Beer Writer Analysis

Looking at the latest BBPA figures for the on-trade sector, there are two clear front runners that have gained market share and achieved volume growth in the beer category over the past 12 months: stout and premium lager. In the cask category, premium ale is significantly outperforming standard ale. 

Typically, all beers classified as ‘premium’ demand a much higher price point on the bar than other categories, such as standard cask ale, or lager. Why, in a time of economic instability and a cost-of-living crisis are premium beers performing so well? 

One theory is that sales of affordable luxuries rise in economic downturns. When big ticket items become unaffordable, consumer psychologists claim people attempt to boost their mood with small treats: the so-called lipstick index, coined by Estée Lauder's Leonard Lauder. Applying this to the beer category, it could be argued that the growth in stout and premium lager is related to people rewarding themselves with a ‘luxury brand’ rather than a generic standard beer. 

With less disposable income, drinkers are also looking for a reassurance of quality. Brands that invest heavily in quality initiatives are seen to deliver good value for money. While the beer might cost more, satisfaction is guaranteed, and this has an impact on the overall category. 

As an example, Guinness has long been seen as a leader on quality, and its commitment to ensuring a perfect pint of the black stuff has benefited other brands moving into the nitro-stout space. 

Variable quality has been cited as one of the reasons why the cask category is in trouble, but we can’t ignore the saturation this sector has experienced over the past 20 years. In 2000, there were approximately 500 active breweries in the UK: by 2023 this had risen to 2,570. In the same period, the number of pubs in the UK shrank from over 60,000 to 45,000 (source: BBPA). Even the most amateur economist will recognise this situation is unsustainable and inevitably there have been casualties along the way. 

It's interesting that the cask brewers who have focused on the quality aspect of a flagship brand and are uncompromising on price outperform those who lead on discounted deals to drive distribution. Timothy Taylor’s Landlord is a great example of a brand that can command a higher price point on the bar next to similar strength beers, and still outsell every other brand of cask ale available. 

Within the craft ale sector, the strategy of bigger brands snapping up the smaller operators with a loyal fan base is very divisive; think Heineken and Beavertown, or AB InBev and Camden. Among devotees, this provokes outrage and accusations of ‘selling out’. But without these partnerships, there is a real risk that the smaller brands could disappear altogether. Heritage brands such as Leffe and Affligem would not exist today were it not for the intervention of global brewers. By growing distribution, the craft beer sector has evolved from a niche category into the mainstream consciousness of drinkers. 

One to watch: whilst no and low alcohol beers only make up a tiny percentage of total beer volume, sales have risen exponentially since the pandemic. According to Mintel (2023), “Six in 10 UK adults now avoid or limit their alcohol consumption, and four in 10 now regularly choose a low or no alcohol option”. In pubs, sales of low and no-alcohol beer have more than doubled since 2019 (source: BBPA). The product quality and availability of this category has undoubtedly contributed to its increase in market share, and demand is only set to increase.

Annabel Smith

Annabel Smith is an award-winning educator, writer, and broadcaster. She was a licensee for ten years before moving to a training role at Diageo GB. She is currently Head of Training at the Cask Marque Trust and is a freelance Beer Sommelier operating as BeerBelle.