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EATING & DRINKING

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By thirsty hack Ignatius Rake

Posted February 11, 2014
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Lack of clarity holding back UK craft growth, says international market research firm.


As previously reported on the pages of the Rake & Herald, British brewing is experiencing an unprecedented boom, with figures released by the Campaign for Real Ale (CAMRA) this past October showing that the number of breweries in the country has effectively doubled from 668 in 2008 to a present figure of 1,147.

Attributing this to the introduction of Small Breweries' Relief in June 2002, international market research firm Mintel reports that a quarter of British adults, equating to some 13m people, consumed at least one craft beer during the last six months of 2013.

"As the segment develops and its popularity increases," a company press release states, "it is moving towards the overground and mainstream consumption."

Craft beers, Mintel continues, "have forged associations with high quality, so much so that over a third (35%) of beer drinkers think that they are worth paying more for".


WHAT'S IN A NAME?
While the US Brewers Association (BA) strictly prescribes what constitutes an American craft brewer and ergo craft beer, the definition remains much more blurred on this side of the Pond.

Furthermore, this lack of clarity, Mintel's says, could "be holding the category back".

While research conducted by the company found that 50% of beer drinkers polled "expect craft beers to taste better, 40% admit they are unsure about what the term 'craft' beer actually means".

Thus "educating consumers about the segment and what it stands for is important, as 45% of beer drinkers agree that these beers would be more appealing if they knew more about them".

Whereas one of the BA's criteria limits an individual craft brewer's production to no more than 6m barrels per annum, craft beer in the UK, Mintel says, "appears to be more about production methods and quality than size, as 40% of beer drinkers are interested in trying a craft-style beer from a large brewer".

"Far from being a niche area reserved for small brewers, craft beers are actually something which larger brewers can also tap into," says Mintel senior drinks analyst Chris Wisson.

"While it was thought that the craft movement was going to be bad news for leading brewers, the fact that 40% of beer drinkers would be interested in trying one from a large brewer proves that craft beer does not necessarily need to be limited to smaller operators."

"Rather than focusing on size, craft should be more of an ethos which stands for high quality and artisan skill, giving the consumer a different drinking experience," he argues.


A MARKET IN FLUX
Although Mintel says "the growth of craft beer is encouraging", the overall beer market "continues to find itself in a state of flux".

Last year, for instance, the amount of people drinking beer "remained broadly the same" as in 2012: of the 71% of UK adults that drink beer, 63% claimed to do so at least once a week.

However, the actual amount being consumed is on the slide in line with a general drop in alcoholic drinks consumption.

Moreover, despite the government finally axing the much hated beer duty escalator this past March, 31% of beer drinkers report that they are drinking less beer than was the case in 2012.

On the other hand, the number of people claiming to drink more than they used to stands at just 13%.

In line with all this, total volume sales fell from 4.24bn litres in 2012 to 4.09bn last year, a decrease of 3.4%.

"Against this background, further volume declines are forecast in the market to 3.49bn litres in 2018", the company warns.

That said, "inflation and trading up to premium beers" will likely "prop up value sales to a degree" and thus it expects the market to increase from £16.7bn ($27.5bn) at present to £18.4bn by 2018.


BEERS DRUNK
Moving on to the types of beers drunk in the UK, Mintel identifies lager as the most popular category, having been consumed by 58% of adults during the latter half of last year.

It is also "the only type of beer to show significantly higher in-home usage than out of home" (47% against 31%), something that reflects "the difference in the cost of drinking in the on- and off-trade".

Ale is also "showing signs of growth", with 31% of adults now drinking it.

However, while "many cask and premium bottled ales" are clocking up "reasonably encouraging growth", stout is "struggling as many consumers gravitate towards 'lighter' drinks, such as golden ales".

Another growing segment is that of spirit beers, or speers, which Mintel says are now drunk by 18% of adults.

Nevertheless, these beverages "may still have a way to go to convince beer drinkers overall as just 26% claim to find them appealing and a further 49% say they think beer should be left unflavoured".

"The growth of craft beer taps into an overall trend of many beer drinkers becoming more demanding when it comes to the quality of their beer," Wisson says.

"The fact that two thirds of them think that it is worth paying more for better quality beer goes some way to explaining why premium brands, such as Peroni, go from strength to strength despite their higher price."

"As prices of many drinks continue to go up, many drinkers are looking for discernibly higher quality to justify the cost."

"Focusing on the quality of ingredients, such as hops and the brewing process, should help brands to convey their superior quality to beer drinkers."


See also Brewing keeps blooming in Blighty, posted 10/10/13.


Ignatius Rake
is a freelance journalist and geographer who has so far visited 70 countries on six continents. A published lyricist, he has fronted punk bands in both the UK and Poland, including the only band ever to be kicked off BBC Radio Cornwall. He has been known to like a pint.



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