|Title:||United Kingdom top 10 alcoholic beverage brands ranked by media spend in pounds sterling and percent change with a percentage breakdown for media type for year ending June 30, 2011|
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Alcoholic drinks: X July 2010--XX June 2011
TOTAL CHANGE MEDIA [pounds y-o-y% Cinema% Outdoor% PresX% Radio% TV% sterling] m
Stella XX.X -XX.X XX.X XX.X X.X * XX.X Artois
Foster's X.X XX.X X.X X.X X.X * XX.X
Carling X.X -XX.X * XX.X XX.X * XX.X
Budweiser X.X XX,X XX.X XX.X X.X X.X XX.X
Strongbow X.X -X.X XX.X X.X X.X X.X XX.X
Wagners X.X -XX.X X.X X.X X.X * XX.X
Smirnoff X.X X.X XX.X XX.X X.X X.X XX.X
Bacardi X.X -XX.X XX.X XX.X X.X * XX.X
Heineken X.X X,XXX.X XX.X X.X X.X * XX.X
Bulmers X.X -XX.X * XX.X XX * XX.X
TOTAL (TOP XX.X -X.X XX.X XX.X X.X X.X XX.X XX)
How low can you go? George Osborne sent a clear message as to just how low he'd like brewers to go in this year's budget, halving the standard rate of duty on beers of X.X% abv or below.
That change came into force last week, as did a change at the other end of the beer aisle - an additional duty on beers over X.X% abv that has added XXp to the price of a can of super-strength lager. The chancellor was unrepentant, insisting the duty revamp will "reduce the health and social harms resulting from problem drinking". Whether it does or not, beer makers are having to rethink their strategies in what is already an extremely challenging environment for the sub-category.
With volume sales down XX.X% and value down X.X%, beer and lager are chiefly responsible for the overall alcohol category's X.X% slump in volume sales over the past year [Kantar Worldpanel, XXw/e XX July]. Along with RTDs, they have also ensured value growth has been pegged back to X% (see pXX for full report on the beer & cider category).
But while the chancellor may be a tad optimistic in thinking the nation is suddenly going to abandon its hard-drinking ways, the introduction of more low-abv beers may actually prove the shake-up the category needs.
One thing is for sure, unless you're talking about high-quality beers, there's not much growth potential in the high-strength market. In the year to August X, Nielsen figures show the total super-strength lager category in take-home fell X% by volume. Only imported strong beers, such as Duvel Special and Chimay Blue, showed strong growth as consumers traded up. Own-label super-strength lagers fell X% by volume.
In fact, own label seems to be having a torrid time full stop, with volumes down X% at the other end of the abv scale - the category Nielsen describes as "commodity lager", but that brewers would proba-bly prefer to call "low strength". However, branded low-abv beers recorded a X% rise in volume sales, and this is where brewers are understandably now focusing their attention - not just because it allows them to halve the amount they pay on duty, but also because it enables them to escape the commoditisation trap.
Doug Walker, Heineken UK's head of customer marketing - off-trade, says the com-pany "sees a long-term opportunity to create a lower alcohol sub-category" - but "it's got to be a great tasting product and a credible brand".
Heineken UK stuck its head above the par-apet a week before the budget in March, pledging to launch a low-strength variant of one of its top brands - Heineken, Foster's, Strongbow or John Smith's - by 2013. However, the brewer made no specific commitment that the new drink would be below X.X% abv, and all Walker will say is that "we continue to keep the market under review".
The pressure isn't just coming from the government. Retailers - having borne the brunt of criticism from MPs and the health lobby over alcohol price promotions - also want to be seen to be doing their bit, which means they are embracing the X.X% abv market and looking to brewers to come up with credible products.
Some brewers have been quick to oblige. AB InBev launched X.X% abv variants of its Labatt's and Rolling Rock lager brands as an Asda exclusive last month, while Carlsberg UK has just announced it is reducing the abv of Skol, the market-leading low-strength lager, from X% to X.X% (see The Grocer, pXX,X October).
"We've chosen to reduce the abv of Skol to X.X% because it has a strong heritage in the UK market and an established customer base who have already shown they actively want a beer with a lower strength than the typical UK lager," says Isaac Sheps, chief executive of Carlsberg UK.
Regarding the long-term potential for X.X% beers, Sheps believes it is important "to bear in mind that in the UK we already typically drink beers at an abv lower than the average in Europe". Consumers, he says, have plenty of choice of lagers with an abv of around X.X% to X%.
"We've carried out specific research looking at consumers' views of beers EXEE with a X.X% abv and it's clear they have significant concerns as to whether beers ofthis strength will deliver in terms of flavour," says Sheps. "Ultimately, for the segment to become significant and support the government's responsible drinking goals, this perception will need to change and consumers will have to actively want beers ofthis strength on the basis of them delivering against a specific need, not just because they are lower priced."
One such specific need is likely to be that of health. The experience of other markets suggests the health message can drive sales - Bud Light, launched in the US in 1982, was the world's bestselling beer until Chinese lager Snow overtook it in 2008. But Bud Light flags up its low calorie count (XXX per bottle) rather than focusing on abv (X.X%) and in the UK, consumer confusion over the fact that 'Lite' did not signify a lower abv was seen as a factor in its failure to make an impact after its 1999 launch - and in its withdrawal from the market two years later.
"A LIGHT CHOICE FOR WOMEN"
Beer brewers could do worse than take a leaf from the books of their cider and wine-making peers. Lower-abv ciders and wines have been building a presence for some time. Nielsen figures show the category has almost doubled in value sales, up XX% in the year to X September 2011.
Magners owner C&C Group launched X.X% abv Magners Mid-Strength in 2008, but it was clearly a step too far for the market, and the cider was pulled from shelves the following year. With somewhat better timing, Suffolk cider maker Aspall launched X% abv Lady Jennifer's this summer. Geoff Bradman, Aspall joint managing director, acknowledges that "in the context of other long drink categories X% abv isn't that low", but says "it is lower than the rest of the Aspall range". The launch was prompted by "growing interest in lower-abv products generally, and secondly, the fact that lower-abv products tend to appeal more to female consumers," he adds.
Dom Robertson, managing director of branding agency RPM, believes this is an important factor. "Lower-abv products can definitely drive sales in the alcohol category if marketed to the right consumer - for example, Coors Animee as a light choice for women," he says. "As drinkers are becoming increasingly diet-conscious, brand owners are under growing pressure to ensure their product range is varied enough not to alienate the health-conscious consumer."
Given the perspective that female consumers are the most likely to respond to the health and lifestvle benefits of lower-abv products, it's no surprise that wine brands have had the most success in establishing the category. Brand Phoenix launched its First Cape Cafe Collection range of X.X% wines two years ago. Backed by a [pounds sterling] Xm promotional budget that includes signing Strictly Come Dancing judge Alesha Dixon as brand ambassador, the brand is the best-selling lighter-style wine in the UK.
"There is plenty of research to support the consumer demand for lighter-style wines," says Steve Barton, Brand Phoenix UK director, who has tipped the market to more than double to [pounds sterling] XXm in the next four years.
"For a number of years, people have been pre-mixing drinks at home to make a lighter-style wine. We have seen the popularity of spritzers in the on-trade filter through to the off-trade, so providing consumers with ready-made lighter-style wines was a massive area to exploit."
As with beer, operators believe value considerations, as well as lifestyle, are a driver of lower-abv wine sales. EfUSS Continental Wine & Food's X% abv Silver Bay Point brand holds the top spot in the British wine category, with a XX% volume market share of off-trade sales [Nielsen MAT to May 2011]. The [pounds sterling] X.XX price of a XXCI bottle offers scope for ongoing 'two for [pounds sterling] X' promotions, and the brand has recently added Morrisons to listings that already include Tesco, Bargain Booze, Budcreris and Londis.
Vicky Lee, trading and marketing controller at CWF, believes value is a big factor in the brand's success. "Over the next XX months, CWF will be investing over [pounds sterling] X.Xm in support for the Silver Bay Point brand, capitalising on the current market conditions to grow market share," she says.
Lower-abv wine has struck a chord with retailers, too. "We are seeing lots of innovation," says Waitrose wine buyer Katie Mollett. "We will be introducing some new lower-alcohol wines later this year, and we plan to develop our range further in 2012."
In a bid to capitalise on growing interest i in lighter wines, Halewood International is relaunching its X.X% abv Botany Creek j range, with a new XXCI bottle shape and red, white and rose variants. "A lighter wine broadens the occasionally, making it suitable to drink and enjoy at different I times of the day and as a lighter option with food," says Richard Clark, director of innovation at Halewood.
Rival supplier Accolade is equally upbeat about the prospects for lighter wines. It launched Banrock Station Light Rose and Chardonnay Sauvignon Blanc (rsp: [pounds sterling]X.XX/XXXml) in August. At X.X% abv, they have one unit of alcohol and XX calories per r XXml glass - XX% less than the equivalent volume of standard wine. Accolade plans to introduce a red wine later this year and is backing the range with a [pounds sterling] Xm marketing push. With its sights set, in particular, on female wine drinkers aged XX to XX, it hopes the launches will boost the category from X% to XX% of the wine market within five years.
That may be a tad ambitious - but with so many brands leaping on the lower-abv bandwagon at the moment, it will be interesting to see just how many drinkers do lighten up in the next five years.
RELATED ARTICLE: TAKE-HOME SALES
* The alcoholic drinks category has grown X% to [pounds sterling] XX.Xbn, but volume sales have slumped X.X% - increased duty, VAT and 'true' price rises disguise the fact that shoppers have bought less.
* Beer and lager have been the main causes of the volume decline. They are attracting fewer shoppers, while existing consumers are buying less, largely due to a shift towards smaller pack sizes.
* Cider, the best-performing sub-category, has historically driven its performance by adding shoppers - but in the past year more frequent, slightly larger purchases have driven growth.
* Still wine remains byfarthe largest sub-category, with a current value share of XX.X%, up X.X%. Volume growth is down slightly (X.X%).