Why the price isn't right…

For any other premium product you would expect to pay a premium price, yet people still expect cask beer to be cheaper than lager. So how do you convince them that quality costs? Adam Withrington reports.

When you look at it, it's quite a simple argument. If a car is made using more expensive parts and a more expensive production method (e.g. by hand) then the car will cost more to buy than a mass-produced model. Because a car is more expensive and takes longer to produce it stands to reason that it will be in shorter supply than the mass-produced model - another reason why it will cost more.

This model applies across the board in all industries. Look at organic foods - always more expensive. And yet there is one market where this simply does not apply: the beer market.

Compared to most lagers produced in the UK, cask beer uses more expensive ingredients, takes longer to brew and there is less of it available - 13.1 per cent of all beer sold in the on-trade is cask beer, according to recent figures issued by the Society of Independent Brewers. And yet when you walk into a pub you will find almost every time that it costs less than lager.

With wine, those wines that are produced more cheaply and are more widely available cost less than those that are more specialist. Ask yourself why Champagne is more expensive than Chardonnay. Again, this just does not apply with cask beer.

Many cask ale brewers are getting fed up of putting so much time and effort into crafting a perfect cask beer and seeing it priced under a standard lager in the bar.

The price rise problem​

The reaction to this from many brewers has been a call to increase the price of cask beer. This issue has become a bona fide "hot topic". Only last month, The Publican's Cask 2004​ supplement contained two features on this subject.

But, sadly, simply whacking 40 to 60p on a pint is not the answer. Can you imagine the reaction from consumers? Die-hard CAMRA members would do the unthinkable and choke on their pints - not good for quality.

The problem is that, culturally, cask beer has always been a cheap and cheerful preserve - it is the drink of the working man - something miners would quaff after a long day in the pit. It has always been cheaper than lager and why should that change now?

As a result, retailers are sceptical about any potential price rises. Adam Martin, marketing director at managed pub company Mitchells & Butlers (M&B), believes adding to the price is the wrong approach to take.

"The idea that a price needs to be higher to protect an industry is just madness," he comments. "There are people who have this rose-tinted perspective on the beer industry and they have this belief that somehow the British economy owes them. At the end of the day the consumer decides what they will buy and when. It is not up to producers and it is not up to us."

Adam points out that M&B has really made a commitment to cask beer, through it recent decision to put 97 regional beers on its bars across the country. However, he does not believe that focusing on price is the answer.

"People buy a lot of Timothy Taylor's Landlord, which is comparatively expensive, and yet they also buy a lot of Shepherd Neame's Spitfire from Wetherspoon's, which is very reasonably priced," he adds. "If the cask ale market is declining then there are still some cask beers that are doing remarkably well - now why is that? The way they are being marketed?"

However, for many brewers of cask beer the problem with pricing is not a matter of how much it costs per se, but, as suggested earlier, how it costs in relation to other products on the bar.

John Roberts, head of brewing and brands at Fuller's, says: "There is an irony that the beers that are carefully crafted with relatively expensive ingredients and take a long time to brew are sold at a lower price than brands that are mass-produced with economies of scale. In any other market, be it food and drink or even cars, the hand-crafted product would sell at a higher price. Not in the beer market."

Why is lager more expensive?​

John believes it is about a change of mindset. "The problem is we have not moved on from the 1960s when lager first came onto the market. Then it was priced as an exotic foreign product and we still haven't moved away from that legacy."

Many lagers, particularly those available on the mass market, while produced to a high level of quality, are made comparatively cheaply. A visit to the Marston's brewery in Burton-upon-Trent can give a vivid demonstration of just how much time and money a cask beer brewer is willing to put into the process (see below).

However, despite all of this, consumer perception is such that they expect to walk into a pub and find the price of a pint of bitter to be 40p cheaper than a pint of lager.

But cask brewers argue that it does not make sense to have beers such as Greene King IPA or Fuller's London Pride on the bar at a cheaper price than say Foster's, Carling or Carlsberg. These are not exotic foreign-produced lagers.

They are all brewed in the UK and have similar ABVs to the aforementioned cask beers. So why are they not priced at the same level?

John believes it has a lot to do with quality. "The cask industry is so dependent on quality - if there is a quality risk with cask people won't buy it," he points out.

Rupert Thompson, chief executive of Refresh UK, believes there needs to be greater investment in cask beer. "Investment is needed to introduce good quality dispense equipment and in training to improve quality. The whole area requires a mindset towards investment," he says.

He argues that if this is introduced and consumers and retailers alike begin to see consistency in the quality of cask beer then there could be a small 3-5p increase over time. "It would be a gradual process," adds Rupert.

Adding value​

The important factor is adding value to the product. Fuller's brewery has recently relaunched its ESB beer and, according to John, the hopping process has changed and production time has increased from two to four weeks. This will add to the cost of production and is not the first step a business might take if its only objective is to shift volume. But it does add value to ESB.

Rupert says the mood among many cask beer brewers is such that they are prepared to sacrifice volume if it leads to an increase in the quality of cask ale and its popularity among consumers. "That fact is a pretty telling one," he says.

Getting your cask offer right is so important because it is cask beer alone that can attract people to your pub, as Rupert explains.

"Cask beer is the central product that governs pub-goers' behaviour. Drinkers know that a lager brand will pretty much taste as they expect it to wherever they go.

"However, if there is one cask ale drinker in the group he or she will influence where that group goes - i.e. to a pub where they know the quality of cask beer is good."

Making the most of the USP​

You cannot avoid the fact that cask beer is not available in the take-home market. It is, to use a marketing phrase, a USP - a unique selling point for pubs. The reality is that consumers are not going to argue about the price of a product if the quality is good enough. The success of Timothy Taylor's Landlord and Fuller's London Pride in city centre pubs, where prices are higher, is proof of that.

So is the success of bottled real ale in the take-home market. Recent figures from Tesco showed that bottled ale sales were through the roof - and the supermarkets' pricing strategy is in complete