’s international sporting events, such as the World Cup, Commonwealth Games, Ryder Cup and Tour de France, coinciding nicely with the rise in interest in the craft beer scene, operators shouldn’t be scared to stock an array of different craft and speciality beers from home and abroad,” says Peter Karsten, World Beers’ managing director. 

[pull_quote_right]Although in the past cider and beer growth has been driven by volume sold on deal, we have begun to see retailers move away from deep discounting[/pull_quote_right]

Spirit beers – and now spirit ciders – are also a developing area of the market, thanks to the consumer demand for new drinking experiences. Manufacturers are churning out spirit beers at a rapid pace and big names, such as Heineken, are helping to drive trial among 18- to 34-year olds. The company has just added Desperados Verde to its portfolio, building on the success of tequila-flavoured, premium bottled lager Desperados, 

which has grown sales from £5m to more than £22.3m in less than a year. It now accounts for 67% of the spirit beers segment value.

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Louise Banham
Louise is the editor in chief at Newtrade, overseeing Better Wholesaling and its sister titles for the independent convenience channel RN and Retail Express. She can be found on Twitter @LouiseBanham.

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