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Beer - UK - December 2014

“Immigration into the UK from countries such as Romania and Bulgaria looks set to continue in the coming years. The time may therefore now be right for retailers and brands alike to roll out beers from these countries more widely in the UK, particularly as the major beer companies such as Heineken and SABMiller already own many of the breweries.”
– Chris Wisson, Senior Drinks Analyst

This report looks at the following areas:

  • Older consumers could be key for the craft beer segment
  • Capitalising on Britain’s changing population
  • Leveraging beer and food matching
  • What could the removal of the beer tie mean for the industry?

Beer continues to dominate the alcoholic drinks landscape, with 67% of adults drinking beer in the six months to September 2014. However, the category has struggled in the post-recession years as consumers continue to cut back on alcohol in general, and a rising number of drinkers switched into other categories such as cider.

Nevertheless, beer is now fighting back. Buoyed by favourable government intervention in the past two Budgets, it is expected to return to volume growth in 2014. This volume growth is being driven entirely by the off-trade as the on-trade continues to struggle largely due to its unfavourable comparison on price. Several segments such as flavoured and lower-alcohol beers continue to post encouraging growth, suggesting a brighter immediate future for the market.

Lifted by the new industry campaign ‘There’s a Beer for That’, beer and food pairing is expected to become an even more visible theme in the coming years. Looking to upgrade how beer is served and presented in the on-trade, to match the premium taste, could help to retain this volume growth and allow both the on- and off-trade channels to achieve volume growth in the coming years.

This report looks at the UK market for beer sold in both the on-trade, ie out-of-home outlets such as pubs, restaurants and clubs where the drink is consumed on the premises, and the off-trade (or take-home) market, eg supermarkets, off-licences and convenience stores.

The beer market is divided into three main segments:

  • Lager can broadly be described as a light/amber, clear, carbonated beer brewed with pale-kilned malts which, after fermentation, is filtered, pasteurised and conditioned before being packaged in cans, bottles or kegs for sale.
    Lagers were often previously loosely defined as premium/standard/economy, based on their alcohol content. However, this picture is now changing as many beers reduce their ABV slightly and as lower-alcohol beers become more popular, benefiting from government tax breaks on beers with an ABV of 2.8% or less.
    Spirit- and fruit-flavoured beers are also included within lager in this report.
     
  • Ale is sometimes referred to by consumers as mild or bitter, but the term ‘ale’ is used throughout this report. This refers to top-fermented beers including bitter and mild, pale, export and brown ales, stout, porter, barley wine and strong ales, as well as Indian and American pale ales, among others. These beers are so-called because the yeast floats to the surface during fermentation, as opposed to lagers, which are bottom-fermented. Barley wine is simply a beer with a very high ABV.
    Cask ales are pulled by hand pump and oxidise in an aerobic environment once opened, which demands quick throughput to maintain optimum condition and means they are served from a cask without additional carbon dioxide or nitrogen pressure. Cask ales go through a process of ‘secondary fermentation’ while being stored in pubs, meaning that each barrel often has a unique taste. They are sometimes referred to by consumers and/or the trade as ‘real ale’. However, the definition of real ale also includes ales which are bottle conditioned.
    Alcoholic ginger beer and bitter are also included within ales in this report.
     
  • Stout is a derivative of porter, originally an 18th century brown mild ale. Stout is a black, dense beer, which is usually top-fermented, and made with dark roasted barley and an abundance of hops, which provide the characteristic flavour. Both on- and off-trade sales are included in the UK market size. Value sales throughout this report are at consumer prices. Market sizes at constant 2014 prices are devised using Mintel’s alcoholic drinks deflator.

 

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Forecast of UK value sales of beer, 2009-19
            • Market factors
              • Alcohol consumption is in decline
                • End of the road for the beer escalator
                  • Population changes entail threats and opportunities
                    • The rise of craft brewers
                      • Beer looks to become even more versatile
                        • Companies, brands and innovation
                          • Foster’s looks set to lose top spot in the off-trade beer market
                            • Figure 2: Value sales of top-selling beer brands in the off-trade, 2013/14
                          • Innovation and adspend continue to drive category visibility
                            • The consumer
                              • Lager remains the most popular type of beer
                                • Figure 3: Usage of different types of beer within the past six months, September 2014
                              • 62% of beer drinkers drink beer at least once a week
                                • The pub/bar is the most popular place to drink beer
                                  • Figure 4: Occasions for drinking beer, September 2014
                                • High-quality ingredients are key to projecting a premium image
                                  • Glass bottles are still much more popular than cans
                                    • Figure 5: Beer preferences, September 2014
                                  • Beer can be a good fit in formal dining occasions
                                    • Figure 6: Attitudes towards beer, September 2014
                                  • What we think
                                  • Issues and Insights

                                      • Older consumers could be key for the craft beer segment
                                        • The facts
                                          • The implications
                                            • Capitalising on Britain’s changing population
                                              • The facts
                                                • The implications
                                                  • Leveraging beer and food matching
                                                    • The facts
                                                      • The implications
                                                        • What could the removal of the beer tie mean for the industry?
                                                          • The facts
                                                            • The implications
                                                            • Trend Application

                                                                • Guiding Choice
                                                                  • Objectify
                                                                    • Brand Intervention
                                                                    • Market Drivers

                                                                      • Key points
                                                                        • Taxation rates level off
                                                                          • Figure 7: UK excise duty rates for selected alcoholic drinks, 2003-14
                                                                          • Figure 8: RPI indexed annual change for alcoholic drinks prices versus all items except housing, 2000-13
                                                                          • Figure 9: RPI indexed annual change for beer – on- and off-trade, 2000-13
                                                                        • Craft continues to flourish
                                                                          • Bridging occasions and the gender divide
                                                                            • Figure 10: Hours of sunshine in the UK, by month, 2009-14
                                                                          • Financial health recovers but remains fragile
                                                                            • Figure 11: Consumers’ financial health index, January 2009-July 2014
                                                                          • An ageing population poses threats to the beer market
                                                                            • Figure 12: Projected trends in the age structure of the UK population, 2014-19
                                                                          • The importance of C2s
                                                                          • Competitive Context

                                                                            • Key points
                                                                              • UK consumers continue to cut back on alcohol
                                                                                • Figure 13: Trends in UK per capita consumption of 100% alcohol, 2006-13
                                                                                • Figure 14: HM Treasury estimated changes in volume consumption of alcohol over 2014/15-2018/19 following changes to alcohol duty in Budget 2014
                                                                                • Figure 15: Value sales of selected alcoholic drinks categories, 2009-14
                                                                            • Strengths and Weaknesses

                                                                              • Strengths
                                                                                • Weaknesses
                                                                                • Who’s Innovating?

                                                                                  • Key points
                                                                                    • Heineken pushes the innovation envelope
                                                                                      • Using social media and technology
                                                                                        • Working in partnerships
                                                                                          • Branded launches of note
                                                                                            • Up-and-coming trends…
                                                                                            • Market Size and Forecast

                                                                                              • Key points
                                                                                                • Beer volumes finally nudge back into growth
                                                                                                  • Figure 16: UK value and volume sales of beer, at current and constant prices, 2009-19
                                                                                                  • Figure 17: Forecast of UK value sales of beer, 2009-19
                                                                                                  • Figure 18: Forecast of UK volume sales of beer, 2009-19
                                                                                                • Forecast methodology
                                                                                                • Segment Performance

                                                                                                  • Key points
                                                                                                    • Lager drives the market back into volume growth
                                                                                                      • Figure 19: Total UK value and volume sales of lager, at current and constant prices, 2009-19
                                                                                                      • Figure 20: Forecast of UK value sales of lager, 2009-19
                                                                                                    • Ale shows robust value growth
                                                                                                      • Figure 21: Total UK value and volume sales of ale/bitter/ginger beer, at current and constant prices, 2009-19
                                                                                                      • Figure 22: Forecast of UK value sales of ale/bitter/ginger beer, 2009-19
                                                                                                    • Stout sales continue to slide
                                                                                                      • Figure 23: UK value and volume sales of stout, at current and constant prices, 2009-19
                                                                                                      • Figure 24: Forecast of UK value sales of stout, 2009-19
                                                                                                  • Channels to Market

                                                                                                    • Key points
                                                                                                      • Off-trade volumes prove to be more resolute than the on-trade
                                                                                                        • Figure 25: UK value and volume sales of beer in the off-trade, at current and constant prices, 2009-14
                                                                                                        • Figure 26: UK value and volume sales of beer in the on-trade, at current and constant prices, 2009-14
                                                                                                      • The multiple grocers remain dominant
                                                                                                      • Market Share

                                                                                                        • Key points
                                                                                                          • AB InBev remains the main player in the lager segment
                                                                                                            • Figure 27: Leading manufacturers’ value and volume shares of lager sales in the off-trade, 2013/14
                                                                                                            • Figure 28: Value sales of top-selling lager brands in the off-trade, 2012/13 and 2013/14
                                                                                                            • Figure 29: Volume sales of top-selling lager brands in the off-trade, 2012/13 and 2013/14
                                                                                                          • Foster’s poised to jump to the top of the pile
                                                                                                            • Contrasting fortunes for Carlsberg and Molson Coors
                                                                                                              • A changing of the guard in ale?
                                                                                                                • Figure 30: Leading manufacturers’ value and volume shares of ale/bitter/ginger beer sales in the off-trade, 2013/14
                                                                                                                • Figure 31: Value sales of top-selling ale/bitter/ginger beer brands in the off-trade, 2012/13 and 2013/14
                                                                                                                • Figure 32: Volume sales of top-selling ale/bitter/ginger beer brands in the off-trade, 2012/13 and 2013/14
                                                                                                              • Guinness finally halts its decline
                                                                                                                • Figure 33: Leading manufacturers’ value and volume shares of stout sales in the off-trade, 2013/14
                                                                                                                • Figure 34: Value sales of top-selling stout brands in the off-trade, 2012/13 and 2013/14
                                                                                                                • Figure 35: Volume sales of top-selling stout brands in the off-trade, 2012/13 and 2013/14
                                                                                                            • Companies and Products

                                                                                                              • AB InBev
                                                                                                                • Overview and product range
                                                                                                                  • Recent activity and innovation
                                                                                                                    • Carlsberg
                                                                                                                      • Overview and product range
                                                                                                                        • Recent activity and innovation
                                                                                                                          • Diageo
                                                                                                                            • Overview and product range
                                                                                                                              • Recent activity and innovation
                                                                                                                                • Heineken
                                                                                                                                  • Overview and product range
                                                                                                                                    • Recent activity and innovation
                                                                                                                                      • Molson Coors
                                                                                                                                        • Overview and product range
                                                                                                                                          • Recent activity and innovation
                                                                                                                                            • SABMiller (Miller Brands)
                                                                                                                                              • Overview and product range
                                                                                                                                                • Recent activity and innovation
                                                                                                                                                • Brand Communication and Promotion

                                                                                                                                                  • Key points
                                                                                                                                                    • Beer adspend fell away in 2013
                                                                                                                                                      • Figure 36: Above-the-line adspend in the UK beer market, 2011-14
                                                                                                                                                    • Molson Coors and Heineken go head-to-head for the leading advertiser
                                                                                                                                                      • Figure 37: Leading advertisers in the UK beer category, by company, 2013
                                                                                                                                                      • Figure 38: Leading advertisers in the UK beer category, by company, 2011-14
                                                                                                                                                    • Carling is the most advertised beer in the UK
                                                                                                                                                        • Figure 39: Leading advertisers in the UK beer category, by brand, 2013
                                                                                                                                                        • Figure 40: Leading advertisers in the UK beer category, by brand, 2011-14
                                                                                                                                                      • TV is the preferred medium for beer advertisers
                                                                                                                                                      • Brand Research

                                                                                                                                                        • Brand map
                                                                                                                                                            • Figure 41: Attitudes towards and usage of brands in the beer sector, October 2014
                                                                                                                                                          • Correspondence analysis
                                                                                                                                                            • Brand attitudes
                                                                                                                                                              • Figure 42: Attitudes, by beer brand, October 2014
                                                                                                                                                            • Brand personality
                                                                                                                                                              • Figure 43: Beer brand personality – Macro image, October 2014
                                                                                                                                                              • Figure 44: Beer brand personality – Micro image, October 2014
                                                                                                                                                            • Brand experience
                                                                                                                                                              • Figure 45: Beer brand usage, October 2014
                                                                                                                                                              • Figure 46: Satisfaction with various beer brands, October 2014
                                                                                                                                                              • Figure 47: Consideration of beer brands, October 2014
                                                                                                                                                            • Brand recommendation
                                                                                                                                                              • Figure 48: Recommendation of selected beer brands, October 2014
                                                                                                                                                          • The Consumer – Usage of Beer

                                                                                                                                                            • Key points
                                                                                                                                                              • Lager remains the most popular type of beer
                                                                                                                                                                  • Figure 49: Usage of different types of beer within the past six months, September 2014
                                                                                                                                                                  • Figure 50: Usage of different types of beer within the past six months, by location, September 2014
                                                                                                                                                                  • Figure 51: Usage of different types of beer within the past six months, by gender and age, September 2014
                                                                                                                                                                • Craft continues to flourish
                                                                                                                                                                  • 36% of beer drinkers drink three or more types
                                                                                                                                                                      • Figure 52: Repertoire of usage of different types of beer, September 2014
                                                                                                                                                                  • The Consumer – Frequency of Drinking Beer

                                                                                                                                                                    • Key points
                                                                                                                                                                      • 62% of beer drinkers do so at least once a week
                                                                                                                                                                        • Figure 53: Frequency of drinking beer, September 2014
                                                                                                                                                                    • The Consumer – Occasions for Drinking Beer

                                                                                                                                                                      • Key points
                                                                                                                                                                        • The pub/bar is the most popular place to drink beer
                                                                                                                                                                          • Figure 54: Occasions for drinking beer, September 2014
                                                                                                                                                                          • Figure 55: Occasions for drinking beer – alone or with others, September 2014
                                                                                                                                                                        • Beer is also popular in other social occasions
                                                                                                                                                                          • Beer and food: a match made in heaven?
                                                                                                                                                                          • The Consumer – Associations with Premium Beer

                                                                                                                                                                            • Key points
                                                                                                                                                                              • High-quality ingredients are key to projecting a premium image
                                                                                                                                                                                • Figure 56: Associations with premium beer (any ranking 1-5), September 2014
                                                                                                                                                                                • Figure 57: Associations with premium beer (rank 1), September 2014
                                                                                                                                                                              • Heritage/history can also be a strong premium cue
                                                                                                                                                                                • Branding is important for premiumisation
                                                                                                                                                                                • The Consumer – Beer Preferences

                                                                                                                                                                                  • Key points
                                                                                                                                                                                    • Glass bottles are still much more popular than cans
                                                                                                                                                                                      • Figure 58: Beer preferences, September 2014
                                                                                                                                                                                      • Figure 59: Preferences in beer bottle size, September 2014
                                                                                                                                                                                      • Figure 60: Preferences in beer can size, September 2014
                                                                                                                                                                                    • Lighter beers preferred to dark
                                                                                                                                                                                      • Mainstream beers still preferred by the majority
                                                                                                                                                                                        • Tradition still important in terms of flavour and carbonation
                                                                                                                                                                                        • The Consumer – Attitudes towards Beer

                                                                                                                                                                                          • Key points
                                                                                                                                                                                            • Summary of attitudes towards beer
                                                                                                                                                                                              • Figure 61: Attitudes towards beer, September 2014
                                                                                                                                                                                            • Beer can be a good fit in formal dining occasions
                                                                                                                                                                                              • Figure 62: Attitudes towards food and beer, September 2014
                                                                                                                                                                                            • Beer brands need to prove their credentials
                                                                                                                                                                                              • Figure 63: Attitudes towards the taste of beer, September 2014
                                                                                                                                                                                            • Craft beer continues to grow but does it need a definition?
                                                                                                                                                                                                • Figure 64: Attitudes towards craft beer, September 2014
                                                                                                                                                                                              • Potential for growth of lower-alcohol beers
                                                                                                                                                                                                  • Figure 65: Other attitudes towards beer, September 2014
                                                                                                                                                                                              • The Consumer – Target Groups

                                                                                                                                                                                                • Key points
                                                                                                                                                                                                  • Four target groups
                                                                                                                                                                                                    • Figure 66: Target groups for beer, September 2014
                                                                                                                                                                                                  • Connoisseurs (28%)
                                                                                                                                                                                                    • Disengaged (26%)
                                                                                                                                                                                                      • Enthusiasts (23%)
                                                                                                                                                                                                        • Price-conscious (23%)
                                                                                                                                                                                                        • Appendix – Market Size and Forecast

                                                                                                                                                                                                            • Figure 67: Best- and worst-case forecasts for the UK beer market, by value, 2014-19
                                                                                                                                                                                                            • Figure 68: Best- and worst-case forecasts for the UK beer market, by volume, 2014-19
                                                                                                                                                                                                            • Figure 69: Best- and worst-case forecasts for the UK lager market, by value, 2014-19
                                                                                                                                                                                                            • Figure 70: Best- and worst-case forecasts for the UK lager market, by volume, 2014-19
                                                                                                                                                                                                            • Figure 71: Forecast of UK volume sales of lager, 2009-19
                                                                                                                                                                                                            • Figure 72: Best- and worst-case forecasts for the UK ale/bitter/ginger beer market, by value, 2014-19
                                                                                                                                                                                                            • Figure 73: Best- and worst-case forecasts for the UK ale/bitter/ginger beer market, by volume, 2014-19
                                                                                                                                                                                                            • Figure 74: Forecast of UK volume sales of ale/bitter/ginger beer, 2009-19
                                                                                                                                                                                                            • Figure 75: Best- and worst-case forecasts for the UK stout market, by value, 2014-19
                                                                                                                                                                                                            • Figure 76: Best- and worst-case forecasts for the UK stout market, by volume, 2014-19
                                                                                                                                                                                                            • Figure 77: Forecast of UK volume sales of stout, 2009-19

                                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                                        • Advertising Standards Authority
                                                                                                                                                                                                        • Anheuser-Busch Companies Inc
                                                                                                                                                                                                        • Asda Group Ltd
                                                                                                                                                                                                        • Barclays Bank plc
                                                                                                                                                                                                        • Campaign for Real Ale
                                                                                                                                                                                                        • Carlsberg UK Ltd
                                                                                                                                                                                                        • Cobra Beer
                                                                                                                                                                                                        • Coca-Cola GB
                                                                                                                                                                                                        • Coors Brewers Ltd (UK)
                                                                                                                                                                                                        • Diageo Plc
                                                                                                                                                                                                        • Diageo UK
                                                                                                                                                                                                        • Football Association (The)
                                                                                                                                                                                                        • Global Brands, Inc.
                                                                                                                                                                                                        • Grupo Modelo S.A. de C.V.
                                                                                                                                                                                                        • Heineken N.V.
                                                                                                                                                                                                        • Metro (The)
                                                                                                                                                                                                        • Miller Brands (UK) Ltd
                                                                                                                                                                                                        • Molson Coors Brewing Company
                                                                                                                                                                                                        • SABMiller PLC
                                                                                                                                                                                                        • San Miguel Corporation
                                                                                                                                                                                                        • Twitter, Inc.

                                                                                                                                                                                                        Beer - UK - December 2014

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