What's next for brewers when premium lagers become mainstream?

With premium lagers becoming mainstream, brewers have recognised a demand for newer speciality beers. Ben McFarland reports

It's been several years since Interbrew decided to introduce Hoegaarden into the UK on-trade and looking back, albeit armed with the trusty benefit of hindsight, it was a pretty shrewd move.

At the time of its introduction beer wasn't doing particularly well. In fact, beer sales had gone through the floor and brewers were scratching their heads trying to work out ways of stemming the decline.

After the failure of gimmicky concepts such as "dry" and "ice" beers and at a time when cask ale was struggling, few would have predicted that within a few years a strange looking cloudy wheat beer from Belgium, priced way above its competitors, would be such a soaraway success.

Whether it was good fortune or astute thinking by those crafty Belgians remains unclear, but the introduction of Hoegaarden coincided with a noticeable shift in drinking trends among UK consumers.

While the lager versus bitter debate from the 1980s continued among the over-35-year-old beer drinkers, a new generation of younger drinkers without the price sensitivity of the previous generation were spearheading the emergence of what those marketing folk refer to as "repertoire drinking".

Rather than remaining unwaveringly loyal to one particular brand or strength of beer, this meant consumers were picking and choosing from a wide range of drinks and were becoming increasingly aware of what strength beer they were drinking and how much they could handle.

At the same time this was happening, the face of city centre drinking was being transformed with retailers replacing traditional pubs with style bars characterised by funky fittings, leather armchairs and subtle lighting. This revolution in design and the change in consumer drinking habits precipitated the rise of premium lagers (generally considered 4.2 per cent ABV and above) at the expense of lagers like Carling and Foster's.

In 1994, premium lagers such as Stella Artois and Kronenbourg 1664 only represented 28 per cent of the market but by 1999 this share had grown to 38 per cent.

Sales of mainstream lagers continued to fall during this period and, two years on, premium lagers have become mainstream and now command a 49.1 per cent stake of overall beer sales.

But now, those same people who spearheaded this change are getting itchy feet and are looking for something different. Lager drinkers are now switching from premium brands to more complicated speciality beers, of which Hoegaarden is the best established.

Genuinely imported beers are also gaining a following among ale drinkers who would not feel comfortable drinking a Stella - brewed in this country under licence.

Although the demand for quality beers is unlikely to awaken volume beer sales from its 30-year slumber, what is does do is raise the profile of the beer market in the UK at a time when it is under fire from, among others, wine, premium packaged spirits and critics accusing the industry of a "lack of innovation".

The Dutch brewer Heineken has made its first foray into the UK premium speciality beer market with the launch of Affligem Blonde, a six per cent ABV abbey beer, and Wieckse Witte, a five per cent Dutch white beer in a similar mould to Hoegaarden.

Nick Holmes of Heineken Special Beers said: "Overall, the beer market has been declining for at least 10 years but there has been two growth areas - premium and speciality beers. In Belgium, speciality beer commands 30 per cent of the market and we believe that can be replicated over here and that products like Affligem and Wieckse Witte have a very bright future.

"People are now choosing to drink different beer depending on mood, drinking occasion and time of day, and the beer market needs to keep pace with these trends."

The UK distribution and marketing of the Affligem and Wieckse Witte brands has been entrusted to Turnkey Drinks, a company founded last year by John Emerson and Dick Humphries, who played a significant role in the UK brand development of Hoegaarden and Leffe in the 1990s.

"Six per cent will become the new marker for premium beers now that one well-known 5.2 per cent lager scarcely constitutes premium lager," added John Emerson.

"Consumers are looking for less volume and more taste and we feel these products will define the category for years to come."

This fact has not been lost on other major brewers and over the last few months there has been an influx of niche speciality beers complete with their fancy fonts and groovy glasses.

Refresh UK, for instance, recently decided to replace Löwenbräu Premium, brewed in the UK, with the stronger and more authentic Löwenbräu Original imported direct from Munich.

Meanwhile, Carlsberg-Tetley (C-T) has raided the portfolio of its Danish parent company Carlsberg AS and launched a premium European beer guest programme.

Borrowing an idea usually reserved for traditional cask ale, more than half-a-dozen premium beers, hailing from Portugal to Russia, are set to be introduced into 150 style bar outlets and young person's venues on a rotational monthly basis.

C-T has also introduced a stylish chrome tap that allows licensees to change the badge on a monthly basis and supplies a range of "Beers of the World" merchandise, including branded glasses and bespoke point-of-sale. The brewer hopes to roll out the scheme into more than 500 outlets in the new year.

Colin Cordy, customer planning director for C-T, said: "With brand portfolios in 17 countries worldwide, we realised that being part of Carlsberg AS gave us the opportunity to offer something a bit different and that with more people travelling now, there is greater awareness of beers from around the world.

"The response from the trade has been extremely positive and we may discover a beer that produces huge consumer interest and either bring it back or make it a permanent addition to our brand portfolio, but that's not been our main objective."

Earlier this year Bass Brewers expanded its Grolsch brand with the introduction of a range of seasonal bottled brands. Following their success, other options that are under consideration include the Dutch tradition of introducing a new Grolsch beer on an annual basis, as part of the brewer's Beer Reverence campaign.

Every year in Holland, Grolsch brews a new beer called Proeftijd and releases it onto the market with a questionnaire asking the consumer for their advice and opinions on the beer's taste. The feedback is taken into consideration and the beer is tweaked accordingly, and then re-launched back into the market.

"It's not marketing led, it has genuine demand and five years ago we would never have dreamed about doing this but there is so much more consumer experimentation going on at the moment," said Bass Brewers' Ian Ward.

"We need to start planting the seeds and get people talking about beers more."

If and when the widely predicted long-term recession begins, many expect the speciality beer market, consisting of beers rarely priced below £2.50, to struggle when belts are tightened and sorrows need to be drowned as cheaply as possible.

Ian disagrees. "Premium lager is not marketing or price driven, it is a genuine demand," he said.

"Consumers today see premium beers as an everyday part of their life and it's no longer considered a luxury."

One brewer that has held back is Scottish Courage.

Following its takeover of Alken Maes and the Brasseries Kronenbourg last year, it has so far resisted the temptation to ransack its newly acquired range of European beers save for the relatively low-key launch of Grimbergen Blonde, 6.7 per cent ABV, and Grimbergen Double, a dark beer with a 6.5 per cent