Are you brand fit?

With over four decades of experience within the drinks and beer sector, Strategic Director Myles Pinfold gives insights into the beer market.

 

 

In the lead up to the Covid19 outbreak, there were some clear market indicators for the UK brewing industry. Over the last decade there has been a seismic shift across the industry, with a fourfold increase in breweries to over 2,300 and a significant market split, from the traditional monolithic beer brands to smaller more, agile and innovative brewers who have driven the beer market to the high-end – premiumisation has been the order of the decade. Ironically this change has been driven by keg beer which had decades earlier enabled brewers to commoditise its product – in a relatively short space of time keg has evolved from the equivalent of processed white sliced bread to a hand-made wholemeal loaf.

Drinkers have evolved too, along with wider social changes the market has become less male-dominated and beer is fast regaining its place as a democratic drink for us all – even the tea-total…

Consumers have become more adventurous and promiscuous in their beer choice and the big brands have seen their market share eroded because the monolithic, session drinker is dying off and being replaced by a more discerning drinker who is willing to pay more…

However, the drive for change and innovation has resulted in the market becoming disrupted, fragmented and rotational, this is largely being driven by the brewers themselves. Another significant factor is that alongside the boom in the number of brewers entering the market, there has also been a significant up-scaling by the mid-sized brewers, with a resultant overcapacity, even before the lockdown.

Beer branding has become more gratuitous and ephemeral as a continuous flow of beer styles proliferate the market.

Now is the time to take stock and consider what really matters for your brand. If we look at the USA, which has been a bellwether for the UK market since the start of this century, there are some interesting statistics. The high-end craft market over there represents just under 14% of the total market by volume, whilst it commands an eye watering 25% by total market value. Craft has garnered all the attention, however it is still a minority player and in the UK the craft market share is less than the US. There has also been a move to locally sourced ingredients the larger brewers are flatlining whilst market growth is with the small regional brewers and local brewery taps are in 25% growth.

In addition, cask has been the loser in the craft boom and stampede for the convenience of dispense. Talk to any American brewer and you will often find that they love our quintessentially English cask beers – after all that these are what their Craft Beer Revolution was largely based on…

Who’s to know what the future will hold, there appears to be as many people predicting how the drinks sector will develop as there are (or were) beers on the market. However, even before the Corona virus hit our shores there was a direction of travel towards provenance and authenticity, with even traditional brewers being rediscovered – it was noticeable that Timothy Taylors was one of the stand-out brewers at BrewLDN amongst the sea of new contenders. Cask (as the poor, cheaper relation) is there for the making, as a differentiating proposition for the majority of beer drinkers who have little understanding of the difference between cask and keg.

Provenance and authenticity will probably be a key influencer in the consumer purchasing decision in the immediate future and the brewers who have it need to flaunt it. Whilst the macro brewers will capitalise on consumers’ move to the high-end market by developing Big Craft, something that the discount retailers are already big on…