Frozen

stiff

The lager market is showing little sign of life. Will extra cold be its salvation asks NIGEL HUDDLESTON in this five-page special feature

Forget global warming ­ the future's cold. At least, that's what the major brewers think about the lager market as they desperately search for some excitement to increase trade in a market that has lost its oomph.

AC Nielsen figures for the year to November show a market in value growth of just 1.2%, with volumes down 1.8%. Mainstream lager was up 3.4% by value and draught premium dropped by 1.1%. Premium packaged lagers were down 3.6% in the same time frame.

Guinness started the cold trend with Extra Cold and already the flag has been taken up by Carling with the same suffix and Foster's with its Super-chilled.

But not everyone's so convinced by the trend, so don't expect to see Heineken Really Pretty Freezing Actually just yet.

But if you thought Cold was just a fad, the statistic that 60% of Carling sales are now in that format tells another story. Lukewarm draught lager seems to be dropping like sales of the CD single, if you believe what the major brewers say.

Some licensees are proving resistant to change, though, with pressure on space one of the major issues.

Graham Rowson, who runs the Plungington Tavern in Preston, has cold versions of Guinness and Tetley's, but says there just isn't the room for any more kit.

"I'd need two extra sets of branded glasses because I'm a big believer in them, and two more coolers for the back bar," he says. "It's OK if you've got the space for all that. There's also a problem with the extra heat generated by the cooling systems.

"I've taken a tip from the European market and installed a freezer to chill the glasses instead. It's a back-door approach to extra cold and it's working."

Rowson says he had "a few" customers ask for extra-cold lagers, but they were pacified once the logistical issues had been explained.

Kevin Armes, licensee of the Rose Grower in Bramcote, Notts, had similar issues with the whole cold phenomenon.

"Its just a marketing ploy really," he says. "But the problem is space because they all insist on having their own cooling equipment. A few years ago we had remote coolers that dealt with everything and they went. Now everything's coming back with individual coolers. It's a bit of a pain in the neck as an end user."

Extra Cold attracts new drinkers

Unfortunately for the big brewers the cold concept gets them off the hook in a market where they're constantly being accused of a lack of innovation and which has run into the buffers.

Chris Phillips, Carlsberg's UK customer development director, insists: "Extra cold brands are driving innovation in the beer category and have been shown to increase growth through attracting new drinkers."

Critics of extra cold argue that it does nothing of the sort, merely causing switching from the main brand to the colder version, while others argue that it's an innovation that shouldn't really be necessary.

Fiona Langan, trade marketing controller for Halewood International, which prefers a chilled bottle route for its Bravara Brazilian lager brand, says: "Everyone's had the experience of being served warm lager, so consumers are interested in the proposition of Extra Cold. It's something a lot of consumers will be for, but they'll be saying don't make me pay for it'. Really (brewers) are only delivering what they should do anyway."

Other suppliers insist they're already hitting the right temperatures, just not making a song and dance about it. Tony Baumann, UK sales manager for Warsteiner says: "We pride ourselves that where we are dispensed we have the right equipment anyway."

And Richard Bradbury, on-trade sales director for Heineken, adds: "We're already serving Heineken at 3 C to 5 C anyway ­ we just don't put cold on the font. It's a development that's worked well for standard lager but it's not a route we want to go down for either Heineken or Amstel. I'm not sure consumers are bothered about getting something that's extra cold; they just don't want something that's warm."

But the extra-cold faction claims that many licensees and brand owners fail to deliver lager at sufficiently cold temperatures. John Holberry, on-trade sales director at Coors Brewers, goes along with that view. He says: "Most beer has not been dispensed cold. It's been at about 8 C to 10 C when it is supposed to be 4 C to 6 C. (Other suppliers) can say what they like about what should be dispensed, but they haven't been around the trade with a thermometer. If we're going to invest in all of the technical equipment then we had to make sure we told consumers it was extra cold. Carling Sometimes Cold is not what we're after."

The level of technical investment required to roll out an extra cold brand means launches so far have come from the major brewers. Scottish Courage's Foster's Superchilled followed the head injection tap initiative, which was designed to improve product quality for both Foster's and Kronenbourg.

Sarah Maddock, trade marketing manager for lagers, points out that Superchilled came without a price premium. She adds: "We're making sure we can recruit new drinkers, and product quality has been a key obstacle in the past."

Difficult to differentiate brands

John Holberry at Coors thinks extra cold is a "short cut to premium" in the eyes of consumers, and if he's right, it could prove to be a further blow to the premium draught market which continues to struggle.

Budweiser Budvar is going against the grain with its decision to focus more on draught product, kegged in the Czech Republic, rather than bottled. On-trade sales director Neville Hall says: "Life in the fridge is much more difficult so we believe a niche draught product is the way to go."

The word "niche" may be the key to Budvar's fortunes as it relies on something of a cult following born out of its underdog status in the trademark battle with Anheuser-Busch.

For other Continental brands it's harder to differentiate yourself. Colin Pedrick, managing director for on-trade sales at Stella and Staropramen supplier Interbrew UK, says pubs need to understand why they're listing a brand too.

"Research," he says, "shows that the best way to grow the premium lager category is not necessarily by adding a second draught premium lager because the two will compete and steal business from each other. It is more profitable to stock one well-known draught premium lager brand alongside a niche brand which will create a point of difference."