New frontiers for world beer
World lager is flying off shelves, outperforming all other beer categories and emerging as the star performer.
It is up 11.2% in both value and volume, while the rest of lager is up by just 2.8% in volume and 0.8% in value (IRI, year to January 31).
World lager is even outgrowing the previously untouchable premium bottled ale category, which grew just 7.2% in value and 5.9% in volume in the same period.
“The beer market is interesting again and the demand for world beer is growing,” says Ben Turner, customer marketing manager at Kopparberg, which has just released Swedish lager Fagerhult into the UK market and will soon follow it up with a lager called Höga Kusten.
The fruit cider supplier feels the time is now right to bring these lagers over to the UK, inspired by the performance of SAB Miller, which has reported sales growth of 11% driven by a burgeoning range of world beers including Peroni, Pilsner Urquell and Tyskie.
Defining exactly what world lager means is a minefield, leading to various spats between producers. Research firm Nielsen told OLN it shifts its definition of world beer depending on what each client specifies, but for its internal purposes has come up with this definition: “Beers that have a perceived heritage outside the UK, primarily sold in bottles with a four or six-pack in play and at a price index of around 120 or higher versus total beer.”
Subjectivity arises around the “perceived heritage”, as many lagers are brewed in the UK but have a heritage from Germany, Denmark, Spain or Japan, while other mainstream lagers that have international heritage – such as Carlsberg or Foster’s – do not feature in the world beers category.
“Some of the big brewers seem to change the definition of world lager every year so it’s hard to keep up,” says Graham Archibald, national account director at Alhambra and Krombacher supplier Morgenrot. “For me, a world lager has always been one which is brewed at source in its homeland. Brewed under licence just doesn’t cut it for me as I think beers lose quality and their identity.
“Many consumers feel the same, which is why many are moving away from these beers in favour of lagers with real provenance, authenticity and quality.”
Archibald echoes the sentiments of Budvar and a host of other smaller producers that export beers for sale in the UK market.
But Heineken, which brews its lagers in the UK for the UK market, disagrees and argues that as long as the beers are brewed to the same recipe that they are brewed to in their original countries there isn’t a consumer problem.
Trade marketing director Craig Clarkson says: “If you’re talking about the world beer category, it’s beers that have been imported from abroad but also beers that have provenance in a different culture.
“World beer doesn’t mean the same as imported beer. What matters most is that the quality has to be perfect.”
Regardless of the difference in opinion between suppliers, the key to understanding the category could be the manner in which the beers are sold, as Nielsen and IRI point to brands primarily sold in bottles and small packs.
The likes of Stella, Carlsberg and Foster’s are often sold in cans and frequently come in large multipacks, so ignore them, then scrap all British beers, and you are left with the nebulous world beer category.
The figures are far from murky though, and retailers can cash in as these bottled beers are sold at a considerable premium to mainstream lager.
“More and more consumers are looking for something a bit different when buying from convenience stores. Therefore a unique range of premium world lagers can certainly help to attract footfall,” says Archibald. “Our Spanish brand Alhambra always performs strongly in the summer with consumers searching for products they’ve tried in tapas bars at home and abroad.
“The brand, which has seen double-digit year-on-year growth for the past three years, is also benefiting from the Spanish food and drink trend in the UK.”
Another brand benefiting from its links to food is Halewood’s Tsingtao.
James Wright, head of agency brands, says: “The appeal of world beer is experimentalism and moving beyond mainstream lagers.
“Consumers want high quality, genuine imported bottled beers, but are increasingly placing importance on traceability and natural ingredients.
“Tsingtao’s taste profile works especially well with spicy food, chicken and fish dishes, making it a perfect choice to have alongside food from China and all over east Asia.
“As the take-home channels continue to thrive, promotional activities such as food-matching become even more necessary to keep up with consumers’ changing drinking habits.”
These premium bottles of beer flooding the UK market from around the world could go on to enjoy even greater success in 2015. The sun is shining and we’re set for a spring dominated by beer and barbecues, while deals on slabs of canned lager are unlikely to be as prevalent this summer with no major football tournament to drive volume.
Retailers can fight to keep the lager category in rude health by driving value and championing world lagers.
Carling-loving England fans may even be tempted to trade up to a bottled lager with a “perceived” heritage in a rival footballing country, such as Morgenrot’s Argentinian beer Quilmes or Germany’s Krombacher.
“A summer scorcher can present a fantastic sales opportunity so retailers must be looking to take advantage,” says Archibald. “Lager is a key volume driver in summer but it can also be a terrific value driver if you select the right brands which excite, intrigue and tempt consumers to trade up.”