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Beer - UK - December 2012

INTRODUCTION
Definition
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: UK value sales of beer, by segment, 2007-12
Forecast
Figure 2: Forecast of UK value sales of beer, 2007-17
Market factors
Duty rises add greater pressures on brewers
Figure 3: RPI indexed annual change for all items and beer (on- and off-trade), 2000-12
Economic pressures shifting consumers’ drinking habits
A boom in craft brewers despite troubles of the wider market
Figure 4: Index of pub and brewery numbers, 2000-12
Low consumer confidence continues to hamper the market
Population changes pose threats and opportunities
Companies, brands and innovation
Figure 5: Leading brands’ market shares in value sales of beer in the off-trade, 2011
Innovation focuses on bringing the new to drinkers
Beer brands continue to invest heavily in advertising
The consumer
Lager remains a popular drink
Figure 6: Usage of different types of beer within the past six months, October 2012
Brand name is highly important for users when buying beer
Lager achieves a unisex image
Figure 7: Users’ attitudes towards beer, October 2012
Opportunities for craft beers, provided they can deliver high quality
Figure 8: Attitudes towards craft beer, October 2012
Perceptions of heaviness weigh ales/stouts down
What we think
ISSUES IN THE MARKET
How can the on-trade beer market better convey value for money to curb its decline?
Can lager soften its unhealthy associations?
Can craft brewers balance exclusivity with wider appeal?
Can British brewers follow the lead of cider and leverage regionality?
TREND APPLICATION
Factory Fear
Guiding Choice
2015: Brand Intervention
INTERNAL MARKET ENVIRONMENT
Key points
Duty rises driving up retail prices
Figure 9: Value and volume sales of the total UK alcoholic drinks market, 2007-12
Figure 10: RPI indexed annual change for all items and beer (on- and off-trade), 2000-12
Figure 11: Most popular types of alcoholic drinks, in home and out of home, April 2012
Figure 12: Agreement with statements on locations for drinking, 2008-12
Beer prices are becoming an escalating issue
Figure 13: UK excise duty rates for beer, cider, wine and spirits, 2003-12
Barley prices add to upward pressure on beer price
Loyalty dips as consumers focus on price
Figure 14: Agreement with selected lifestyle statements, 2008-12
The ongoing growth of craft brewing
Figure 15: UK breweries, by number, 2000-12
Bridging the gender divide
Figure 16: Purchase of different types of beer, by gender, October 2012
Figure 17: Agreement with statements on binge drinking, 2008-12
Beer seen as fit for purpose for a variety of occasions
Figure 18: Occasions for drinking in and out of the home, May 2012
BROADER MARKET ENVIRONMENT
Key points
Consumer confidence remains low despite the recession ending
Figure 19: Consumer Confidence Index, monthly, January 2007-November 2012
Figure 20: Hours of sunshine in the UK, by month, 2008-12
Figure 21: Frequency of drinking in pubs/bars, May 2012
Do pubs still have a place in the community?
Figure 22: Index of pub and brewery numbers, 2000-12
Government focus on a healthier population
25-34-year-olds to emerge as the saviour of the beer market…
Figure 23: Projected trends in the age structure of the UK population, 2012-17
…while C2s also hold the key to growth
Figure 24: Changes in the adult socio-economic structure of the UK population, 2012-17
COMPETITIVE CONTEXT
Key points
Usage of many alcoholic drinks in decline
Figure 25: Usage of beer and competing drinks categories, in home and out of home, November 2012
Falling usage of beer both in and out of home
The UK is in fact a small player on the global market
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Premium and seasonal lager innovation
Large brewers invest in world beers
Craft breweries’ bold experiments generate new styles and flavours
Celebrities are getting hands on with beer
Other UK launches of note
Global context: interesting beer launches from overseas in 2012
The US leads the way…
…selected examples from other countries
MARKET SIZE AND FORECASTS
Key points
Rising value sales disguise a market going flat
Figure 26: UK value and volume sales of beer, at current and constant prices, 2007-17
Figure 27: Forecast of UK value sales of beer, 2007-17
Volume sales continue to slide, with little sign of change
Figure 28: Forecast of UK volume sales of beer, 2007-17
Forecast methodology
MARKET SEGMENTATION AND FORECASTS
Key points
Lager continues to dominate the beer market
Figure 29: Total value and volume sales of lager in the UK, at current and constant prices, 2007-17
Figure 30: Forecast of UK value sales of lager, 2007-17
The rebirth of ale
Figure 31: Total value and volume sales of ale in the UK, at current and constant prices, 2007-17
Figure 32: Forecast of UK value sales of ale, 2007-17
A dark future for stout
Figure 33: Total value and volume sales of stout in the UK, at current and constant prices, 2007-17
Figure 34: Forecast of UK value sales of stout, 2007-17
MARKET SHARE
Key points
A golden performance for Foster’s in 2011
Figure 35: Market share, by value of top-selling beer brands in the off-trade, 2009-11
Carling also flexes its premium muscles…
…while Budweiser goes from strength to strength
Kronenbourg turns the corner while Beck’s continues to flounder
Guinness epitomises the woes of stout
A third of beer sales are accounted for by the long tail of smaller brands
CHANNELS TO MARKET
Key points
The off-trade closes the gap further in 2011…
Figure 36: UK value and volume sales of beer in the off-trade, at current and constant prices, 2007-12
Figure 37: UK value and volume sales of beer in the on-trade, at current and constant prices, 2007-12
Figure 38: Volume sales of beer, by type, 2008-11
…as the multiple grocers tighten their grip
Pubs account for three quarters of on-trade sales
COMPANIES AND PRODUCTS
AB InBev
Camden Town Brewery (A craft brewer)
Carlsberg
Diageo
Heineken
Molson Coors
SABMiller (Miller Brands)
BRAND RESEARCH
Brand map
Figure 39: Attitudes towards and usage of brands in the beer sector, September 2012
Correspondence analysis
Brand attitudes
Figure 40: Attitudes, by beer brand, September 2012
Brand personality
Figure 41: Beer brand personality – macro image, September 2012
Figure 42: Beer brand personality – micro image, September 2012
Brand experience
Figure 43: Beer brand usage, September 2012
Figure 44: Satisfaction with various beer brands, September 2012
Figure 45: Satisfaction with various beer brands, September 2012 (continued)
Figure 46: Consideration of beer brands, September 2012
Figure 47: Consumer perceptions of current beer brand performance, September 2012
Figure 48: Beer brand recommendation – Net Promoter Score, September 2012
Brand index
Figure 49: Beer brand index, September 2012
Figure 50: Beer brand index vs. recommendation, September 2012
Target group analysis
Figure 51: Target groups, September 2012
Figure 52: Beer brand usage, by target groups, September 2012
Figure 53: Beer brand usage, by target groups, September 2012 (continued)
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists
BRAND COMMUNICATION AND PROMOTION
Key points
Adspend on beer remains high
Figure 54: Above-the-line adspend in the UK beer market, 2008-12
Lager dominates beer advertising
Figure 55: Advertising spending in the UK beer sector, by category, 2008-12
AB InBev continues to lead the way
Figure 56: Leading advertisers in the UK beer category, by company, 2011
Figure 57: Leading advertisers in the UK beer category, by company, 2009-12
Four brands making notable investments in advertising
Figure 58: Leading brands advertised in the UK beer category, 2011
Figure 59: Leading brands advertised in the UK beer category, 2009-12
TV is the preferred medium for beer advertisers
Figure 60: Advertising in the UK beer category, by media, 2008-12
Leveraging sports and heritage to market beer
CONSUMER – TRENDS IN USAGE
Key points
Beer consumption in decline
Figure 61: Types of beer consumed in the last 12 months, 2008-12
Figure 62: Types of beer consumed in the last 12 months, by gender and age, 2012
Beer retains strong associations with social occasions
Figure 63: In-home drinking occasions for beer/lager/ale/cider, 2012
Figure 64: Out-of-home drinking occasions for beer/lager/ale/cider, 2012
CONSUMER – USAGE OF TYPES OF BEER
Key points
Lager retains its popularity, particularly for in-home drinking
Figure 65: Usage of different types of beer within the past six months, October 2012
Figure 66: Usage of different types of beer in the last six months, in and out of home, October 2012
Usage of ales/stouts continues to be heavily driven by men
Craft beer on the rise
Ginger beer also showing rapid growth
Niche interest in other types of beers
Figure 67: Selected attitudes towards drinking low-alcohol drinks in the on-trade, August 2012
Over a quarter of adults drink four or more types of beer
Figure 68: Repertoire of different types of beer drunk, October 2012
CONSUMER – CHOICE FACTORS
Key points
Branding is an essential feature in the beer market
Figure 69: Choice factors when buying beer, October 2012
Low price an important choice factor for half of beer drinkers
Opportunities exist to tap into demand for adventurous and unique beers
CONSUMER – ATTITUDES TOWARDS LAGER
Key points
Lager enjoys unisex appeal
Figure 70: Users’ attitudes towards beer, October 2012
Three quarters of beer drinkers think it is suitable for men and women
Figure 71: Users’ attitudes towards the positioning of beer, October 2012
Price is a worry for the majority of beer drinkers
Figure 72: Users’ attitudes towards the consumption of beer, October 2012
Draught beer remains the leading format for quality
Figure 73: Users’ attitudes towards the taste of different types of beer, October 2012
Branded/Tailored glassware can add value to beer
Opportunities for gluten-free beer operators
Scope for growth for lower-alcohol beers
Figure 74: Users’ attitudes towards the alcoholic content of beer, October 2012
A third of beer drinkers exhibit connoisseurial attitudes
Figure 75: Users’ attitudes towards understanding more about beer, October 2012
CONSUMER – ATTITUDES TOWARDS CRAFT BEER
Key points
Opportunities for craft beers, provided they can deliver high quality
Figure 76: Attitudes towards craft beer, October 2012
Figure 77: Attitudes towards craft beer: users vs non-users, by agreement with statements, October 2012
Over half of beer drinkers expect craft beer to deliver higher quality…
Figure 78: Attitudes towards the quality of craft beer, October 2012
…while over half of users also want to see more craft beers available
Figure 79: Users’ attitudes towards the range and image of craft beer, October 2012
Independence is an important feature of the craft landscape
Figure 80: Users’ attitudes towards the management of craft beer brands, October 2012
Balancing exclusivity and accessibility is a challenge for craft brands
Figure 81: Users’ attitudes towards the price of craft beer, October 2012
Craft beer in the US market
Figure 82: Agreement with selected statements on craft beer in the US, August 2012
CONSUMER – ATTITUDES TOWARDS ALES/STOUTS
Key points
Perceptions of heaviness weigh ales/stouts down
Figure 83: Attitudes towards ales/stouts, October 2012
Figure 84: Users’ attitudes towards ales/stouts, October 2012
Two in five beer drinkers think that ales/stouts are heavier than lager
Figure 85: Attitudes towards ales/stouts compared to lager, October 2012
Ales/Stouts make progress in appealing to women
Figure 86: Attitudes towards the image of ales/stouts, October 2012
A third of beer drinkers prefer draught ales/stouts to bottles/cans
Figure 87: Attitudes towards the taste of ales/stouts, October 2012
Guest ales/stouts can drive interest
Figure 88: Attitudes towards the range/availability of ales/stouts, October 2012
CONSUMER – TARGET GROUPS
Key points
Four target groups
Figure 89: Target groups for beer, October 2012
Explorers (33%)
Disengaged (25%)
Unadventurous (23%)
Craft Lovers (19%)
APPENDIX – INTERNAL MARKET ENVIRONMENT
Figure 90: Names and locations of craft breweries in London, 2012
Figure 91: Agreement with selected statements, by demographics, 2012
Figure 92: Agreement with selected statements, by demographics, 2012 (continued)
APPENDIX – BROADER MARKET ENVIRONMENT
Figure 93: Usage of alcoholic drinks in the last 12 months, by demographics, 2012
APPENDIX – COMPETITIVE CONTEXT
Figure 94: Type of alcoholic drinks consumed in the last 12 months, by demographics, 2012
Figure 95: Type of alcoholic drinks consumed in the last 12 months, by demographics, 2012 (continued)
Figure 96: Type of alcoholic drinks consumed in the last 12 months, by demographics, 2012 (continued)
APPENDIX – MARKET SIZE AND FORECASTS
Figure 97: Best- and worst-case forecasts for the total beer market, by value, 2012-17
Figure 98: Best- and worst-case forecasts for the total beer market, by volume, 2012-17
APPENDIX – MARKET SEGMENTATION AND FORECASTS
Figure 99: Best- and worst-case forecasts for the lager market, by value, 2012-17
Figure 100: Best- and worst-case forecasts for the lager market, by volume, 2012-17
Figure 101: UK volume sales of lager, 2007-17
Figure 102: Best- and worst-case forecasts for the ale market, by value, 2012-17
Figure 103: Best- and worst-case forecasts for the ale market, by volume, 2012-17
Figure 104: UK volume sales of ale, 2007-17
Figure 105: Best- and worst-case forecasts for the stout market, by value, 2012-17
Figure 106: Best- and worst-case forecasts for the stout market, by volume, 2012-17
Figure 107: UK volume sales of stout, 2007-17
APPENDIX – BRAND RESEARCH
Figure 108: Brand usage, September 2012
Figure 109: Brand commitment, September 2012
Figure 110: Brand momentum, September 2012
Figure 111: Brand diversity, September 2012
Figure 112: Brand satisfaction, September 2012
Figure 113: Brand recommendation, September 2012
Figure 114: Brand attitude, September 2012
Figure 115: Brand image – macro image, September 2012
Figure 116: Brand image – micro image, September 2012
Figure 117: Profile of target groups, by demographics, September 2012
Figure 118: Psychographic segmentation, by target groups, September 2012
Figure 119: Brand usage, by target groups, September 2012
Brand index
Figure 120: Brand index, September 2012
APPENDIX – CONSUMER – TRENDS IN USAGE
Figure 121: Types of beer consumed in the last 12 months, by demographics, 2012
Figure 122: Drinking occasions for beer/lager/ale/cider in home, by demographics, 2012
Figure 123: Drinking occasions for beer/lager/ale/cider in home, by demographics, 2012 (continued)
Figure 124: Drinking occasions for beer/lager/ale/cider out of home, by demographics, 2012
Figure 125: Drinking occasions for beer/lager/ale/cider out of home, by demographics, 2012 (continued)
APPENDIX – CONSUMER – USAGE OF TYPES OF BEER
Figure 126: Types of beer drunk in home, October 2012
Figure 127: Most popular types of beer drunk in home, by demographics, October 2012
Figure 128: Next most popular purchase of beer drunk in home, by demographics, October 2012
Figure 129: Types of beer drunk out of home, October 2012
Figure 130: Most popular types of beer drunk out of home, by demographics, October 2012
Figure 131: Next most popular types of beer drunk out of home, by demographics, October 2012
Figure 132: Non-usage of different types of beer within the past six months, October 2012
Figure 133: Non-usage of different types of beer within the past six months, by demographics, October 2012
Figure 134: Non-usage of different types of beer within the past six months, by demographics, October 2012 (continued)
Figure 135: Types of beer drunk, by repertoire of types of beer drunk, October 2012
Figure 136: Repertoire of types of beer drunk, by demographics, October 2012
APPENDIX – CONSUMER – CHOICE FACTORS
Figure 137: Most popular choice factors when buying beer, by demographics, October 2012
Figure 138: Next most popular choice factors when buying beer, by demographics, October 2012
Figure 139: Other choice factors when buying beer, by demographics, October 2012
Figure 140: Choice factors when buying beer, by most popular types of beer drunk in home, October 2012
Figure 141: Choice factors when buying beer, by next most popular purchase of different types of beer drunk in home, October 2012
Figure 142: Choice factors when buying beer, by most popular types of beer drunk out of home, October 2012
Figure 143: Choice factors when buying beer, by next most popular purchase of different types of beer drunk out of home, October 2012
APPENDIX – CONSUMER – ATTITUDES TOWARDS LAGER
Figure 144: Users' attitudes towards beer, October 2012
Figure 145: Agreement with the statements ‘I would cut back on the amount of beer/lager I drink if the price continues to rise’ and ‘I would drink gluten-free beers if they tasted as good as standard varieties’, by demographics, October 2012
Figure 146: Agreement with the statements ‘I would be more likely to drink lager in pubs/restaurants than at home’ and ‘I would drink lower-alcohol beers if they tasted as good as standard varieties’, by demographics, October 2012
Figure 147: Agreement with the statements ‘I prefer the taste of flavoured or ‘golden’ beers to standard beers’ and ‘I would like information on how to match beers/lagers with different types of food’, by demographics, October 2012
Figure 148: Agreement with the statements ‘I would like to understand more about beer/lager’ and ‘I prefer beers/lagers to be served in glasses which are branded/specific to them’, by demographics, October 2012
Figure 149: Agreement with the statements ‘Lager is a drink which is suitable for both men and women’ and ‘Lager is more refreshing than other alcoholic drinks’, by demographics, October 2012
Figure 150: Agreement with the statements ‘Draught beer tastes better than beer in bottles/cans’ and ‘I prefer lagers with an ABV (alcohol content) of 5% or more to those with a lower ABV’, by demographics, October 2012
Figure 151: Users' attitudes towards beer, by most popular types of beer drunk in home, October 2012
Figure 152: Users' attitudes towards beer, by next most popular types of beer drunk in home, October 2012
Figure 153: Users' attitudes towards beer, by most popular types of beer drunk out of home, October 2012
Figure 154: Users' attitudes towards beer, by next most popular types of beer drunk out of home, October 2012
Figure 155: Users' attitudes towards beer, by attitudes towards craft beer, October 2012
Figure 156: Users' attitudes towards beer, by attitudes towards craft beer, October 2012 (continued)
Figure 157: Users' attitudes towards beer, by attitudes towards craft beer, October 2012 (continued)
APPENDIX – CONSUMER – ATTITUDES TOWARDS CRAFT BEER
Figure 158: Attitudes towards craft beer, October 2012
Figure 159: Users' attitudes towards craft beer, October 2012
Figure 160: Agreement with the statements ‘I would try more craft/micro-brew beer if I knew more about them’ and ‘Craft beer is too expensive’, by demographics, October 2012
Figure 161: Agreement with the statements ‘I expect/would expect craft beers to taste better than non-craft beers’ and ‘I am prepared to pay more for craft beers’, by demographics, October 2012
Figure 162: Agreement with the statements ‘It is important for craft beer producers to be independently owned’ and ‘I would expect craft beers to be better for drinking with food than non-craft beers’, by demographics, October 2012
Figure 163: Agreement with the statements ‘I would like to see a better range of craft beers in supermarkets and pubs/restaurants’ and ‘The wide variety of flavours of craft beers is appealing’, by demographics, October 2012
Figure 164: Agreement with the statements ‘I am less likely to try a craft-style beer from a larger beer manufacturer’ and ‘I am more likely to identify with craft beer than popular brands’, by demographics, October 2012
Figure 165: Agreement with the statements ‘I like to drink beers which are less widely drunk’ and ‘I prefer to drink regional beers to support local producers’, by demographics, October 2012
Figure 166: Attitudes towards craft beer, by choice factors when buying beer, October 2012
Figure 167: Attitudes towards craft beer, by choice factors when buying beer, October 2012 (continued)
APPENDIX – CONSUMER – ATTITUDES TOWARDS ALES/ STOUTS
Figure 168: Attitudes towards ales/stouts, October 2012
Figure 169: Attitudes towards ales/stouts, by demographics, October 2012
Figure 170: Attitudes towards ales/stouts, by demographics, October 2012 (continued)
Figure 171: Users' attitudes towards ales/stouts, October 2012
Figure 172: Users' attitudes towards ales/stouts, by demographics, October 2012
Figure 173: Users' attitudes towards ales/stouts, by demographics, October 2012 (continued)
Figure 174: Attitudes towards ales/stouts, by choice factors when buying beer, October 2012
Figure 175: Attitudes towards ales/stouts, by choice factors when buying beer, October 2012 (continued)
APPENDIX – CONSUMER – TARGET GROUPS
Figure 176: Target groups, by demographics, October 2012
Figure 177: Types of beer drunk, by target groups, October 2012
Figure 178: Choice factors when buying beer, by target groups, October 2012
Figure 179: Attitudes towards beer (any agreement with statements), by target groups, October 2012
Figure 180: Attitudes towards craft beer (any agreement with statements), by target groups, October 2012
Figure 181: Attitudes towards ales/stouts, by target groups, October 2012

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