World class chance for lager
For years lager has been in the doldrums, cast as a villain by health lobbyists and Daily Mail columnists decrying “booze Britain”, a tasteless dullard by ale aficionados and a great disappointment by retailers watching annual sales continuously dwindle.
But in 2014 it looks set to be the comeback kid. The category is showing growth for the first time since the recession began, up 1.9% in volume and 3% in value to £3 billion (IRI, year to March 1).
And a stroll through any supermarket or convenience store suggests the upward march is set to continue. Retailers are in the throes of World Cup fever, having decked their stores with a kaleidoscope of bunting and assorted football paraphernalia and crammed their shelves full of lager.
During the 2010 World Cup beer and cider sales were 34% higher than average (IRI, four weeks to July 2, 2010) and lager was the main driver, according to IRI analyst Steve Jones.
Retailers have taken note and cans, bottles, kegs and crates of lager are currently all over stores like a rash.
“The World Cup is a key trading period for our network of franchisee- owned stores, and we have developed and promoted a strong range of deals that we believe will drive footfall,” says Matt Cain, senior beer & cider buyer for Bargain Booze.
“We know that consumers prefer to stock up ahead of the matches, so we’ve already launched promotions on bulk deals of popular products, such as 20x30cl bottles of Budweiser for £12, to help our stores capture the interest of these shoppers early on.
“During the World Cup, research has shown us that football fans are more likely to impulse-buy a smaller pack to drink while watching a match.
“They go to Bargain Booze because they can guarantee they’ll be able to purchase cold beers, and this provides a major advantage for our stores over the supermarkets. Offers designed to appeal to these shoppers include 4x44cl cans of Stella Artois 4% for £2.99.”
Bargain Booze is promoting its key deals via national TV ads that feature a sports presenter interviewing a football manager about the deals.
Supermarkets are fighting back with a range of aggressive promotions on multipacks: Asda is selling 36 cans of Carling for £20 and 20 cans of Foster’s for £13, while Tesco has 18 cans of Stella for £12.
Some multiple grocers are even going into battle with convenience stores by teaming up with AB-Inbev to offer shoppers chilled crates of Budweiser on match days.
During the World Cup, research has shown us that football fans are more likely to impulse-buy a smaller pack to drink while watching a match official beer sponsor and UK marketing manager Jennifer Anton, who has invested in a range of ads, says: “Retailers who are going to win at this World Cup have to get in there early. You want to be known as the destination for drinks during the tournament.
Budweiser has exclusive rights to the World Cup branding on its advertising, but fellow suppliers are fighting for a piece of the action. Carlsberg has ex-footballer Ian Wright fronting its TV ads, while Heineken has brought back Eric Cantona for more Kronenbourg 1664 ads, championing the hero hop farmers of Alsace.
“With football attracting such a diverse audience it can pay to stock a variety of leading national beer brands,” says Heineken category & trade marketing director Craig Clarkson. “The televised football opportunity will drive impulse purchases with consumers on a mission to top-up ahead of the game as more than 80% of World Cup watchers are expected to consume lager during the tournament.
“The classic Heineken bestsellers, such as Foster’s and Kronenbourg 1664, are always must-stocks due to shopper demand.”
The World Cup runs from June 12 to July 13, and by the time the final ball has been kicked in anger we should be deep into a prolonged heatwave that will run throughout the summer months, according to weathermen at Vantage Weather Systems.
In one heatwave last year (four weeks to July 13, 2013) lager grew 28% in volume.
“With total sales of £132.8 million over the two weeks to June 20, beer sales increased by 50%, contributing more additional revenue [to the FMCG market] than any other product, an extra £44.5 million,” says IRI analyst Helen Duxbury.
Then, if retailers can keep consumers buying in their droves in the run-up to Christmas, 2014 will be remembered as the year that lager returned to the glory days.
A spate of new craft lagers from ale heavyweights such as Marston’s, Greene King and Fuller’s has added credibility to the category.
This is boosted by the rising fortunes of flavoursome lagers from the likes of Meantime and a growing thirst for the craft US lagers of Brooklyn and Samuel Adams on this side of the pond.
So-called moderation lagers such as Foster’s Radler and Carling C2 may not be to everyone’s taste but their sales are soaring. Ditto spirit-infused lagers such as Desperados. This is all contributing to the category’s current rude health.
Lager is no longer just about piling slabs of beer high and wide and hoping consumers grab them. There is a range of strengths, pack sizes and flavour profiles to suit most occasions and a host of different tastes. Retailers are capitalising on these improvements, bolstering them with POS and promotions around key events such as the World Cup and watching sales boom.