Competitions are the way forward for small brewers, says Glynn Davis
The beer aisles are finally getting a good shake-up with the introduction of a number of international and premium beers. They’re doing a pretty good job plugging the gap left by the demise of the RTD - but could their appeal prove just as fleeting? Or is the new wave of designer beers here to stay?
There is a buzz around speciality beer at the moment.
Earlier this month, The Grocer revealed that Leffe Blond could enter the top 10 beer brands within the next decade, becoming the first speciality beer to do so according to InBev’s off-trade sales managing director Stuart MacFarlane.
InBev recently started supporting Leffe above the line for the first time and has been investing in its other speciality and international brands such as Hoegaarden.
It also launched Artois Bock and the Brazilian Brahma earlier this year, both of which are about to be given significant advertising support.
“This year is a key time for speciality beers as sales momentum builds, spearheaded by the development of the power brands of the category, Hoegaarden and Leffe,” says MacFarlane, who has hinted at further exotic launches from InBev.
So why the sudden explosion of interest? Beer writer and expert Pete Brown explains: “There has been no innovation in the beer market for ages and lager is getting boring for both buyers and consumers. People are trading up in every food and drink category but beer has really been lagging behind.”
This has encouraged consumer fatigue with leading brands - a phenomenon exacerbated by the transition of once edgy, iconoclastic brands to mainstream promotion driven ones, he says.
Take Stella Artois. When it was launched into the UK it had some exclusivity and its adverts were revolutionary. Now, says Brown: “It has become a mainstream brand, which is probably what will happen to speciality beers eventually.”
Brown admits that he did not expect InBev to be spearheading the push, but it is not the only company to have launched new international brands into the UK this year.
Brazilian Lokal, the Indian AdiAdi, Poland’s Tyskie, the Australian Little Creatures, Césu from Latvia and the official off-trade launch for China’s Tsingtao are just some of the new brands to have hit supermarket shelves this year. Just last week it was announced that Czech beers, Holba and Zubr, were also on their way over.
While InBev might seem to be the only big player shouting about its commitment, there are signs that other global brewers are taking interest. Carlsberg, which already has speciality beer German Duckstein, announced it was launching a new speciality range called Jacobsen (named after Carlsberg’s founder) in Denmark and although it has no plans yet to bring it over to the UK it’s one to keep an eye on.
But are these beers here to stay or will they vanish like many in the RTD category? Some of those who found success with RTDs are now looking at bottled beers, after all.
Steve Perez, who launched the Vodka Kick and Korky’s RTD brands, wants to add a premium packaged beer to Global Brands’ portfolio.
He says: “I think speciality beers have always been a big thing and that people’s repertoire of drinks will continue to increase. RTDs are not going to go away and be replaced by speciality/international beers, though. People are bored of drinking the big name brands and want to try different things so lots of small players will enter the market as a result.”
Perez says Global Brands is looking for a stylish beer to fit into its customer portfolio.
“We only want to have one or two beers to focus on. The same people that drink RTDs will also drink premium packaged beers.”
However, while there are similarities, the burgeoning speciality beer category is already attracting more respect than RTDs did.
It certainly hasn’t been subjected to the negative media attention that was associated with the high-sugar content of RTDs and their appeal to younger drinkers.
CJ Antal-Smith, head of beer buying at Asda, says: “We are definitely putting faith in speciality beers being a growth category, although we think it will be important to rotate the range to keep it fresh and also because we think many of these are unlikely to be beers people are loyal to.”
The idea of an authentic and brewed at source product, that often has details of its brewing heritage on its labelling, seems to really be differentiating the category from RTDs, she says.
Crucially, the multiples are behind the shift towards international and premium beers. Michael Cook, director of imported beers at Pierhead Purchasing, a UK distributor of premium bottled beers, notes: “Supermarkets are gradually recognising that consumers are not swayed by price points alone and they want something authentic.
“I also think supermarkets are increasingly following the lead of style bars, and we have noticed an increase of these bars looking for different beers that aren’t on the supermarket shelves.”
At the moment, only a limited amount of shelf space is allocated to these beers so there is likely to be some shuffling of existing brands to free up space for the newcomers. Indeed Antal-Smith says Asda has set up dedicated bays in a number of its stores and Morrisons is soon to reveal its much-talked-about new-look bottled beer section.
Although the average supermarket now stocks between 20 and 30 premium bottled beers, it is still difficult for brewers, many of which are small operators, to gain a listing in the supermarkets.
But the success of supermarket-organised beer competitions, where winners are given valuable space in the retailers’ stores, is helping to improve their prospects.
Glenn Payne, sales director of the Meantime Brewing Company in London’s Greenwich and formerly the beer buyer at Safeway, recognises the benefits of competitions from both sides of the fence since he was instrumental in the Safeway sponsorship of the Society of Independent Brewers (SIBA) Beer Challenge and in his new role at Meantime he has benefited from the bottled beer awards run by Asda.
After a blind tasting, Meantime Brewery’s India Pale Ale was one of four shortlisted beers that, from early October, will enjoy a listing in Asda stores. The sales of these four brews over a six-week period will then decide the winner of Asda’s Beer Challenge.
Tesco has long recognised the benefit of its annual brewing awards. Ian Targett, ale and cider buyer at Tesco, says: “There are thousands of micro-breweries out there so the competition gives us the chance to try the brews of these people.”
In May 2005 Tesco also started working in partnership with drinks company Branded Drinks to co-ordinate the supply of beers from small local brewers to nearby stores. Sales have already hit £1 million per year.
Working to its ‘local is good’ brief, Waitrose also sources beers from breweries that are located close to specific stores.
The support of the supermarkets is key: they account for 70% of the market (in terms of both volume and value), according to Rick Payne, marketing manager at regional brewer Hall & Woodhouse. Hall & Woodhouse has certainly been a major beneficiary having won awards in 1998 for its Golden Champion Ale and in 2001 for Badger Golden Glory.
But it’s not all plain sailing.
Tiny Sunderland-based Darwin Brewery gained listings in 270 Tesco stores for its Hop Drop and throughout the Asda estate for its Rolling Hitch after winning both their beer competitions but increased demand meant severe initial problems with logistics and cashflow.
High scores that open the doors