“The rise and rise of craft and cask beers…”

By Mark Newton, Client Relations, CGA Strategy Limited

Two of the biggest news stories in the drinks industry over the last few months have been the purchase of Sharps Brewery by Coors-Molson and the American craft brewer Goose Island by AB-InBev.

Not only is this good news for the two smaller companies from a financial perspective, but this gives two of the biggest names in the brewing world an important foothold in one of the most important sectors of the GB LAD market at the moment.

Although in some ways cask and craft beers are different products they are linked by a shared philosophy and customer demographic that, combined with the rise in interest in traditionally made, high quality long drinks, has made them an attractive proposition to UK producers and retailers alike.

The fact that the two major players involved are both primarily lager producers, shows how far the cask and craft revival has come over the last couple of years. This is backed up by CGA trended category data.

Cask Ale, World and Speciality Lagers (which includes a number of US craft beers) are the categories experiencing growth in consumption, while Standard Lagers are reporting the highest losses over the short term.

This is also translating into category space in the outlet, especially on the bar, with cask ale (along with cider) continuing to erode the position of traditional category favourites such as standard lager – Carling, Fosters, etc.

The average bar has added 2 incremental taps since 2008. Stout & Keg Ale are the only categories not to have benefitted from additional visibility but it is undoubtedly Cask Ale (along with cider) which have been the largest beneficiaries of the trend.

However, it is interesting to note that creating a nationwide brand from a regional or niche category base is not without its difficulties. National brewers have exhibited similar acquisition behaviour in the past and this has not always resulted in the sustained success expected. The larger regional brewers – such as Greene King, Marston’s and Fullers - are themselves creating almost ‘national’ brands from their core products, such as Pedigree and London Pride, and this has helped to create a divide between commercially led mainstream ales and the micro brewery products which continue to be successful as much because of their niche positioning as their quality.

The fact that the major brewers have now latched onto this increasing trend, suggests that we will continue to see further growth within this sector for the next few years. Hopefully this will offer a greater selection of choice to customers over a wider range of outlets than ever before.