Tip of the iceberg

Super-chilled lagers are hot favourites, but has their growth been at the expense of the standard versions, asks Helen Sloan

The introduction of super-chilled versions of the best-selling standard lagers in recent years has been credited with reversing the general downward trend of beer sales.

Their distinctive condensation fonts have become common in pubs and bars and their popularity isn't in doubt. But do they bring drinkers into the beer market or are cust-

omers switching to a chilled version of their usual pint?

Figures for standard lagers are certainly positive - AC Nielsen says that in a beer market down 4.6% in the year to last November, standard lager dropped 2.4%.

By contrast, premium lagers, far fewer of which have had a super-chill makeover, continued to decline in the same period by 4.9%. To some extent, the roll-out of super-chilled could be credited with helping standard lager's sales, but on closer inspection the picture isn't quite as clear-cut. In 2005, specialist licensed trade research consultants CGA Strategy found that a certain amount of distribution cannibalisation was taking place. In other words, some pubs were simply replacing their standard lager brands with a colder version of the same product.

This trend has continued into 2006 and CGA research manager Phil Tate reports that some of the major brewers have been affected.

"Some brands have continued to sacrifice space for the standard variant to put the extra-cold brand on the bar," he explains.

"For example, the 1% space that the standard variant of Foster's lost was all due to the super-chilled variant. It did nothing to increase the total Foster's brand's share of space within the draught standard lager category."

Rejuvenation

But S&NUK, which makes Foster's Super Chilled, has no doubts about the benefits of the new breed of extra-cold beers. According to customer marketing director David Goadby, the lager market has been rejuvenated. He doesn't believe that customers are simply switching to a colder version of their usual drink.

"Not at all - cold products are attracting new and lapsed drinkers to the category and driving brand sales, rather than cannibalising them," he says.

In a strong endorsement of their commitment to the super-chilled brands, S&NUK quickly rolled out extra-cold versions across all its brands, reflecting customer demand.

"Our cold portfolio works well by attracting new and lapsed drinkers on the strength of the cold offering," says Goadby.

Increasing numbers of brewers have been getting on board, but Goadby feels that S&N, with its comprehensive range of cold products, is best placed to take advantage.

"The extra-cold market has become increasingly competitive, with many brewers buying into the cold selling point - but our experience shows that few are 'walking the talk'.

"Foster's Super Chilled is probably the best example of how the cold phenomenon has been harnessed to drive a mature brand and sector forward."

Also at the vanguard of the super-chilled revolution has been Coors, whose Carling Extra Cold was the first to hit the market.

According to CGA figures, Carling has managed to grow distribution of Carling Extra Cold without damaging those it already had for standard Carling.

Tate adds: "Carling has not lost significant share of space for the standard variant and continued to push the extra-cold variant into outlets, where it is the only cold beer.

"This has resulted in a 1% increase in Extra Cold and Carling share of the available bar space within the draught standard lager

category."

Cold beer stations

But there is another reason why Carling has managed to see stockists of extra-cold grow. Following Carling's launch in Scotland, it has a unique selling point against rival Tennent's, which, like InBev's Stella Artois, has only just started going down the chilled route.

Coors' new "cold beer stations" have also been introduced to increase its footprint in the cold market and offer chilled versions of Worthington's, Caffrey's and Grolsch. A pint can be poured in just nine seconds.

Carling marketing director Bill Simcox reckons super-chilled beer sales are on the up.

"The trade continues to embrace extra-cold, with additional distribution points and new brands coming on all the time," he says.

Simcox points out that, according to Coors' data, 70% of pubs serve extra-cold beer, with its own Carling at the forefront of this ongoing development, and he expects to see these figures continue to rise.

"The brands leading the way are Carling Extra Cold (in 31% of pubs) and Foster's

Super Chilled (in 24% of pubs), both of which

continue to grow distribution of their extra-cold variants."

Simcox is confident that this includes genuine growth, although he admits there could be an element of cannibalisation.

"There has undoubtedly been a move to extra-cold variants among consumers.

However, since the category is in growth, this can't all be cannibalisation from other mainstream brands. In-outlet research shows us that outlets with extra-cold lager outperform outlets without extra-cold lager."

Individual tastes

InBev was one of the last to get in on the act, conceding last year that it had underestimated the opportunity by only launching Castlemaine XXXX and Boddingtons in the format.

In the case of Boddingtons, both varieties are generally supplied to satisfy traditional ale-drinkers as well as those who would prefer a colder pint. But for Castlemaine XXXX, the picture is less clear. Many pubs take both, but some pubs are choosing to stock only one, according to a spokeswoman.

"Some do take one or the other. InBev works with them on a customer-by-customer basis to work out what's best for their consumers," she says.

And although she says some customers

have simply switched from regular to cold, she says that InBev has seen a clear sales increase with the introduction of super-chilled.

"Obviously there will be an element of cannibalisation if you have the extra-cold variety and the normal variety, but the reason it's done is to generate incremental sales. Otherwise there wouldn't be any point."

Going forward, InBev has just introduced Tennent's Ice Cold across Scotland, which is a good indication that it is confident it can make up ground lost to Carling Extra Cold.

And its new Brasserie Artois fonts are said to dispense beer at super-chilled temperatures, negating the need for a stand-alone cold product for Stella Artois.

Carlsberg was quicker to move into chilled, with all its leading brands available in the

format.

"When Extra Cold is installed, we see a 12% uplift in overall Carlsberg lager volume,"

explains Carlsberg's sponsorship and media relations controller Gareth Roberts.

"Of course, there is cannibalisation of standard products," he admits, but he says its sales show that Extra Cold Carlsberg is being adopted by new drinkers. "It is increasing the category," he says. "This means continued purchase of standard, movement to extra-cold and new drinkers coming in to the category."

And Phil Tate from CGA acknowledges this too: "The extra-cold phenomenon re-invigorated the draught standard lager category and represented the first significant innovation for some time.

"This has led to further investment in the category, with new brands such as Beck's Vier being successfully launched into the

marketplace."

Despite its evidence of cannibalisation,

CGA believes that there is room in the marketplace for both super-chilled and regular lagers to be sold side by side. Tate remains cautiously optimistic that there is some room for growth.

"Extra cold lagers are available in 28,580 pubs, so there is still some room for growth for these brands, but CGA believes that this level of growth will slow down."

Heineken's Strategy

Notable amongst the big breweries in its refusal to jump on the super-chilled bandwagon is Heineken.