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Breathing Life Back into the UK Beer and Cider Industry
Following a challenging 2013 where beer volume sales fell around 5% YoY, beer manufacturers can look to 2014 with optimism. The year of the FIFA World Cup in Brazil will inevitably offer some respite from declining sales, but how can the big beer brands get ahead of the game and lay the foundations for growth in 2015 and beyond? I’ve taken a look at how some of the leading beer brands are tackling the challenge.
Embracing the trend towards lighter drinking
The downturn in UK beer sales has partially been explained by a trend where younger consumers are drinking less alcohol than previous generations. Recent findings by the National Health Service Statistics found that only 48% of 16-26 year olds claimed to have drunk alcohol in the last week compared to a whopping 71% back in 1998. While this could be happening for a whole plethora of reasons, what is clear is that the younger generation of today is drinking less.
While most of the leading alcohol brands are steadfast advocates of responsible drinking (not least for the purpose of keeping on the good side of government regulations), Heineken have taken this to the next level in their ‘Heineken Sunrise’ (by Publicis, Milan) advertising campaign, with this at the heart of their message. On the surface, encouraging consumers to drink less may seem like a case of Heineken shooting themselves in the foot, but closer inspection shows this to be a thoroughly considered, mature and altogether forward thinking strategy. Through this advertising campaign, Heineken are branding themselves as the beer to drink when you don’t want to spoil the fun by getting drunk. Heineken are supplementing this message by extending their low ABV offering, and predict this market could be worth as much as £600m in the next 10 years. With the rise of the lighter social drinking occasion, Heineken seem well placed to take advantage of this trend towards lighter drinking, and following YoY sales growth of over £44m (in the context of a declining beer market), we should expect to see their market share continue to rise in 2014.
Creating more meaningful brands
2013 was the high-tide of the light hearted, laddish, beer advert. The formula whereby a group of young (in mind if not in body) 25-30 something’s bond through achieving a trivial task has been done to death, and 2014 promises to offer advertising with more substance.
While there is a strong rationale for using a light hearted advertising tone in order to drive saliency, Guinness’s most recent TV ad (‘Wheelchair Basketball’ by BBDO New York) has justifiably caught the eye for completely different reasons. While the central idea is the same, an ad built around a group of friends bonding, the tone is altogether more meaningful, and connects with the audience on another level. Having shown others how it can be done, it remains to be seen how marketing teams up and down the country will respond to this campaign in 2014.
Experience enhancing innovation
2013 NPD saw the leading beer companies focus their attention on pushing, or in some cases launching, cider line extensions. With the cider market increasingly saturated NPD managers are looking for other ways to extend their offering, and better meet consumer demand. So, where next for the beer and cider category?
Two trends look set to continue in 2014, firstly, the rise of the flavour ‘twist’, such as Fosters Radler or Strongbow Dark Fruit. Research shows that consumers enjoy trying out new drinks, and plans are surely in place for further line extensions in 2014. Getting the right blend can be a tricky process, especially when NPD managers are deliberately seeking to push the boundaries. Strong research can take the risk element out of such decision making, and NPD testing is proven to be money well spent when the product hits the market. What is clear is that this is a lucrative avenue, and we should expect to see some new and exciting flavour twists hitting the bars and supermarket shelves in 2014.
A second NPD trend we should expect to see continued is the emphasis on the ‘theatre’ of drinking. Packaging and pack design has a key role to play in this. Whether this be the likes of the Molson Coors ‘Damme Cold’ functionality delivering a bit of theatre in the off-trade drinking occasion, Stella Artois’s attention to detail when creating the perfect head when pouring a pint on tap in a bar, or Heineken’s in home drafts which deliver the bar experience from the comfort of the home. One thing is for sure, beer brands will need to innovate to satisfy consumers increasing expectations towards brand experience.
While 2014 offers the beer and cider brands a chance to regroup, exactly who will make the most of this opportunity remains to be seen.