Halting the Tide of Decline in the UK’s Beer Market

The UK beer industry is looking for a way out of its gloomy performance in volume sales. According to Euromonitor International, there was a 2% decline in 2013 in total volume sales, and that is reflecting a continuing impact upon the on-trade channel of various dynamics, such as an ageing demography and aggressive price competition from supermarkets. So, the industry keeps trying to increase beer consumption via marketing campaigns that widen drinking occasions at home and outside.

In the context of all of this, the industry is indicating a need for the repositioning of the role of beer in UK consumers’ shopping baskets and cuisines in order to boost volume sales. This is illustrated by the launch of a £10 million integrated marketing campaign in 2014 to encourage people to drink beer. The campaign is a food-pairing promotion called “There’s a beer for that”, which aims to encourage people to perceive beer differently with regard to the occasion by positioning it in a similar manner to wine.

This is not a new marketing strategy for the industry, as was seen in the beer industry’s 2013 attempt with the “Let there be beer” campaign, and a few others since 2003. The industry believes that the value of such marketing campaigns lies in reducing declines in the UK beer market’s volume sales. The industry does so by trying to attract back UK consumers who have stopped drinking beer and stopped going to pubs.

The campaign is mostly funded by the nation’s biggest brewers such as Miller Brands UK and InBev UK. It is also supported by key beer associations and various small/independent brewers: all players are united under the umbrella body, Britain’s Beer Alliance. The limits of the 2013 “Let there be beer” campaign were that it was narrow in its promotion, by concentrating on the brands of the biggest brewers, ie the biggest funders. But now the new campaign aims to encourage beer sales growth across the board with a universal beer campaign. However, this campaign is most likely to benefit beer sales with a craft or craft-like positioning. This is due to the craft beer market’s wider range of aromas and flavours, attributed to its experimental nature, which fits with the food-pairing dynamic and the accompanying foodie trend.

UK volume sales are expected to be gloomy over the 2013-2018 period, with a 1% CAGR decline, following the 2% fall in 2013, and the aforementioned campaigns alone will not work to halt the tide of decline. Such marketing campaigns must be complemented by a variety of strategies, such as investing in line extensions, rebranding efforts, and development of new product platforms, such as flavoured/mixed lagers, to keep consumers interested.

Now many UK market players are opting for a premium craft beer positioning in order to capture some of the craft beer demand. Opportunity for global brewers lies in the craft-branding of their current line or in developing new craft lines such as Diageo’s Guinness Dublin Porter example. Here, Diageo uses the St James Gate traditional brewing heritage and Dublin provinciality in order to impart a sense of tradition and authenticity akin to a craft beer brand.