In association with Diageo

The evolution of the UK beer scene

By Nicholas Robinson contact

- Last updated on GMT

Evolution: beer is still evolving in the UK
Evolution: beer is still evolving in the UK
Brands are tapping into drinkers’ adventurous taste buds with new craft-inspired brews, yet the stalwart lager category continues to lead the on-trade beer category.

A brief history of beer

In the beginning
Brewing dates back thousands of years. Households fermented grains, water and yeast to create a simple drink. There is no precise point in time where beer’s invention can be dated

Middle ages
Monasteries and abbeys handled much of the beer brewing in the Middle Ages, whereas households made watered down, weaker, ‘small beer’ as a safe alternative to water

15th century
Hops were used to flavour and help preserve beer for the first time

16th century
It is believed bottled beer was discovered when a 16th-century clerical dean found an unopened bottle in a river, which was surprisingly drinkable

18th century
Beer engines were used for the first time to pump beer up to the bar through  fonts, improving taste and quality. Before this point, beer was taken straight from the cask. All beers from this point contained hops, which were harvested annually by seasonal workers – usually from cities like London – in lowland places such as Kent

Arthur Guinness – born in 1725 – used a £100 inheritance to set up his own brewery. In 1759, he signed a 9,000-year lease on what is now known as the St James’s Gate Brewery. Guinness is now the UK’s Number one stout, the third largest beer brand, and is experiencing 1.3% year-on-year value growth (CGA Strategy OPMS MAT to 30/12/2017)

19th century
Beer was produced on a massive scale as the industrial revolution kicked up a gear. Many of the brands we recognise today started during this period. Two of the most popular beers in the 18th and 19th centuries were stout and porter, such as Guinness

20th century
Better-quality drinking water and improved diets, as well as restrictions on beer in World War I, saw the number of barrels of beer consumed drop. Beer never reached its pre-war consumption of 36m barrels again

Mid-20th century
Bottom-fermented beer, known as lager, came to the shores of the UK, climbing from 1% of consumption in the 1960s to a significant proportion of the market these days

The Campaign for Real Ale (CAMRA) was founded to save traditional ales and beers from being wiped out by fizzy lagers

Brits fall in love with lager for a second time, with sales of imported brews surging, boosting category sales to 75% of beer consumption

Beer holds almost half of on-trade alcohol share (49.4%), with lager now accounting for 69% of the value. Mainstream brands are in decline, but niche brands and new products are countering that drop and bringing excitement to the category

If Britain was a living being, beer would be the blood that runs through its veins. For thousands of years, in one form or another, grain-fermented liquids have been a staple part of life on our island.

From humble beginnings as a simple mix of water fermented with yeast and grains at the dawning of modern humankind, to the complex plethora of brews available on bars and in fridges across the pub trade – we have always known beer.

Beer evolution

For a long time, it was brewed in people’s homes, before monks in monasteries and abbeys took advantage of what they saw as a lucrative trade.

It became more complex as flavourings, such as honey in mead, and hops were used to create tastier brews as well as a preservative.

The prime function of beer in the early days, however, was to hydrate since it was much safer to drink than water.

Fast forward centuries to modern-day Britain and what’s brewed is dramatically different.

Beer has long since been a functional beverage and has transitioned into a segment with something of a cult following, especially in the craft category.

Beer is responsible for almost half (49.4%) of all on-trade drinks sales, followed by spirits (25.1%), wine and Champagne (16.9%), and cider at 7.5%, according to CGA OPMS MAT data to 30/12/2017.

The same data shows lager dominates the beer category, taking a 69% value share of the market.

Not only does lager take the lion’s share of the market, but it is also the only sub-category in growth at 0.7%.

The mainstream market, however, is experiencing decline of 2.2% in value and 4.7% in volume as consumers seek more interesting and flavoursome options that are now available.

As a result, world and craft beers are picking up in value and volume terms, with world beers now accounting for 16% of value sales (up 10.9% year on year).

This segment has contributed £190m to the beer category, with 89% of volume sales coming from the top 10 brands.

Craft-inquisitive Brits

Craft, which is lauded as the superstar of beer, is growing at 8.4% in value, contributing £65m to value growth.

Although craft is championed by many in the on-trade, it only accounts for 7% of value sales, with 22% of volume sales coming from the top 10 brands.

This figure could be set to rise, as new brands and styles are launched into the segment and more consumers become interested in it.

Kantar’s Craft Beer Omnibus Survey data for September 2017 showed only 11% of consumers claimed to drink craft beer weekly.

Despite this low figure, there’s an estimated 7.5m Brits who call themselves ‘craft-inquisitive’.

“This means they mainly drink mainstream beer, are interested in craft, but aren’t buying into it very often,” says Diageo senior category strategy manager Clare Moscrop.

“This group has three main barriers to purchase when it comes to craft beer: value for money, confusion over choice, and concerns that the quality will be poor and that the taste will not match their expectations.”

Simplifying the offer

Therefore, there is a huge opportunity to trade up into these segments, away from mainstream beer, by simplifying what is on the offer and focusing wholly on quality, she adds.

Guinness’s innovations manager Katie Hunter explains how the brewer’s new Open Gate Brewery Citra IPA and Pilsner play familiar against new.

“Our two new highly crafted beers sit in the white space between mainstream and craft beers – enabling consumers to trade up from mainstream beer with the assurances of the Guinness brand,” she says.

Top 10 world beer brands:

  1. Peroni Nastro Azzurro
  2. San Miguel
  3. Birra Moretti
  4. Corona Extra
  5. Estrella Damm
  6. Hop House 13 Lager
  7. Staropramen
  8. Cobra
  9. Sol
  10. Pilsner Urquell
    *CGA OPMS MAT to 30/12/2017

Guinness’s Hop House 13 is an example of how brewers are widening their horizons and acting on new consumer demands.

Now one of the top 10 world beers, it is also demonstrative of the success that can come from innovation by a well-known brand.

Hop House 13 has sold 24.5m pints in the on-trade since its launch in 2015 (CGA OPM to 24/2/18) and the two new launches from St James’ Gate will look to replicate this success.

“As brewers, our goal is to introduce people to the more flavoursome possibilities of beer,” explains Guinness lead brewer Peter Simpson.

“It’s no secret that many people are moving away from mainstream beers and seeking more flavoursome options.”

Encouraging trial

Top 10 craft beer brands:

  1. Brooklyn Lager
  2. BrewDog Punk IPA
  3. Camden Hells Lager
  4. Meantime Pale Ale
  5. Marston’s Shipyard
  6. Camden Town Pale Ale
  7. Sharps Atlantic Pale Ale
  8. Blue Moon
  9. Fuller’s Frontier
  10. Innis & Gunn Lager
    *CGA OPMS MAT to 30/12/2017

Although more options can be daunting, to counter this flavourful brands can bear a small similarity to the mainstream to encourage trial among a wider consumer group.

The current desire for more flavoursome beers is no doubt driving growth of craft and world beer.

Throughout history, in one way or another, beer has played an important role in British society and continues to do so, yet it has progressed further in the past decade than at any other time and shows no sign of slowing.

This feature was brought to you by The Morning Advertiser in association with Diageo as part of a project looking at the history and future-scope of beer in the on-trade.

Keep a look out for the next Bar Essentials feature - with ranging advice – which will appear in May.

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