Growing real ale sales: the report you MUST read

New research says it's a landmark moment for real ale. The MA teamed up with leading industry figures to discuss its potential for pubs. Noli Dinkovski reports

The real-ale market is a mass of contradictions. On the one hand it has been in steady decline for more than a decade, falling by 5.6% in 2006 alone as the four big multinational brewers continue to shift their emphasis to lager.

On the other, more than 160 breweries have opened in the last two years, and there are currently more brewers than at any point in the last 50 years. It's little wonder then that regional and local brewers are growing by an average 7.5% year-on-year.

The question of who drinks the stuff is just as confusing. Real ale has long been seen as an "old man's" drink, yet its richness in variety and provenance fits in perfectly with a younger population, both male and female, eager to move away from mainstream global brands in favour of local products with a difference.

These facts and findings are part of a new report put together by a host of organisations - think tank Why Handpull, Cask Marque, Camra, the Society of Independent Brewers (Siba) and the Independent Family Brewers of Britain. Entitled "The Intelligent Choice" - The True State of the Market for Cask Ale in 2007, the report focuses on the latest trends in the sector and highlights the opportunities real ale can bring to licensees.

Hot on the heels of the report, the Morning Advertiser last week hosted a real-ale seminar, bringing together brewers, suppliers and retailers to discuss how real-ale sales can be increased. Summarising the report's findings, guest speaker, Cask Marque director Paul Nunny, gave a positive outlook for the future of real ale. Nunny predicted that volumes would begin to rise "within a few years" as the regional and independent brewers continue to encroach on the share of the multinationals.

"Retailers are waking up to the importance of cask ale - they see the opportunities it can bring to pubs," said Nunny. "Now we have to ensure they make the most of the opportunities, and help them with purchasing, training and getting the right product range."

In pulling together the report, the organisations involved have attempted to present a united voice for the industry. Not before time too, said Young's retail director Patrick Dardis, who believed the "hugely fragmented" real-ale market had been a consistent problem. "Our biggest competitor is actually the off-trade - yet we forget that you can't buy a hand-pulled pint anywhere other than in a pub," he said. "As an industry we need to start promoting that."

The danger with such fragmentation, added Dardis, was when some retailers were determined to sell on price. "Why is real ale always the cheapest of all beers on tap when it's such a diverse product? Cheap real-ale sales cannot help drive the premiumisation we want," he said.

Cheap pints of real-ale sales across the board was not something that Siba chairman Keith Bott is witnessing - it is also being drunk by younger consumers in upmarket bars. "These places are charging premium prices, increasing profitability and footfall," said Bott.

Punch marketing director Geoff Brown agreed that price differences do exist, but urged brewers not to forget community pubs, where large volumes are sold. Brown said: "Any messages we convey about (making ale more premium) won't apply to pubs in places like West Yorkshire and the M62 corridor. It just won't work."

Pricing approach

CGA Strategy chief executive Jon Collins, another guest speaker at the event, argued that there was more scope for a pricing ladder. "The house ale can go in at one level, and the guest ales at another, and so on. There's no reason why the industry can't take this approach."

Traditional real-ale heartlands that sell on volume may remain, but there was plenty of optimism for the number of social trends that point towards making real ale a more premium market elsewhere. The report itself picks out a number of these trends: an ageing population; more disposable income; people staying single for longer; more adventurous tastes; greater interest in keeping things local; more empowered women - all of which increase the opportunities for real ale to be drunk.

Even Brown, who previously wasn't convinced about increasing real-ale sales among women, has now changed his mind. "In the UK, one in 10 ale drinkers are female, but I was just recently shocked to discover that in the US, it's actually one in four. So it's all about perception and there's a huge pot of gold waiting for us to exploit it," he said.

If the seminar attendees were agreed on one thing, it was the fact that if sales are to increase, quality standards must improve. Greene King managing director Justin Adams said: "If we need to get one thing right, it's quality. Otherwise we are shooting ourselves in the foot."

This comes right down to the serve, including the font, the glass and the temperature of the drink. Dardis said that monitoring the temperature was crucial. "I'd say average temperatures are currently around 14°C-15°C - bringing it down to the preferred 11°C-12°C will make a hell of a difference, and also help placate the consumer trend to chilled drinks," said Dardis.

When it comes to quality, Brown believes there is "just no scope" for licensees to cut corners. "Those who don't clean their lines properly will suffer, it's as simple as that. It may not be so apparent at first, but in my experience it is the only outcome licensees face."

One difficulty is that investing time and money on keeping the cellar and lines clean brings far less tangible benefits than, say, putting the money into an improved beer garden. That's why the industry needs to show a united front in demonstrating to licensees the opportunities presented by real ale.

Caledonian Brewing Company managing director Stephen Crawley reflected the opinion of most when he said this latest report was a positive start. "It's great to see the report in the flesh - it's ideal for those who don't fully understand the market, but want to publicise the good things about real ale."

The Intelligent Choice - REPORT's KEY FINDINGS

l The real-ale market is worth around £1.4bn a year and accounts for 11% of all on-trade beer volume

l About 2.4 million barrels of real ale are drunk every year

l Real ale is found in 40%

of the nation's pubs

l Multinational brewers account for 56% of the total cask-ale market

l There are 5.4 million people claiming to be real-ale drinkers (just over one in 10 adults, or 15% of pub goers)

l Most real-ale drinkers - 60% - are aged between 35 and 64, but the overall age spread, particularly from 25 and upwards, is very broad

l While only one in 10 drinkers is female, that still equates to over half a million people

l Real-ale fans are affluent, with 78% graded ABC1

Camra claims six out of 10 adults have never tried real ale, so most of those rejecting it don't actually know what it tastes like.

What licensees must do now

l Emphasise the link between beer

and food

l Commit to undertaking more training

for themselves and their staff

l Offer "try before you buy" on ales to stimulate sales

l Talk ale up to customers, drawing on the history for the beer, and the brewery producing it, and make a virtue of locally-sourced brews

l Take a hard look at your range and your pricing structure

l Finally, read the report for yourself. You can download it at www.morningadvertiser.co.uk/pdf/caskalereport.pdf

Why stock real ale?

l Real-ale drinkers are mainly affluent

and upmarket

l Research shows real-ale drinkers frequently determine the choice of pub

l Increased variety can increase a pub's profitably, provided the quality is good

l Managing real ale shows you care about your pub

l Real ale is local and is low on carbon miles

l It is the perfect drink for unhurried social occasions, as opposed to session drinking