It’s official. The craft beer explosion, which has been brewing for several years now, has hit UK retail with full force. Tesco made the headlines last month after it culled Heineken brands to clear space for a raft of new craft players, while Waitrose this week unveiled 25 new craft and speciality beers as the retailer reported a 33% surge in sales of speciality brews over the past year.
So how big a deal is this off-trade surge in craft ales and lager? And what further changes can we expect?
UK off-trade craft beer sales have increased by an incredible 87% year on year over the past 12 months, with category value rising from £53.9m to £100.5m. Its share of total beer sales almost doubled from 1.4% the previous period to 2.6% [Nielsen 52 w/e 25 March 2017].
This dizzying growth has come at the expense of mainstream brands, which have also faced competition from world beers, and suffered a 0.4% sales dip as their share of the total beer market dropped from 79.8% to 77.8% over the last year [Nielsen].
“We’ve possibly been a little cautious in the past about how much growth there’s been in craft beer, as the latest figures have outperformed our expectations,” says Helen Stares, client business partner at Nielsen. “Growth in the category is accelerating, so it’s more than likely that sales will double again in the next two years.”
Not only does craft beer appeal to younger drinkers, and tap the wider trend toward premium booze, but it gives retailers the opportunity to differentiate their alcohol aisles from the rest and compete on something other than price, says Fraser McKevitt, head of retail & consumer insight at Kantar Worldpanel UK.
“The opportunity is there because these beers are managing to sustain price premiums that the lagers cannot get close to, particularly with the history of price promotions in lager and alcohol in general,” he adds.
The Co-op was the first major mult to announce a major push into the burgeoning category, rolling out an 18-strong craft portfolio nationally across its stores last September, including brews from Brooklyn, Goose Island, Pistonhead, Adnams, Leffe, BrewDog, Blue Moon and Samuel Adams.
The launch, which means 90% of Co-op stores stock at least four craft SKUs, marked the retailer’s biggest craft push in the beer aisles to date, said BWS category manager Simon Cairns at the time, adding the ambition was to add value to the retailer’s beer category through the premium market.
Just a month later, Tesco announced its own major craft push across 402 Express stores, expanding its portfolio from two to around 30 different speciality brews from the likes of BrewDog, Brooklyn and Innis & Gunn. The move, which came after Tesco saw sales of craft beer rocket by 130%, meant almost a quarter of its Express beer offer was allocated to craft.
This strategy was evidently successful, because Tesco rolled the concept out across its big stores in March as part of a wider overhaul of its BWS.
Having cleared room on shelves by axing half of Heineken’s portfolio in February, the supermarket introduced around 60 new craft lagers and ales from brewers including BrewDog, Meantime, Elk Warning, Crafted Warning, Drygate, Meantime, Pistonhead and Flying Dog to its national stores [Brand View].
Waitrose on board
Waitrose followed suit this week, announcing it will roll out another 25 craft and speciality brews across its national stores, having enjoyed a 33% uplift in speciality beer sales.
The new additions will include 12 new canned beers and several products exclusive to Waitrose as a multiple retailer, such as Bavarian brewery And Union’s Unfiltered Lager (left) (rsp: £2.19/330ml), set to hit shelves on 1 May.
This was a “solid move” from Waitrose says McKevitt, with craft and speciality brews a “particularly good fit” for the retailer’s upmarket shopper base. “Expanding the beer range and choice is a good thing as long as it is real choice with real variety. I think we will see a continuation of this trend in other supermarkets, too.”
Most have already made a good start. Morrisons has been less vocal about craft beer, but it made a significant push into the category last summer - introducing around 30 new ales and lagers from brands including BrewDog, Meantime, Freedom and Portobello Brewing Co [Brand View].
It has continued to expand its offer this year, introducing new ales and lagers including Frederic Robinson Beardo IPA 330ml, Hop Back Brewery Crop Circle 500ml, and Goose Island Honkers Ale 355ml.
Asda and Sainsbury’s, meanwhile, have made some interesting moves north of the border. Asda launched 25 craft brews from Scottish microbreweries in 61 stores across Scotland last April, after striking a deal with wholesaler JW Filshill’s Craft Beer Clan, while Sainsbury’s introduced around 20 SKUs from local breweries including Black Isle, Deeside, Harviestoun and Isle of Skye in Scots stores last summer [Brand View].
More skus than mainstream
Asda also boasts a 49-strong national lineup of craft lagers and ales from brewers including Harbour, Lawless, Purity Brewing Co, Pistonhead, Innis & Gunn and BrewDog. In fact, BrewDog now boasts more SKUs in Asda than mainstream rivals including Beck’s, Budweiser, Carlsberg, Foster’s, Greene King and John Smith’s [Brand View].
Sainsbury’s has a more limited national range, with around 30 craft and speciality beers and ales from some of the more established craft players such as BrewDog, Innis & Gunn, Meantime and Goose Island.
But with the UK craft beer movement showing no signs of slowing down, this is only likely to be the beginning of the great supermarket beer aisle revamp, says Stares.
“We expect to see craft continuing to grow: the taste and type of beer is important to craft beer drinkers, with price and actual brand less important,” she adds. “It’s likely that as the craft beer market continues to grow, retailers will make space for this expanding category by cutting back on the listings of traditional bottled ales.”
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