Mark Ludmon examines trends in premium packaged lager in the on-trade, including the growth in cans and low-alcohol options
At Sketch members’ bar and restaurant in London’s West End, the range of beers on offer matches the quality of the cocktails and premium spirits. They range from Peroni Nastro Azzurro and Pilsner Urquell to Duvell and Saint but nowhere across the venue’s four bars will you see a font, bottle or branded glass. “We don’t like to have any branded glassware or bottles in the bar,” explains assistant bar manager Mehdi Ichedadene. “Peroni is the most popular beer here but we don’t have to push it.”
As with a lot of cocktail bars, Sketch has no beers on draught, which is where packaged beers come into their own. “Top-end accounts won’t have draught and will only do bottled, and they will often be very tight for fridge space for beer,” says Sam Rhodes, director of customer marketing at Miller Brands, whose beers include Peroni and Pilsner Urquell. “If there is limited fridge space, bar owners should prioritise and stock world beers such as Peroni Nastro Azzurro which bring a number of advantages including flexibility and strong profit margins, as they provide bar staff with the opportunity to encourage consumers to trade up.”
Miller Brands helps its accounts by “mapping” the different drinkers for the variety of beers on the market as well as providing training for bar staff. “It is all about width, not depth,” Sam says. “With only five to six brands to range, a bar needs to appeal to a wide selection of occasions and consumer needs. Don’t range multiple brands that have heavily overlapping brand profiles.”
Peroni can be found in top-end venues from China Tang at The Dorchester and Soho House Group to PlayGround at the Liverpool Hilton and is the only beer available at the five bars at London members’ club No 5 Cavendish Square (see panel). Bottles account for 31 per cent of beer sales in the on-trade, according to figures from CGA Strategy, with “world beer” growing last year by nearly 15 per cent – over five times faster than the total lager category. “World beers command a higher price point because consumers are willing to pay more for drinks with perceived authenticity and provenance,” Sam at Miller Brands adds.
Bottled beers allow bars to tap into the thirst for premium and craft ales when demand is not enough to invest in cask. “If a bar is unable to offer a large number of ales on handpull due to throughput, then they are likely to stock bottled beers,” says Paul Sullivan, sales and marketing director at Wadworth whose bottled ales include 6X, Swordfish, Horizon and Bishops Tipple. “When it comes to ale, quality is everything and, while busy pubs can offer a large number of draught beers, smaller bars, clubs and restaurants that may want to sell a mainstream ale are better off with bottles to maintain this quality.” He adds that bottling its seasonal beers such as Old Timer means they can be offered out of season.
Wadworth has developed The Beer Kitchen range because of growing interest in exploring premium beers with food. “There is a real opportunity to steal some shelf space with interesting small-format ales that can compete with wine, which is starting to look a little expensive,” Paul explains. The range includes a whisky barrel-aged bitter, orange peel beer, wheat beer, IPA and Espresso Stout, in 330ml bottles. “Small-format premium beers that are not too filling and can work with food are perfect as a quality offering in a number of bars and restaurants where a complete pint from a bottle would not carry the same cachet.”
American-sized bottles, normally containing 355ml, are well suited to the growing demand for food and beer pairing in pubs and bars, says Graham Richardson, general manager of Heathwick, which imports Fordham and Old Dominion beers from Delaware. “It’s an ideal size for customers to experience the taste without overdoing it,” he explains. “Bottle sales mean pub and restaurant owners can pair each meal with a different beer. For example, IPAs are great with poultry, pan-Asian food or burgers and stouts fair well with chocolate or rich fruity puds.”
Food and beer matching is gaining in popularity but should only be done if staff know what they are talking about, says Jeremy Houston, national account manager at brewing company Innis & Gunn. “Staff training is absolutely key here because front-of-house teams are the ones with the direct customer contact. If they can’t sell the match with confidence and conviction then the consumer is less likely to trust it.”
Jeremy says bottled craft beers are “really striding ahead”, providing more scope for bars to rotate their selection. Innis & Gunn is very selective about which outlets can stock its draught beer but supplies more pubs and bars with bottled ales such as Innis & Gunn Original – although these are still carefully chosen. “Our strategy has been to seek out establishments that best suit the brand where consumers are interested in new taste experiences and happy to pay a premium for better-quality products,” he explains. “Bars with good rate of sale on packaged Innis & Gunn are being moved on to draught, and this tactic is working well for us.”
The bar sector will be crucial to the continuing growth of bottled beers in 2013, says Graham Archibald, national account director for The Morgenrot Group which imports beers such as Quilmes from Argentina and Sleeman from Canada. “With many of the predominantly cocktail bars now seeing the benefits of attracting the adventurous beer drinker but not wanting the hassle of draught, unique bottled beers with stylish packaging such as Alhambra Reserva or Mort Subite Kriek have a fantastic opportunity to grow in the sector,” he says. This year will see Morgenrot continue promoting its portfolio in the on-trade, including events and training for Belgian abbey beer Affligem.
He adds that demand in the on-trade has been “incredible” for 330ml cans of the Alhambra range from Spain that have been introduced alongside the bottles and draught. “I can’t see it happening across the board but cans have definitely had an on-trade resurgence, especially in funky bars and particularly in fashionable areas around London. They have that retro vibe to them and offer bars a valuable point of difference, especially as we are not seeing mainstream brands take this route.”
While Red Stripe has long been popular in cans in late-night venues, there has been a new wave of canned premium beers launching in the UK on-trade such as Hobo from the Czech Republic through Cask Liquid Marketing. The trend has come from the American craft beer scene where cans are common, says Mike Watson of beer importer James Clay. “Cans protect beer from light, and light is the enemy of beer as it causes ‘skunking’. It also forms a better seal to oxygen, another enemy of beer, keeping it fresher for longer.”
Mike says that cans are also lighter and well suited to busy bars where space is tight and also provide stand-out in a fridge, especially as they are often in brightly coloured packaging. James Clay supplies beers such as Brooklyn Lager, Brooklyn EIPA, Flying Dog Underdog, Flying Dog Snake Dog, Vedett Blonde and Früh Kölsch in cans. “We are actively seeking to expand this at the moment as demand is continually growing,” Mike adds. “Some people may think cans are downmarket but we’re here to change that perception.”
The newest trend in packaged beers in the UK is what the marketers call “moderation” – low-alcohol beers that provide an alternative to soft drinks. This month will see the introduction of Foster’s Radler at two per cent ABV, which is lager blended with natural lemon juice, as well as the launch of Carlsberg Citrus, which has an ABV of 2.8 per cent and is blended with natural Persian and Key limes. “The lower-strength beer category is growing 50 per cent year on year so it makes perfect sense to develop a beer that will support our customers with a beer their consumers want,” explains David Scott, director of marketing for Carlsberg UK. “We have responded to consumer trends and developed a lager which consumers really do find refreshing and appealing.”
Improvements in quality and choice mean that British consumers are now considering low- and non-alcoholic beers, especially because of their lower calorie content, according to Mike Teague, UK managing director for Dutch beer Bavaria. “In the past, cutting back on beer meant sugary, sweet-tasting alternatives, often loaded with calories. This ensured a drop in units of alcohol consumed, but not a drop in calories. Our alcohol-free beers obviously contain no units of alcohol and possess only around 80 calories per bottle.”
Marketing activities by Bavaria, including sponsoring comedy on ITV, is raising the profile of its beers with ABV of zero and 2.8 per cent. “As the quality of the latest low- and non-alcoholic beers attracts more attention, it is hoped that bars, pubs and restaurants will begin offering their customers even greater choice for those seeking alternatives to soft drinks,” Mike says.
Case study: No 5 Cavendish Square
Two years ago, members club No 5 Cavendish Square in London’s West End replaced its beer range with just one brand: Peroni Nastro Azzurro. “We chose it because it is what people are asking for and it’s always in top-end bars and clubs rather than every pub,” explains the venue’s manager Suresh Gurung. Distributor Miller Brands has also provided training and other support for the bar, including a stylish makeover of its roof terrace (pictured). Last year, it was one of the venues for the touring Opera Di Peroni activity where singers performed while guests enjoyed Peroni and aperitivo snacks.
Sam Rhodes, director of customer marketing at Miller Brands, says: “Places like No 5 Cavendish Square will never do a price promotion so it’s all about added value. We can add events to their calendar of activities that will surprise and delight their customers.”
Focus: Beers with spirit
A new sector within the bottled beer category is being created by the growing choice of spirit-flavoured beers, according to SHS Drinks. In January, it launched Dead Crow, a 5.5 per cent ABV bourbon-flavoured premium beer, and Cuvana, also at 5.5 per cent, with light rum and a hint of lime. Mark Hopper, head of innovation and development at SHS Drinks, says it follows the success of tequila-flavoured lager Desperados from Heineken UK which accounts for 96 per cent of the £49million spirit-flavoured beer sector. “The spirit-flavoured beer sector is very much in its infancy and it does present plenty of scope for development. It’s inevitable, therefore, that we will see a flood of imitators coming onto the market hoping to catch a ride on the crest of the wave, but experience shows that it is premium brands which offer true innovation, are first to market and have the support to drive consumer demand which will be the mainstay of the category.”
Amigos beer, flavoured with tequila and hints of South American limes, has been growing at 77 per cent in the on-trade, with major investment in advertising and on-trade point-of-sale support planned by Global Brands for March onwards. “Spirit beers represent a huge profit opportunity for licensees as they are driving growth into the beer category, which is currently declining at 3.3 per cent,” says marketing director Simon Green. “Consumers are turning to products which meet their need for new and exciting flavours and drinking experiences.”
Case study: Star Pubs & Bars
A new line-up of bottled beers was introduced at The Garratt (pictured) in central Manchester as part of a premium packaged lager support programme by pub company Star Pubs & Bars. Alongside cocktails, premium spirits and draught lagers, the bar now offers Heineken, Amstel, Tiger and Dos Equis in bottles, chosen to appeal to the demographic of office workers in the daytime and students in the evening. The pub’s lessee, Craig Lanigan, says: “I prefer the new range as the products aren’t run of the mill, they’re less available locally. In the past, we had to compete with the bar around the corner which sold cheap Becks, whereas customers aren’t comparing prices now.”
Star Pubs & Bars has also introduced a Discover World Beers programme, helping lessees to improve staff retailing skills and presentation and profitability of bottled beers with merchandising and promotional support. Star Pubs & Bars trading director Chris Moore says: “Pubs have been successful talking up cask ale and wine for years while premium packaged lagers tended to be left languishing on the shelf. Given the proper attention, sales and profitability can be improved. Where lessees have taken up our Discover World Beers programme, they have increased sell-through of beers which would result in an estimated £2,000 a year improvement to the bottom line.”
Case study: Czech mate for InnBrighton
Pubs within the 40-strong InnBrighton estate in London and Brighton are well known for their selection of craft beers, including the “temple to beer”, The North Laine gastropub and microbrewery in central Brighton. The company was the first in Brighton to add Krušovice Imperial and Krušovice Černé from the Czech Republic after the brand’s official launch last year, drawing on promotional and training support available through distributor SHS Drinks. “We are always looking out for beers that are a little bit different, so we jumped at the chance to stock Krušovice,” says InnBrighton chief executive David George. “Such has been the success that we are now making them available in all of our new outlets.”
Krušovice has also been taken up by other top bars such as Brompton Brands, operator of Mayfair bar Mahiki, and Mojo bars in Manchester, Liverpool and Leeds. “Consumers may be drinking less alcohol, but while they are consuming less in volume terms, they are looking to treat themselves when they do have a beer and this is one of the reasons the premium packaged lager category is performing so well,” says Audrey Schillings, senior brand manager at Krušovice’s owner Heineken. “Also, consumers’ knowledge and interest in the wide variety of beer styles and brands has broadened.”