Authenticity, not price, will drive sales

John Harley, CEO of Budweiser Budvar and co-founder of trade body No Fibs, the National Organisation for Foreign Imported Beers, believes the time is right to educate drinkers about where beers are from. Changing consumers' perceptions of beer is high on the agenda, but, encouragingly for licensees, Harley says the battle should not be won on price. "Traditionally, if pubs wanted to sell more beer they used to cut the price, but it's not the right way." Fellow No Fibs founders, Philip Parker from Ubevco, which distributes a number of imported beers, including Sol and Tiger, and Rob Marijnen, managing director of Heineken in the UK, agree. Parker adds: "It costs more to import beer but why don't retailers charge a premium price? Consumers are willing to pay anything from £2.50 upwards for a glass of wine so pubs could charge different prices for different beers." Marijnen takes this argument further by suggesting that buyers must treat imported beers separately from mainstream beers made in the UK. "When it comes to price negotiations, retailers have to understand our beers are more expensive because we're doing things differently" he says. But are pubs succeeding in appealing to consumers who are prepared to spend extra for a more premium experience? Steve Holt, managing director of Vertical Drinks is sceptical. "The on-trade has been slow to pick up on the opportunity. Supermarkets have led the way because in the aisle, consumers can pick up a bottle and read the label to understand what they are buying. You can't do that in a bar. Bars are good at attracting the right types of consumers who would like to drink imported beers, but aren't actually very good at supplying them." Although the on-trade's performance might have lagged behind supermarkets so far, brewers are pinning their hopes firmly on pubs for future growth. Colin Pedrick, MD of on-trade sales at Interbrew UK, says: "Interbrew has identified speciality beer as the beer category's key growth opportunity over the next decade. It predicts that the speciality beer sector will expand more than five-fold over the next decade to exceed sales of 250,000 barrels annually by 2013, with around 70% of the volume going through the on-trade. Assuming that licensees are free to stock whichever beers they choose, how easy is it to spot a likely customer? "Consumers want to make a statement about drinking something different to everyone else," informs Holt. Pedrick agrees. "We are now seeing the emergence of quality-conscious consumers who are more inclined to pay extra for quality and authenticity." says Pedrick. "They span all age groups but the majority are 25 to 34-year-olds and are upmarket with a high disposable income. They are a growing proportion of the population and are driving key changes in food and drink. This consumer trend is evident across many categories, not just beer, and is one of the factors driving the growth of speciality beer. "Consumers are more sophisticated and travel overseas more than ever before. They sample a wide variety of foreign brews on their travels so they want to have access to an ever-increasing variety of products from around the world when they are at home.