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Beer

Tap into beer 'churn' as big brands lose hold

By Nicholas Robinson+

14-Jul-2016
Last updated on 15-Jul-2016 at 10:02 GMT2016-07-15T10:02:19Z

More brewers in the UK is better for pubs and customers
More brewers in the UK is better for pubs and customers

Pubs are taking advantage of the exploding craft and premium beer markets, as mainstream leading brands continue to lose market share.

That’s according to Steve Holt, managing director of vertical drinks for German brewer Veltins, who said the boom in beer choice was good for the trade and customers.

Beer sales in pubs have dipped in the past 10 years as consumers make fewer visits to the pub and switch to other drinks, such as wine and spirits. Yet, that decline has slowed recently as the craft beer revolution continues to increase its grip on drinkers.

In the first quarter of this year, on-trade beer sales hit their slowest rate of decline in more than a decade and fell by just 0.2%, according to the British Beer and Pub Association’s latest Beer Barometer.

Demanding more choice

Find out below: How German beer impacts UK on-trade

“Consumers are demanding more choice and you’re [operators] are faced with a whole range of beer taps, bottled and canned products,” explained Holt.

The increasing number of beer breweries operating in the UK had helped make the market more interesting and would also see beer sales in the on-trade grow by a predicted 1%, he added.

“We have got a flat beer market in the UK at the moment, but the market for craft and premium beer is increasing and we have real growth in those sectors.”

Mainstream beers, such as Fosters, Carling and Stella, were starting to move into craft beers, while maintaining their flagship brands as “cash cows”, he added.

“For example, AB InBev’s Pioneer craft arm, which is going to launch its 70 craft beers to the market.”

This explosion in choice would result in more beer churn – high turnover of different beers – in pubs, making them a bigger attraction for curious customers, said Holt. Higher beer churn could also mean fewer bars would consistently stock one brand.

Between premium and craft

The rise of craft would also see premium brands, such as Veltins, attempt to place themselves between premium and craft, Holt claimed.

“There’s so much opportunity there and the question is, ‘how does a brand like Veltins find its space in a vast, changing market?’.

“You could say that Veltins sits in the middle of craft and big brands, which could be a dangerous place to be, but it's a perfect position because people come in for craft and stay for beers like pilsners.”

Meanwhile, learn how the German beer sector is impacting the UK on-trade in an exclusive video interview with Holt.

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