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Ales and Stouts - UK - May 2010

This report covers the UK market for ales and stouts, in both the on- and off-trade.

  • The steady decline of the ales/stout market has worsened over the past decade. In 1998, these darker beers accounted for 40% of all beer volume sales in the UK, but just ten years later this had slipped to 25%.
  • Key to the demise of ales & stouts has been the rise in popularity of lager. Younger men have been attracted to being served a cold and refreshing drink, rather than the more complex taste of ales/stout.
  • Brewers have failed to change a common misconception that ale is at its best when served cool rather than at room temperature, albeit not cold which would mean it losing much of its distinctive flavour.
  • A new generation of younger beer drinkers are starting to appreciate colder ale, which is helping propel sales of cask ale. This type of ale has more of a unique flavour than standardised brands.
  • Both the ale and stout markets have suffered from an over-reliance on pub revenues which are also experiencing decline: a record number of pubs went out of business in 2009.
  • The success of cask ale has been instrumental in slowing the decline of ale. Between 2005 and 2008, on-trade volume sales of ale fell by 23%. But in 2009 ale out-performed lager, slowing its decline to a more respectable 4.8%.

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Table of contents

  1. Issues in the Market

      • Definition
        • Abbreviations
        • Future Opportunities

          • Creating a secret society
            • Owning slow drinking
            • Market in Brief

              • Against the odds, the ale market stems its long-term decline...
                • ...led by the renaissance of cask ale
                  • Guinness is at a crossroads
                    • Off-trade has been under-utilised by the stout/ale market
                      • While not bright, the future is certainly a lot brighter
                      • Internal Market Environment

                        • Key points
                          • Drinking in decline
                            • Figure 1: Trends in consumption of alcohol, in home versus out of home (past 12 months), 2005-09
                          • The long-term demise of pubs…
                            • ...means that in-home drinking has become a key revenue stream…
                                • Figure 2: Trends for proportion of total UK beer volume sales of packaged beer types, 1981-2008
                              • …a situation exacerbated by the economic downturn
                                • Figure 3: Trends and forecast for pub revenue versus consumer expenditure, in real prices (based on 2009), 2004-14
                              • Pubs become more food-led
                                • An explosion of microbreweries
                                  • Figure 4: Total breweries in the UK, 2000-08
                                • The growing importance of local provenance
                                  • Figure 5: Trends in lifestyle statements, 2005-09
                                • The struggle to attract female beer drinkers
                                    • Figure 6: Calories contained in typical serves of different alcohol types, 2009
                                  • Capitalising on the World Cup 2010
                                    • Figure 7: What people will be spending on during the World Cup 2010
                                • Broader Market Environment

                                  • Key points
                                    • 2008 marks a sea-change in the government’s alcohol taxation policy
                                      • Figure 8: Trends for duty increases, by alcohol type, 2004-07 compared to 2008-10
                                    • Only a matter of time before legislation tackles supermarket pricing
                                      • Trading will remain tough in 2010
                                        • Closing the age divide
                                          • Rise in ABC1s will drive premiumisation of alcohol
                                            • Figure 9: Trends and forecast for proportion of ABC1s and C2DEs in the UK population, 2004-14
                                        • Competitive Context

                                          • Key points
                                            • Popularity of beer in long-term decline
                                              • Figure 10: Trends for spend on beer as a proportion of overall alcohol spend in the UK, 1972-2008
                                            • Within beer, lager has become the undisputed king
                                              • Figure 11: Trends for segmentation of ale and stout within the total UK beer market, 1998-2008
                                            • Economic downturn sees a change in fortunes for ales and stout
                                              • Figure 12: Changes in penetration of main alcohol drink types, pre-economic downturn versus post, 2005-07 and 2007-09
                                          • Strengths and Weaknesses in the Market

                                            • Strengths
                                              • Weaknesses
                                              • Who’s Innovating?

                                                • Key points
                                                  • Guinness trials Black Lager…
                                                    • …as well as a lower-ABV Guinness
                                                      • Brains enters stout market
                                                        • Chilli and chocolate ale
                                                          • Adnams targets a more mainstream audience
                                                            • Return of the Huntsman
                                                            • Market Size and Forecast

                                                              • Key points
                                                                • Overall category stems the flow
                                                                    • Figure 13: Forecast for volume and value sales of total ale and stout market, 2005-15
                                                                  • Ale sees a revival – relatively speaking
                                                                    • Figure 14: Forecast for volume and value sales of the ale market, 2005-15
                                                                  • Guinness will sustain the stout category
                                                                    • Figure 15: Forecast for volume and value sales of the stout market, 2005-15
                                                                  • Factors used in the forecast
                                                                  • Segment Performance

                                                                    • Key points
                                                                      • Ale steadies its seemingly interminable on-trade decline
                                                                        • Figure 16: Trends for volume sales of ale – on- and off-trade, 2005-10
                                                                      • Ale has failed to capitalise fully on its off-trade potential
                                                                          • Figure 17: Trends for value sales of ale – on- and off-trade, 2005-10
                                                                        • 2009 sees a renaissance for cask ale
                                                                          • Figure 18: Trends for volume sales of different categories of draught ale*, 2004-09
                                                                          • Figure 19: Trends for share of draught ale sales, by cask and other ales, 2004-09
                                                                        • Stout is seeing a steady year-on-year decline
                                                                          • Figure 20: Trends for volume sales of stout – on- and off-trade, 2005-10
                                                                          • Figure 21: Trends for value sales of stout – on- and off-trade, 2005-10
                                                                      • Companies and Products

                                                                        • Key points
                                                                          • AB InBev
                                                                              • Figure 22: InBev UK product range, ales and stouts, March 2010
                                                                            • Carlsberg
                                                                              • Diageo
                                                                                  • Figure 23: Diageo UK product range, ales and stouts, March 2010
                                                                                • Greene King
                                                                                  • Figure 24: Greene King, ales product range, 2010
                                                                                • Heineken UK
                                                                                  • Figure 25: Heineken UK, ales and stouts product range, March 2010
                                                                                • Molson Coors
                                                                                  • Figure 26: Molson Coors, UK product range, ales and stouts, March 2010
                                                                                • Other major brewers
                                                                                • Brand Elements

                                                                                    • Key points
                                                                                      • Brand map
                                                                                          • Figure 27: Attitudes towards and usage of ale and stout brands, January 2010
                                                                                        • Brand qualities of ale and stout brands
                                                                                          • Guinness dominates, John Smith’s and Tetley’s losing ground
                                                                                            • Figure 28: Personalities of various ale and stout brands, January 2010
                                                                                          • Experience of ale and stout brands
                                                                                            • National brands most consumed
                                                                                              • Figure 29: Consumer usage of various ale and stout brands, January 2010
                                                                                            • Brand consideration for ale and stout brands
                                                                                              • Familiarity breeds contempt for non drinkers
                                                                                                • Figure 30: Consideration of various ale and stout brands, January 2010
                                                                                              • Brand satisfaction for ale and stout brands
                                                                                                • Guinness most satisfying, Courage Best a disappointment
                                                                                                  • Figure 31: Satisfaction with various ale and stout brands, January 2010
                                                                                                • Brand commitment to ale and stout brands
                                                                                                  • Ales a last resort?
                                                                                                    • Figure 32: Commitment to various ale and stout brands, January 2010
                                                                                                  • Brand intentions for ale and stout brands
                                                                                                    • Guinness has strong retention, Courage Best tailing off
                                                                                                      • Figure 33: Future usage intentions for various ale and stout brands, January 2010
                                                                                                    • Brand recommendation for ale and stout brands
                                                                                                      • Guinness most recommended, Speckled Hen bucks ale aversion
                                                                                                        • Figure 34: Recommendation of various ale and stout brands, January 2010
                                                                                                      • John Smith’s
                                                                                                        • What the consumer thinks
                                                                                                          • Figure 35: Attitudes towards the John Smith’s brand, January 2010
                                                                                                        • Greene King IPA
                                                                                                          • What the consumer thinks
                                                                                                            • Figure 36: Attitudes towards the Greene King IPA brand, January 2010
                                                                                                          • Courage Best
                                                                                                            • What the consumer thinks
                                                                                                              • Figure 37: Attitudes towards the Courage Best brand, January 2010
                                                                                                            • Old Speckled Hen
                                                                                                              • What the consumer thinks
                                                                                                                • Figure 38: Attitudes towards the Old Speckled Hen brand, January 2010
                                                                                                              • Guinness
                                                                                                                • What the consumer thinks
                                                                                                                  • Figure 39: Attitudes towards the Guinness brand, January 2010
                                                                                                              • Market Share

                                                                                                                • Key points
                                                                                                                  • John Smith’s extra smooth is the number one performer in the off-trade
                                                                                                                    • Smaller, heritage brands capitalise on ale becoming back in vogue
                                                                                                                      • Figure 40: Trends for value sales of top ten off-trade ale/stout brands, 2007-09
                                                                                                                    • Guinness is increasing its share in both channels
                                                                                                                      • Greene King ale goes from strength to strength
                                                                                                                        • Worthington’s on-trade success not matched in the off-trade
                                                                                                                          • Figure 41: Trends for value sales of top ten on-trade ale/stout brands, 2007-09
                                                                                                                      • Channels to Market

                                                                                                                        • Key points
                                                                                                                          • A market highly dependent on pubs
                                                                                                                            • Figure 42: Channel distribution of ales and stouts, by volume sales, 2007-09
                                                                                                                          • Ales and supermarkets – an uneasy marriage
                                                                                                                          • Brand Communication and Promotion

                                                                                                                            • Key points
                                                                                                                              • A decline in advertising has done the category no harm
                                                                                                                                • Figure 43: Spend per year on above-the-line advertising for ale and stout, 2005-09
                                                                                                                              • Guinness dominates spend in a fragmented market
                                                                                                                                • Figure 44: Share of spend on above-the-line advertising for ale and stout, by brand, 2007-09
                                                                                                                              • Wells & Young’s is largest-spending ale brewery
                                                                                                                                • Figure 45: Share of spend on above-the-line advertising for ale and stout, by company, 2007-09
                                                                                                                            • Consumer Usage

                                                                                                                              • Key points
                                                                                                                                • 18-34s are primarily responsible for ale’s recent growth
                                                                                                                                  • Figure 46: Those who are more likely to have drunk ale than two years ago, by gender and age, February 2010
                                                                                                                                • The core base of ale/stout users remains older men
                                                                                                                                  • Figure 47: Index of ale/stout drinkers compared to lager, by gender, age and socio-economic group (100 = average), February 2010
                                                                                                                                • Stout and ale attract an almost identical user base
                                                                                                                                  • Figure 48: Index of ale drinkers compared to stout, by gender, age and socio-economic group (100 = average), February 2010
                                                                                                                                • Limited crossover between ale and stout drinkers
                                                                                                                                    • Figure 49: Crossover in drinking among standardised ale drinkers, cask ale, and stout drinkers, February 2010
                                                                                                                                  • Cask ale is attracting the younger crowd
                                                                                                                                      • Figure 50: Penetration for cask ale compared to standardised ale, by gender, age, socio-economic group and Mintel’s Special Groups, February 2010
                                                                                                                                    • Bottled ale/stout is driving growth in the off-trade
                                                                                                                                        • Figure 51: Trends in ale/stout usage, by format, 2005-09
                                                                                                                                      • Younger consumers are driving the success of bottled ale/stout
                                                                                                                                        • Figure 52: Increase in ale/stout usage, by format, by ABC1 Special Groups, 2007-09
                                                                                                                                    • Consumer – What Attracts Consumers to Ale and Stout?

                                                                                                                                      • Key points
                                                                                                                                        • Ale/stout drinkers want very different things than lager drinkers
                                                                                                                                            • Figure 53: Characteristics looked for when deciding what beer to drink, by type of beer drinker, February 2010
                                                                                                                                          • However, a refreshing, cooler serve also a priority for ale/stout drinkers...
                                                                                                                                              • Figure 54: Net difference in characteristics looked for in deciding what beer to drink – under-45s versus over-45s, February 2010*
                                                                                                                                            • …particularly for younger cask ale drinkers
                                                                                                                                              • Figure 55: Net difference in characteristics looked for in deciding what beer to drink amongst cask ale drinkers – under-45s versus over-45s, February 2010*
                                                                                                                                            • Cask ale brewers can do more to spread this message
                                                                                                                                                • Figure 56: What type of beer people choose when seeking refreshment or a cold serve, February 2010
                                                                                                                                              • Younger drinkers attracted by a pint which tastes different
                                                                                                                                                • However, different means a subtle, not radical, change in taste
                                                                                                                                                  • Why does regionality matter more to older consumers?
                                                                                                                                                    • Women will take some convincing to embrace ale en masse
                                                                                                                                                    • Consumer Attitudes Towards Ale

                                                                                                                                                      • Key points
                                                                                                                                                        • Ale is about individuality and quality
                                                                                                                                                            • Figure 57: Statements on drinking ale in the past year, February 2010
                                                                                                                                                          • Local, British microbreweries tap into rich emotional territory
                                                                                                                                                            • Young consumers are particularly adventurous…
                                                                                                                                                              • ...they are also more discerning
                                                                                                                                                                • Figure 58: Net difference in attitudes towards ale – under-45s versus over-45s, February 2010*
                                                                                                                                                            • Appendix

                                                                                                                                                              • Consumer research
                                                                                                                                                                • Advertising data
                                                                                                                                                                  • Focus groups
                                                                                                                                                                  • Appendix – Internal Market Environment

                                                                                                                                                                      • Figure 59: Trends in drinking, 2005-09
                                                                                                                                                                  • Appendix – Broader Market Environment

                                                                                                                                                                      • Figure 60: Trends for GDP, PDI and consumer expenditure, at real (2009) prices, 2004-14
                                                                                                                                                                      • Figure 61: Trends in levels of alcohol duty, 2004-10
                                                                                                                                                                      • Figure 62: Forecast adult population trends, by socio-economic group, 2004-14
                                                                                                                                                                      • Figure 63: Total adult population trends, by age group, 2004-14
                                                                                                                                                                  • Appendix – Competitive Context

                                                                                                                                                                      • Figure 64: Trends in types of alcohol drunk in the past year, 2005-09
                                                                                                                                                                  • Appendix – Brand Communication

                                                                                                                                                                      • Figure 65: Top ten highest-spending advertisers, 2007-09
                                                                                                                                                                      • Figure 66: Top ten highest-spending brands, 2007-09
                                                                                                                                                                  • Appendix – Consumer Usage

                                                                                                                                                                      • Figure 67: Types of ale drunk in the past year, by demographics, February 2010
                                                                                                                                                                      • Figure 68: Stout drunk in the past year, by demographics, February 2010
                                                                                                                                                                      • Figure 69: ‘I buy goods produced in my own country whenever I can’, by age group, 2009
                                                                                                                                                                  • Appendix – Consumer – What Attracts Consumers to Ale and Stout

                                                                                                                                                                      • Figure 70: Most popular characteristics looked for in deciding what beer to drink, by demographics, February 2010
                                                                                                                                                                      • Figure 71: Next most popular characteristics looked for in deciding what beer to drink, by demographics, February 2010
                                                                                                                                                                      • Figure 72: Other characteristics looked for in deciding what beer to drink, by demographics, February 2010
                                                                                                                                                                      • Figure 73: Net difference in characteristics looked for in deciding what beer to drink – ale drinkers versus stout drinkers, February 2010*
                                                                                                                                                                      • Figure 74: Net difference in characteristics looked for in deciding what beer to drink – men versus women, February 2010*
                                                                                                                                                                  • Appendix – Consumer Attitudes Towards Ale

                                                                                                                                                                      • Figure 75: Most popular statements on drinking ale or bitter, by demographics, February 2010
                                                                                                                                                                      • Figure 76: Next most popular statements on drinking ale or bitter, by demographics, February 2010
                                                                                                                                                                      • Figure 77: Difference in attitudes towards ale, by type of ale drinker, February 2010

                                                                                                                                                                  Companies Covered

                                                                                                                                                                  • Adnams plc
                                                                                                                                                                  • Advertising Standards Authority
                                                                                                                                                                  • Anheuser Busch-InBev
                                                                                                                                                                  • Asda Group Ltd
                                                                                                                                                                  • Belhaven Brewery Company Ltd.
                                                                                                                                                                  • British Beer and Pub Association
                                                                                                                                                                  • British Market Research Bureau (BMRB)
                                                                                                                                                                  • British Medical Association (BMA)
                                                                                                                                                                  • Carbon Trust
                                                                                                                                                                  • Carlsberg UK Ltd
                                                                                                                                                                  • Co-operative Group
                                                                                                                                                                  • Coors Brewers Ltd (UK)
                                                                                                                                                                  • Department of Health
                                                                                                                                                                  • Diageo UK
                                                                                                                                                                  • Fuller, Smith & Turner Plc
                                                                                                                                                                  • Gordon Ramsay Holdings
                                                                                                                                                                  • Government Actuary's Department (GAD)
                                                                                                                                                                  • Greene King Brewing and Retailing Ltd
                                                                                                                                                                  • Guinness
                                                                                                                                                                  • Halewood International Ltd
                                                                                                                                                                  • Interbrew UK
                                                                                                                                                                  • JD Wetherspoon
                                                                                                                                                                  • Mitchells & Butlers Plc
                                                                                                                                                                  • Molson Coors Brewing Company
                                                                                                                                                                  • Office for National Statistics
                                                                                                                                                                  • Outdoor Advertising Association of Great Britain
                                                                                                                                                                  • Starbucks Coffee Company UK Ltd
                                                                                                                                                                  • Tesco Plc
                                                                                                                                                                  • Wells & Young's Brewing Company Ltd

                                                                                                                                                                  Ales and Stouts - UK - May 2010

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