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Beer - UK - December 2016

“With the concept of pairing beer with food having gained traction among UK consumers, “dine in” meal deals look to be a huge missed opportunity for beer. These would provide an ideal platform to give world beers – which are already growing in popularity – even more visibility through partnering them with the cuisine from their respective countries of origin.”
– Emma Clifford, Senior Food and Drink Analyst

This report discusses the following key topics:

  • Despite efforts, food pairing remains a missed opportunity for beer
  • Nutritional labelling presents a chance to stand out among young beer drinkers
  • It’s time to shine for the smaller volume beer formats

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 market, eg supermarkets, off-licences and convenience stores.

The beer market is divided into the following 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. Spirit- and fruit-flavoured beers are also included within lager in this Report.
  • Ale refers to top-fermented beers including bitter and mild, pale, export and brown ales, 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. In the market size, stout/porter is treated as a separate category.
  • 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.

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Figure 1: Forecast of UK value sales of beer, 2011-21
          • Segmentation
            • The future
              • New alcohol guidelines draw more attention to health risks
                • Ageing population and slowdown in growth of 25-34s pose a challenge
                  • Companies and brands
                    • A number of top lager brands enjoy double-digit growth
                      • Hobgoblin and Sharp’s enjoy rapid growth
                        • Craft NPD from major players
                          • Tesco Express, Aldi and the Co-op expand their craft beer offering
                            • Adspend on beer slumps by a fifth
                              • The consumer
                                • Overall usage of beer stabilises, with areas of growth
                                  • Figure 2: Usage of types of beer, October 2015 and September 2016
                                • Over two fifths of beer drinkers do so more than once a week
                                  • Figure 3: Frequency of drinking beer, September 2016
                                • Brand has the biggest sway over beer choice
                                  • Figure 4: Order in which factors are considered when choosing which beer to buy, September 2016
                                • Locally-brewed beer attracts most interest
                                  • Fruit-based lager NPD can open up the category to more women
                                    • Figure 5: Interest in innovation in beer, September 2016
                                  • More evening meal deals should include beers
                                    • Figure 6: Beer drinking behaviours, September 2016
                                  • Pros and cons to smaller formats
                                    • Providing details on hops can boost quality perceptions
                                      • Figure 7: Attitudes towards beer, September 2016
                                    • What we think
                                    • Issues and Insights

                                      • Despite efforts, food pairing remains a missed opportunity for beer
                                        • The facts
                                          • The implications
                                            • Nutritional labelling presents a chance to stand out among young beer drinkers
                                              • The facts
                                                • The implications
                                                  • It’s time to shine for the smaller volume beer formats
                                                    • The facts
                                                      • The implications
                                                      • The Market – What You Need to Know

                                                        • Volume sales of beer remain broadly flat
                                                          • Lager dominants, but ale steals share
                                                            • Off-trade overtakes on-trade in volume sales of beer
                                                              • Fourth consecutive year of volume growth in the off-trade
                                                                • Share captured by independents and online grows
                                                                  • Stability in the beer market expected to endure
                                                                    • The shift to off-trade purchasing set to curb the impact of inflation
                                                                      • New alcohol guidelines draw more attention to health risks
                                                                        • Ageing population and slowdown in growth of 25-34s pose a challenge
                                                                        • Market Size and Segmentation

                                                                          • Volume sales of beer remain more or less flat
                                                                            • Figure 8: Total value and volume sales of beer, at current and constant prices, 2011-21
                                                                          • Lager’s dominance in the beer market is being eroded
                                                                              • Figure 9: Total value and volume sales of lager, at current and constant prices, 2011-21
                                                                            • Volume sales of ale/bitter up 5% in two years
                                                                              • Figure 10: Total value and volume sales of ale/bitter, at current and constant prices, 2011-21
                                                                            • Stout returns to growth
                                                                              • Figure 11: Total value and volume sales of stout/porter, at current and constant prices, 2011-21
                                                                            • The future
                                                                              • Only a negligible fall in volume sales predicted
                                                                                • The shift to off-trade purchasing set to curb the impact of inflation
                                                                                  • Figure 12: Forecast of UK value sales of beer, 2011-21
                                                                                  • Figure 13: Forecast of UK volume sales of beer, 2011-21
                                                                                • The impact of the EU Referendum
                                                                                  • Figure 14: Alternative scenarios for the beer market, 2016-21
                                                                                • The calm before the storm?
                                                                                  • Consumers’ remain optimistic about their finances
                                                                                    • The market was in a different place in 2008-09
                                                                                    • Channels to Market

                                                                                      • Off-trade overtakes on-trade in volume sales of beer
                                                                                        • Ale/bitter is going from strength to strength
                                                                                          • Figure 15: Value and volume sales of beer, by channel, 2011-16
                                                                                        • Fourth consecutive year of volume growth in the off-trade
                                                                                          • Share captured by independents and online grows
                                                                                            • Big brands make a play for online delivery
                                                                                            • Market Drivers

                                                                                              • New alcohol guidelines draw more attention to health risks
                                                                                                • New opportunities for premium drinks, lower/no-alcohol drinks and smaller formats
                                                                                                  • The small tax relief for alcohol producers is set to be outweighed by other upward pressures on cost
                                                                                                    • Figure 16: UK excise duty rates for selected alcoholic drinks, 2004-16
                                                                                                  • Brexit could hike up prices of imported alcohol
                                                                                                    • Opportunities for domestic beer brands and entrepreneurial brewers
                                                                                                      • The on-trade set to be affected by more cautious spending habits
                                                                                                        • The new Pubs Code comes into force
                                                                                                          • Ageing population and slowdown in growth of 25-34s pose a challenge
                                                                                                            • Figure 17: Change in age structure of the UK population, 2011-16 and 2016-21
                                                                                                        • Companies and Brands – What You Need to Know

                                                                                                          • A number of top lager brands enjoy double-digit growth
                                                                                                            • Tesco delisting hits sales of Carlsberg
                                                                                                              • Hobgoblin and Sharp’s enjoy rapid growth
                                                                                                                • Guinness returns to growth
                                                                                                                  • Craft NPD from major players
                                                                                                                    • Tesco Express, Aldi and the Co-op expand their craft beer offering
                                                                                                                      • AB InBev to provide full nutritional information for its beers
                                                                                                                        • Adspend on beer slumps by a fifth
                                                                                                                        • Market Share

                                                                                                                          • The mega merger of AB InBev and SABMiller goes ahead
                                                                                                                            • A number of top lager brands enjoy double-digit growth
                                                                                                                              • Strong performances from world lagers
                                                                                                                                • Tesco delisting hits sales of Carlsberg
                                                                                                                                  • Figure 18: Retail sales of the leading lager brands in the UK, by value and volume, 2014/15-2015/16
                                                                                                                                  • Figure 19: Retail sales of the leading lager manufacturers in the UK, by value and volume, 2014/15-2015/16
                                                                                                                                • Hobgoblin and Sharp’s enjoy rapid growth
                                                                                                                                  • Sales of BrewDog triple
                                                                                                                                    • Figure 20: Retail sales of the leading ale brands in the UK, by value and volume, 2014/15-2015/16
                                                                                                                                    • Figure 21: Retail sales of the leading ale manufacturers in the UK, by value and volume, 2014/15-2015/16
                                                                                                                                  • Guinness returns to growth
                                                                                                                                    • Figure 22: Retail sales of the leading stout/porter brands in the UK, by value and volume, 2014/15-2015/16
                                                                                                                                • Launch Activity and Innovation

                                                                                                                                  • Craft NPD from major players
                                                                                                                                    • First foray into small-batch beers for Meantime
                                                                                                                                      • Shed Head: the new craft beer from Carlsberg
                                                                                                                                        • Tesco Express, Aldi and the Co-op expand their craft beer offering
                                                                                                                                          • More experimental NPD activity from BrewDog
                                                                                                                                            • Buoyant NPD in flavoured beer/lager
                                                                                                                                              • NPD in fruit and botanical flavours well-placed to appeal to 25-34s
                                                                                                                                                • Lemon and lime from Kopparberg, botanicals from Lowlander
                                                                                                                                                  • The rise of the 330ml can
                                                                                                                                                    • Small cans move from craft to mainstream
                                                                                                                                                      • Recent launches range from Fullers to Wychwood
                                                                                                                                                        • AB InBev to provide full nutritional information for its beers…
                                                                                                                                                          • …and forays into alcohol-free beer
                                                                                                                                                            • Gluten-free innovation from Carlsberg and Peroni
                                                                                                                                                              • A number of large beer brands undertook packaging revamps in 2016
                                                                                                                                                                • San Miguel and Stella hope to create a premium feel
                                                                                                                                                                  • Carlsberg looks to emphasise heritage, Marston’s hopes to modernise
                                                                                                                                                                  • Advertising and Marketing Activity

                                                                                                                                                                    • Adspend on beer slumps by a fifth
                                                                                                                                                                      • Figure 23: Total above-the line, online display and direct mail advertising expenditure on beer, 2012-16
                                                                                                                                                                      • Figure 24: Total above-the line, online display and direct mail advertising expenditure on beer, by category, 2012-16
                                                                                                                                                                    • AB Inbev becomes adspend leader in 2015
                                                                                                                                                                      • Stella marks its 600th anniversary with global campaign
                                                                                                                                                                        • Figure 25: Total above-the line, online display and direct mail advertising expenditure on beer, by top 10 highest-spending advertisers in 2015, 2012-16
                                                                                                                                                                        • Figure 26: Total above-the line, online display and direct mail advertising expenditure on beer, by top 15 highest-spending brands, 2012-16
                                                                                                                                                                      • Guinness makes big strides in social media advertising
                                                                                                                                                                        • Support for responsible drinking of beer boosted
                                                                                                                                                                          • Heineken continues to deliver responsible drinking messages
                                                                                                                                                                            • …with a major push behind this same theme from Budweiser
                                                                                                                                                                              • AB InBev ran a local campaign in Preston
                                                                                                                                                                                • Carlsberg jumps up the ranks in adspend
                                                                                                                                                                                  • Pubs are at the core of Carlsberg’s advertising for Euro 2016
                                                                                                                                                                                    • Estrella Damm’s Vale: an example of the blurring of films and adverts
                                                                                                                                                                                      • Typically atypical marketing from BrewDog
                                                                                                                                                                                        • Other notable digital and social campaigns
                                                                                                                                                                                          • Fuller’s unites OOH and social media in its #FindFlavour campaign
                                                                                                                                                                                            • Miller brands introduces a Pint Finder App for Kozel
                                                                                                                                                                                              • Carlsberg partners with MatchPint for UEFA Euro 2016
                                                                                                                                                                                                • Nielsen Ad Intel coverage
                                                                                                                                                                                                • Brand Research

                                                                                                                                                                                                    • Brand map
                                                                                                                                                                                                      • Figure 27: Attitudes towards and usage of selected brands, September 2016
                                                                                                                                                                                                    • Key brand metrics
                                                                                                                                                                                                      • Figure 28: Key metrics for selected brands, September 2016
                                                                                                                                                                                                    • Brand attitudes: Guinness is seen to have strong quality credentials
                                                                                                                                                                                                      • Figure 29: Attitudes, by brand, September 2016
                                                                                                                                                                                                    • Brand personality: Desperados stands out on fun and vibrancy
                                                                                                                                                                                                      • Figure 30: Brand personality – Macro image, September 2016
                                                                                                                                                                                                    • Peroni has the most stylish and sophisticated image
                                                                                                                                                                                                      • Figure 31: Brand personality – Micro image, September 2016
                                                                                                                                                                                                    • Brand analysis
                                                                                                                                                                                                      • Peroni is at the fore in terms of engagement
                                                                                                                                                                                                        • Figure 32: User profile of Peroni, September 2016
                                                                                                                                                                                                      • Desperados stands out as fun and vibrant
                                                                                                                                                                                                        • Figure 33: User profile of Desperados, September 2016
                                                                                                                                                                                                      • Old Speckled Hen scores well on authenticity
                                                                                                                                                                                                        • Figure 34: User profile of Old Speckled Hen, September 2016
                                                                                                                                                                                                      • Stella Artois is seen as innovative
                                                                                                                                                                                                        • Figure 35: User profile of Stella Artois, September 2016
                                                                                                                                                                                                      • Guinness has an enviable all-round reputation
                                                                                                                                                                                                        • Figure 36: User profile of Guinness, September 2016
                                                                                                                                                                                                      • Budweiser garners a fun image among young men
                                                                                                                                                                                                        • Figure 37: User profile of Budweiser, September 2016
                                                                                                                                                                                                      • Foster’s win on value for money
                                                                                                                                                                                                        • Figure 38: User profile of Foster’s, September 2016
                                                                                                                                                                                                      • John Smith’s is marred with a tired and boring image
                                                                                                                                                                                                        • Figure 39: User profile of John Smith’s, September 2016
                                                                                                                                                                                                    • The Consumer – What You Need to Know

                                                                                                                                                                                                      • Overall usage of beer stabilises, with areas of growth
                                                                                                                                                                                                        • Over two fifths of beer drinkers do so more than once a week
                                                                                                                                                                                                          • Brand has the biggest sway over beer choice
                                                                                                                                                                                                            • Promotions remain a strong driver
                                                                                                                                                                                                              • Locally-brewed beer attracts most interest
                                                                                                                                                                                                                • Fruit-based lager NPD can open up the category to more women
                                                                                                                                                                                                                  • More evening meal deals should include beers
                                                                                                                                                                                                                    • Age divide in preference for nutritional labelling
                                                                                                                                                                                                                      • Pros and cons to smaller formats
                                                                                                                                                                                                                        • Providing details on hops can boost quality perceptions
                                                                                                                                                                                                                        • Usage of Beer

                                                                                                                                                                                                                          • Overall usage of beer stabilises, with areas of growth
                                                                                                                                                                                                                            • Figure 40: Usage of beer, by type, October 2015 and September 2016
                                                                                                                                                                                                                          • A big gap in usage between the sexes
                                                                                                                                                                                                                            • Usage peaks among 25-34s
                                                                                                                                                                                                                              • Figure 41: Usage of types of beer, by location, September 2016
                                                                                                                                                                                                                            • Over two fifths of beer drinkers do so more than once a week
                                                                                                                                                                                                                              • Figure 42: Frequency of drinking beer, September 2016
                                                                                                                                                                                                                          • Factors Considered When Buying Beer

                                                                                                                                                                                                                            • Brand has the biggest sway over beer choice
                                                                                                                                                                                                                              • Figure 43: Order in which factors are considered when choosing which beer to buy, September 2016
                                                                                                                                                                                                                            • Promotions remain a strong driver
                                                                                                                                                                                                                              • Under-35s most likely to look at price per can/bottle and litre and seek chilled beer
                                                                                                                                                                                                                                • Under-25s place most importance on ABV
                                                                                                                                                                                                                                • Interest in Innovation in Beer

                                                                                                                                                                                                                                  • Locally-brewed beer attracts most interest
                                                                                                                                                                                                                                    • Rise of small breweries offers scope for retailers and on-trade to leverage this interest
                                                                                                                                                                                                                                      • Figure 44: Interest in innovation in beer, September 2016
                                                                                                                                                                                                                                    • Interest in barrel-aged beer peaks among over-55s
                                                                                                                                                                                                                                      • Beer can draw on positivity around barrel-aged spirits and natural cues
                                                                                                                                                                                                                                        • Linking with bourbon can boost appeal among the young
                                                                                                                                                                                                                                          • Flavour-based innovation and blends chime most among 25-34s
                                                                                                                                                                                                                                            • Fruit-based lager NPD can open up the category to more women
                                                                                                                                                                                                                                              • Interest in sour beer remains niche despite industry noise around this concept
                                                                                                                                                                                                                                                • Figure 45: Interest in flavour- and blend-based innovation in beer, by age, September 2016
                                                                                                                                                                                                                                            • Beer Drinking Behaviours

                                                                                                                                                                                                                                              • More evening meal deals should include beers
                                                                                                                                                                                                                                                • Most 25-34s are interested in more food pairing suggestions
                                                                                                                                                                                                                                                  • Figure 46: Beer drinking behaviours, September 2016
                                                                                                                                                                                                                                                • Age divide in preference for nutritional labelling
                                                                                                                                                                                                                                                  • Half of 18-24s would choose a beer with nutrition details
                                                                                                                                                                                                                                                    • Figure 47: Consumers who would choose a beer with nutrition labelling over one without, by age, September 2016
                                                                                                                                                                                                                                                  • Responsible drinking behaviour is widespread
                                                                                                                                                                                                                                                    • Under-35s most open to low-alcohol beer
                                                                                                                                                                                                                                                    • Attitudes towards Beer

                                                                                                                                                                                                                                                      • Pros and cons of smaller formats
                                                                                                                                                                                                                                                        • Craft brands have helped to make the 330ml can trendy
                                                                                                                                                                                                                                                          • Figure 48: Attitudes towards beer, September 2016
                                                                                                                                                                                                                                                        • Providing details on hops can boost quality perceptions…
                                                                                                                                                                                                                                                          • …with unique yeasts also offering opportunities
                                                                                                                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                                              • Abbreviations
                                                                                                                                                                                                                                                                • Consumer research methodology
                                                                                                                                                                                                                                                                  • Forecast Methodology
                                                                                                                                                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                                                                                                                                                      • Figure 49: Best- and worst-case forecasts for the total beer market, by value, 2016-21
                                                                                                                                                                                                                                                                      • Figure 50: Best- and worst-case forecasts for the total beer market, by volume, 2016-21
                                                                                                                                                                                                                                                                      • Figure 51: Best- and worst-case forecasts for the total lager market, by value, 2016-21
                                                                                                                                                                                                                                                                      • Figure 52: Best- and worst-case forecasts for the total lager market, by volume, 2016-21
                                                                                                                                                                                                                                                                      • Figure 53: Forecast of UK value sales of lager, 2011-21
                                                                                                                                                                                                                                                                      • Figure 54: Forecast of UK volume sales of lager, 2011-21
                                                                                                                                                                                                                                                                      • Figure 55: Best- and worst-case forecasts for the total ale/bitter market, by value, 2016-21
                                                                                                                                                                                                                                                                      • Figure 56: Best- and worst-case forecasts for the total ale/bitter market, by volume, 2016-21
                                                                                                                                                                                                                                                                      • Figure 57: Forecast of UK value sales of ale/bitter, 2011-21
                                                                                                                                                                                                                                                                      • Figure 58: Forecast of UK volume sales of ale/bitter, 2011-21
                                                                                                                                                                                                                                                                      • Figure 59: Best- and worst-case forecasts for the total stout/porter market, by value, 2016-21
                                                                                                                                                                                                                                                                      • Figure 60: Best- and worst-case forecasts for the total stout/porter market, by volume, 2016-21
                                                                                                                                                                                                                                                                      • Figure 61: Forecast of UK value sales of stout/porter, 2011-21
                                                                                                                                                                                                                                                                      • Figure 62: Forecast of UK volume sales of stout/porter, 2011-21

                                                                                                                                                                                                                                                                  Companies Covered

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                                                                                                                                                                                                                                                                  Beer - UK - December 2016

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