Cask: Market analysis

Related tags Cask ale Beer Cga

Last year's Intelligent Choice report into what it presented as a booming cask market was, according to some sources involved in its creation, a...

Last year's Intelligent Choice report into what it presented as a booming cask market was, according to some sources involved in its creation, a missed opportunity. Brewers and trade bodies did not market it well enough to the mainstream press, they felt.

Just as the industry's lobbyists and marketing men can miss an open goal, so just as easily can individual pubs.

That's why thepublican.com has commissioned exclusive new research by CGA Strategy (see attached file, below right) that drills down into cask ale's story and how it is playing out in different pubs. It should help you understand the trends and how not to miss your opportunity.

Looking broadly at the total cask market and the total beer market, the differences are negligible. They are both having a torrid time, with massively declining sales in both.

Encouraging reading

However, the figures make for more encouraging reading once you strip out the sales data concerning beer produced by the 'Big Four' brewers (Coors, InBev, Scottish & Newcastle and Carlsberg). Their neglect of brands such as Tetley and Worthington is often blamed for cask's troubles.

Once you analyse it this way, cask ale is faring significantly better than beer as whole. The volume of all cask sold by the entire on-trade (CGA puts this figure as 128,471 outlets in 2008) declined eight per cent in 2008, and the value by 5.5 per cent. On-trade sales of beers excluding the produce of the Big Four, meanwhile, fell only six per cent in volume terms and 3.7 per cent in value terms.

The second figure is perhaps the more important, pointing to the increasingly premium prices licensees seem able to command from consumers of cask.

Below the national brewers, CGA splits the rest of the pack into categories based on the volumes produced. Praise should be heaped at the brewery gates of micros (such as Wyre Piddle and Spinning Dog) and the so-called super-regionals, including Marston's and Greene King, for the robustness of the cask market.

Super-regionals thoroughly dominate the sector, achieving 41.3 per cent market share in 2008, a surge from a 39.9 per cent share in 2007.

The scores of micros generally operating at a local level made up 25.7 per cent of the market in 2008 - up from 24.8 per cent in 2007.

Getting interesting

However, it is with an analysis of sales by different types of pubs that the research gets really interesting. This provides a revealing insight into the changing market, and a basis for every licensee to shape their cask offering. It would seem prudent to follow the trends and to take inspiration from the retailers' advice fround at the bottom of this page.

When splitting the on-trade down into outlets CGA defines as pubs (of which there were 62,358 in 2008, according to CGA), cask sales declined 8.6 per cent in volume terms and 6.3 per cent in value terms.

Food-led pubs (defined as venues where food accounts for more than 30 per cent of sales) have shown impressive gains in their cask ale sales. Foodie pubs' sales of cask beer grew 1.2 per cent in volume in 2008 and 2.5 per cent in value.

'Circuit bars' (defined as town-centre venues or those that drinkers would visit on a circuit from a town centre) suffered heavy sales declines, their volumes falling 15.1 per cent and their sales value 12.9 per cent.

Locals (defined as traditional wet-led venues) likewise had a tough time of it. Their cask ale sales fell 9.2 per cent in volume and 6.3 per cent in value.

The local, though, unsurprisingly remains the real home of cask, the volume passing through these outlets dwarfing that from circuit bars and especially the newly emergent food-led pubs.

Cask declines in circuit bars and locals appear disastrous, but can be partly accounted for by the fact that there are fewer of these outlets. Indeed, in all three categories - food-led pubs, circuit bars and locals, there are simply fewer pubs around to stock the beer. Traditional wet-led pubs are also opting for food as a central revenue stream and swelling the ranks of those CGA classifies as food-led.

How to respond

According to CGA head of insight Phil Tate, the data indicates the ways in which successful licensees are responding to cask's popularity.

He says: "A common theme is retailers opting for one tried-and-tested super regional brand on a consistent stocking policy, with a smaller regional or micro brand on rotation. This is shown in the data by the growth of the super-regional and microbrewer share of the category."

Tate stresses that pubs should not get over-ambitious with their number of fonts, and that it is the quality that comes with having enough throughput which is converting customers. "The market seems to be moving two ways with pubs opting to add more cask brands or to offer two cask fonts in order to guarantee they can deliver the necessary volume requirements to ensure quality," he explains.

"As outlets get interested in the category, a challenge is guaranteeing that new stockists, who may not have had experience in handling cask, are able to deliver the necessary volumes and cellar conditions to provide a quality product. This is where suppliers can assist these venues in education."

Fuller's Inns managing director Simon Emeny

Advice for:​ Circuit bars

"It's especially important with cask to maintain throughput. The CGA figures suggest that many of them have tried and failed to maintain that throughput. Frankly, if that's the case, it's good for the industry because consumers will not be seeing poor quality cask in those outlets. You need the throughput and quality; otherwise, don't do cask at all."

Advice for:​ Food-led pubs

"These pubs have higher footfall, especially since the smoking ban. They have generally had a lot of investment, so are performing well. It makes more sense for these pubs to have cask ale because their customers are the type that will sustain the throughput.

"I would want to stock a big brand, where they know it's brewed to a consistent quality. Then have a series of rotating local brands."

Greene King Brewing Company marketing director Fiona Hope

Advice for:​ Circuit bars

"I've never been sure that quality is high enough on their agenda. That's the first thing they need to get right with cask.

"Focus on big sporting events, which of course a lot of cask brands will help you with. Think Greene King and rugby, Marston's and cricket…"

"Circuit bars typically attract young people, so are a perfect opportunity for converting new drinkers to the product."

Advice for:​ Food-led pubs

"Offer cask beer matches with food. Most pubs moving into food do so with classic English dishes, so that's a big opportunity for English beer.

"Use tasting notes and raise the profile of guests with chalk boards. Just as chalk boards work well for the flexibility you need for food specials, so they do with guest beers.

Advice for:​ Locals

"Make sure you are maximising events that cask brands support, such as St George's Day, and talk to your suppliers about exactly what you are going to do do drive trade. The upcoming Cask Ale Week is one such perfect opportunity."

Punch Taverns beer and cider category manager Stephen Martin

"Punch made a real effort three years ago to focus on cask ale to support a point of difference between the pub trade and home drinking. Punch pubs stocking cask on average now have 3.8 handpulls on the bar, where as the industry average is 3.1.

"We don't split the data down by category as such - we treat all pubs the same and are keen to increase the sales where ever possible. However, we have seen the growth of food in pubs and as they are selling more food, some are now selling more cask, perhaps off the back of it."

Shepherd Neame sa

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