Lager is facing strong competition from the rising popularity of ales and bitters, whose success has been fuelled by the craft beer boom, according to new research from market intelligence agency Mintel which reveals that 49% of Brits drank lager in 2015 [In the six months to October 2015], down from 54% in 2014 [six months to September 2014].
Mintel’s research also shows that consumers’ waning thirst for lager is affecting sales, with volume sales falling from 3.18 billion litres in 2014 to an estimated 3.15 billion litres in 2015. Overall, sales of lager have dropped by 8% over the past 5 years alone, down from 3.44 billion litres in 2010.
Yet whilst Britons are losing their love of lager, Mintel says: “It seems ‘hop-portunity’ knocks at ale’s door, helped along by the rise of craft beer and styles such as IPAs (Indian pale ales) in particular”. Brits are expected to have drank 913 million litres of ale and bitter in 2015, up from 895 million litres in 2014. Today, more than one quarter (27%) of Brits drink ale or bitter, whilst one in five (20%) drink any type of craft beer.
Mintel’s report also indicates that lager’s falling fortunes are having a detrimental effect on overall sales of beer. Brits are estimated to have consumed 4.25 billion litres of beer in 2015, down from 4.27 billion litres in 2014. Meanwhile, value sales growth has slowed, rising only slightly from £16.61 billion in 2014, to an estimated £16.68 billion in 2015. There are however signs of growth in 2016 and Mintel forecasts value sales to reach £18.1 billion by 2020.
Chris Wisson, senior drinks analyst at Mintel, said: “Lager sales have plateaued in recent years, however it could enhance its chances of growth by tapping into the craft beer movement more effectively. With the majority of craft beers available in both the on- and off-trade falling into the ale and bitter segment, these beers have garnered considerable coverage in recent years. Many craft brewers have prioritised ales, brewing variants such as pale ale, for example IPA and golden ale, in turn driving the popularity of premium bottled ales. Overall, the beer market should benefit from greater craft innovation, as well as sales uplifts from events such as the Olympic Games and UEFA Euro 2016.”
Cost seems to be having an effect on the nation’s appetite for beer, with as many as one fifth (20%) of UK beer drinkers saying they are not willing to pay more than £2.99 for a pint. While three in 10 (29%) beer drinkers overall are prepared to pay more than £4 per pint, it’s Londoners who are more willing to open their wallets, with 27% willing to pay over £4.50.
“The steady rise in price over the past decade has given rise to consumer resistance, particularly when it comes to breaking the £4, and even £5, barriers. Brands asking consumers to pay more for beer need to provide clear reasons for doing so, for example via packaging or branded glassware, as well as delivering a discernibly superior taste to cheaper mainstream alternatives.” Wisson concluded.