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Bottled Ale

                                                          Premium Bottle Ale continues to deliver growth
                                                          Welcome to the 2011 Premium Bottled Ale (PBA) report from
                                                          Marston’s Beer Company. This report provides an overview of
                                                          category performance, dynamics and insights into consumer
                                                          behaviour. Its findings are based on independent market data
                                                          from AC Nielsen, Kantar Worldpanel and insights from our own
                                                          shopper and ale drinker understanding and awareness studies.
                                                          Despite a background of the toughest economic backdrop in many
                                                          generations, pressure on shelf space and competition from deeply
                                                          price promoted multi-packs of Lager and Cider, premiumisation in the
                                                          ale market continues and over 135,000 new shoppers have been
                                                          recruited to PBAs in the last year.
                                                          The PBA category continues to outperform the beer market delivering
                                                          YOY growth in both volume (+3.4% MAT) and value (+6.9% MAT)                            The Off Trade ale market continues to under-trade
         Contents                                         within the UK grocery retail sector, which now represents over 80% of
�                versus its on trade share by nearly 3:1 and our
         02                                               the market.
�                                                                          own studies show that shopper penetration for
         Introduction                                     The sector continues to benefit from the consumer trend towards
�                      the PBA category can be improved further.
         03–05                                            drinking at home which has led to Beers, Wines & Spirits (BWS)
�                       This should be a key objective for retailers given
         Market Trends                                    now becoming the largest sub sector of the UK grocery retail market
�                  that PBA shoppers deliver a higher average
                                                          worth £10.8billion.
�                                                                  basket spend than shoppers from any other
         Market Overview                                                                                                                         category of beer.
                                                                                                                                                 By working together to further differentiate the
         08–09                                                        Leading Brewers – Bottled Ale (MAT)
         Brand Performance                     Market Share Market Share (%)
                                                                   (%)                                     Volume % Chg YA                       range
                                                                                                                                 Volume % Chg YA of single bottles and multi-packs, making
                                                                      Market Share (%)                      Volume Change (%) YOY                improvements to fixture navigation, merchandising
                                                                                                                                                 standards and implementation of appropriate
         Ale Drinker Insight        MARSTONS PLC       MARSTONS PLC             17.8           MARSTONS PLC
                                                                                                       17.8                     PLC
                                                                                                                      MARSTONS 3.7               3.7
                                                                                                                                                 promotional mechanics, both brand owners and
                                      HEINEKEN UK        HEINEKEN UK      14.0                   HEINEKEN UK
                                                                                               14.0                     HEINEKEN UK
                                                                                                                     -0.8                  -0.8  retailers can continue to gain value.
         Range and Merchandising                                                                                                                 As the category leader with five regional craft
                                                                                                 GREENE KING -10.1      GREENE KING -10.1
         18–19                        GREENE KING        GREENE KING     13.3                13.3
                                                                                                                                                 breweries, we continue to offer an unrivalled
         Promotion and Pricing                                                                                                                   range of differentiated brands to meet consumer
                               HALL & WOODHOUSE   HALL & WOODHOUSE8.4                 8.4 HALL & WOODHOUSE       HALL & WOODHOUSE
                                                                                                                    -1.4                  -1.4
         20–22                                                                                                                                   demand for authentic local beers and are
         Marston’s Portfolio              FULLERS             6.8
                                                             FULLERS              6.8                FULLERS                   2.8
                                                                                                                            FULLERS              committed to working with our customers

                                                                                                                                                 to deliver continued growth.
                                        WELLS & YOUNG'S                6.5
                                                              WELLS & YOUNG'S          6.5          WELLS & YOUNG'S            WELLS & YOUNG'S
                                                                                                                                           4.9         4.9
         Executive Summary
                                       SHEPHERD NEAME        SHEPHERD NEAME
                                                                     6.4               6.4         SHEPHERD NEAME                       0.8
                                                                                                                               SHEPHERD NEAME    0.8

                                                                                Source: AC Nielsen Scantrack MAT to Dec 2010                       James Coyle
                                                                                                                                                   National Sales & Marketing Director

02   | Premium Bottled Ale Report 2011
Market Trends

Switch from On to Off Trade                                                                                  2000                                                                                          UK Beer Sales
drinking continues momentum                                                                                  1800


The long term consumer trend towards drinking at home is accelerating.                                       1400

More beer is now sold for consumption at home during key retail events such                                  1200

as Christmas and last year’s World Cup. The landmark of more beer being                                      1000

consumed at home, rather than in the pub should be reached within the next                                     800

12 months.                                                                                                     600

Last year’s World Cup event saw the largest ever production of beer for                                        400
                                                                                                                                                                                           On trade                                                    Off trade                                                                Source: BBPA
consumption at home. Although an autumn of ever present deeply price                                           200

promoted larger packs of lager and cider does provide evidence that retailers                                     0
                                                                                                                       07            7          07             7             08            8          08             8             09             09             09               9            9             10            10               0
                                                                                                                     20            00         20             00            20            00         20             00            20             20             20               00           00            20            20               01
were over supplied for the event.                                                                               ua
                                                                                                                               il 2
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                                                                                                                                                                                                                                                          ne                be
                                                                                                                                                                                                                                                                                                                    ne                be

                                                                                                                                                     Oc            Ja
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                                                                                                                                                                                                                           n            M                                 em          ce
                                                                                                                                                                                                                                                                                        m          M                                em
                                                                                                                                                                                                                                                                        pt                                                        pt
                                                                                                                                                                                                                                                                      Se            De                                          Se
The trend has supported the rise of Beers Wines & Spirits (BWS) to becoming
                                                                                                                      Lower prices are accelerating the consumer trend
the biggest sub category of the UK Grocery Retail market worth £10.8billion.
                                                                                                                      Whilst lifestyle factors of greater comfort and convenience have been fuelling this
                                                                                                                      move for a number of years, the recent economic downturn has seen lower prices
                                                                                                                      accelerate the trend.
                      GB Mult Grocer Sub Categories Value (£m)
                                                                                                                      52% of bottled ale drinkers say they are now drinking more at home than in the
TOTAL BEERS WINES & SPIRITS                                                                         10816	            pub over the last 12 months*. The main reason given for the change is cheaper
                                                                                                                      prices (33%) over greater comfort (17%) and convenience (13%).
           TOTAL GROCERY                                                                          10434

          TOTAL DAIRY/DELI                                                                 9417

    TOTAL HEALTH & BEAUTY                                                           7238
                                                                                                                      Beer continues to see taxation
        TOTAL HOUSEHOLD                                                      6441
                                                                                                                      ahead of inflation
                                                                                                                      Duty on beer has increased by 26% over the last 3 years and despite a change
     TOTAL CONFECTIONERY                                              3740
                                                                                                                      in government, the 2% duty escalator will remain in place for 2011, meaning a
      TOTAL FROZEN FOODS                                             3483                                             further increase in excess of 5% is likely in March. This swiftly follows the 2.5%
                                                                                                                      increase in VAT at the start of the year.
              SOFT DRINKS                                            3478
                                                                                                                      This will further support the trend toward drinking at home as grocery retailers are
             TOTAL BAKERY                                   2060                                                      better placed to reduce the impact of increased costs of production and duty on
                                                                                                                      consumer pricing.
          TOTAL MEDICINES                   801

                              Source: AC Nielsen MAT to 25.12.10	�                                                    *Source: Marston’s Ale Drinker survey base: 400 drinkers

                                                                                                                                                                                                                                                        Premium Bottled Ale Report 2011                                                         | 03
     Market Trends

     The Ale category continues to                                                                                                          Premiumisation of the

                                                                                                                                                                                                                                                                          Source: Kantar Worldpanel Shopper numbers GB Mults and Co-Ops 31st Oct 2010.
     under-trade in the Off trade                                                                                                           Ale market continues                                                                           100+k

     In volume terms the ale category continues to significantly under-trade in the off                                                     The trend from lower abv standard ‘session’
     trade compared to the on trade by a factor of 3:1.                                                                                     ale into higher abv ‘crafted’ Premium Ale has
                                                                                                                                            continued despite the economic downturn,
     Ales’ share is taken by both lager and cider having a proportionately higher weight                                                    which has seen consumers trade down in                                                   Premium Bottled Ale
     of purchase, largely driven through a focus on regular deeply price promoted                                                           other categories.                                                                          and Canned Ale
     multi-pack promotions in the major multiple grocers. More shelf space has also
     been allocated to Cider at the expense of Ale over the last 18 months in some                                                          Premium Bottled and Canned Ale continues to                                             Standard Canned Ale
     grocery retailers.                                                                                                                     grow its share of the total ale market through
                                                                                                                                            recruiting over 100k more shoppers to the
                    On Trade                                                                     Off Trade                                  category in the last year, whilst Standard
                                                                                                                                            Canned Ale has lost over 210k shoppers.

                                                                                                20%                                                                                                                                         -210k
                                                                      Cider              2%
                                                On Trade              Stout                                    Off Trade                    Consumers belief in what
                                                                                                              17%         10%               constitutes Premium is changing
                                                                30%                      Ale
                       58%                                                                              2%      69%
                                                                                                                                            Both PBAs and Cask Ale in the On Trade are benefiting from a consumer trend that
                                                                                                                                            is placing more value on produce from regional suppliers rather than well known
      Source: Nielsen DMSO Data to Dec 2010.                                             Lager
                                                                                                                                            established multinational brands. High quality ingredients are still seen as the main
     However with less reliance on larger pack promotions to generate volume,71%
                                                                                                                                            indicator of premium value which also suits PBAs more ‘crafted’ product appeal.
                              Bottles Premium value to retailers per unit sold
     the PBA category continues to deliver moreAle Bottles Premium Lager
     through a focus on single bottle sales.
         retail selling

           price*                                 £2.89/Litre                                  £2.02/Litre                                                       43%

                                         Average                     Bottles Premium Ale             Bottles Premium Lager                                                36%

       Premium Ale 
                     retail selling                                                                                                                                                                                     32%

                                         price*                        £3.00/Litre                          £2.14/Litre                                                                             29%

       continues to 

       deliver more 
                        Bottles Premium Ale                     Bottles Premium Lager

         generating                                                                                                                                                                                       15%
       value for the 
                                      153 Premium Ale

         index (VGI)**                   Value                 Bottles                               115 Premium Lager
                                         index (VGI)**                           144                              102
                                                                                                                                                           HIGH QUALITY                   LOCALLY               FAIRTRADE                WELL-KNOWN
                                                                                                                                                           INGREDIENTS                   PRODUCED                                          BRAND

      *Source: Nielsen Data to April 2009. **VGI = Value Generating Index, the power of product to generate value through each unit sold.                       2005            2007         2010                           IGD Shopper Trends 2010, base main shoppers

04   | Premium Bottled Ale Report 2011
Bottled Ale continues to recruit
Over 135k more shoppers YOY

     Shopper Numbers (millions)




                                                                                                                   Canned Ale                                 Ale Bottles

























                                                                                                                                                                      Source: Kantar Worldpanel, 31 Oct 2010 52 W/e data
                                                                                                                                                                                        Base: Off trade filtered to Multiples

Premium Bottled Ale continues
to deliver high value shoppers
to retailers                                                                                                                                                                                                                     Ale Shopper Average basket spend (£)
                                                                                                                                                                                                                                Average ale shopper Basket Spend (£)

The PBA category has continued to recruit over 135k new shoppers YOY.                                                                                                                                   51
These shoppers continue to represent high value customers for retailers                                                                                                                                 50
characterized by:                                                                                                                                                                                       49
                                                                                                                                                                                                        48                                                                                 47.48
~            A higher spend per basket than shoppers from any other beer category                                                                                                                       47                                                               46.67
~            A high trip frequency with most purchases consumed within 3 days                                                                                                                           46                                        45.42
~            A higher dwell time at fixture of 82 seconds v. BWS average 63 seconds                                                                                                                     45
~            A higher conversion rate to shopper purchase of 83% v. BWS                                                                                                                                 44
             average 66%                                                                                                                                                                                43
~            A higher unit weight of purchase of 2.7 units v. BWS beer average of 1.42                                                                                                                  42
                                                                                                                                                                                                                                                Size of Total Grocery Basket

Source: Marston’s SBXL 2010 Shopper Survey                                                                                                                                                                                        Bottled Ale           Canned Ale             Lager      Stout

                                                                                                                                                                                                                                                                        Premium Bottled Ale Report 2011   | 05
     Market Overview

     Take home drinks category development
     Total off trade value % change vs. LY
                                                                                                                                                                                The decline of the total Ale category
                                                                                                  % -/+                                                                         is driven by the continuing decline of
                                % -/+
                                                                                           Premium Ale Total +2.8%                        Standard Canned Ale.
        Total Liquor              4%                                               Lager           4%                          Bottle
           £14,362m                                                           £2,987m                                                                           1.3%            Premium Ale is growing at +2.8%
                                                                                                                                                                                with Premium Canned Ale showing
          Total Beer            3%                                                    Ale          -1%                                                                          an increased rate of growth in the last
                                                                                                                               Premium                          7.1%            6 months as Premium Ale shoppers
                Wine                                                               Stout           2%
                                                                                                                               £74m                                             are recognising it delivers a better
             £6,297m                                                               £116m                                                                                        value proposition for higher weight of
                                                                                                                                                                                purchase (see overleaf).
               Spirits                                                                                                         Standard            -6.1%
             £3,379m                                                                                                           £180m
                                                                                                                                                                                Grocery retailers now deliver
                Cider                                                                                                                                                           over 80% of the total Take
                                             9%                                                                                Source: Nielsen Scartrack/DMSO MAT to Dec 2010
               £781m                                                                                                                                                            Home Ale market.
                RTDs              13%

     Retailer Share of Bottled Ale
�                                                                      Retailer Sales Mix (Ale)                         � Ale Bottles � Premium Ale Cans � Standard Ale Cans
                Total Tesco                                                 21.6                                                                                                  4.5
                                                                                                                   32.1                                                          24.2                    31.1
                Total Asda                                     14.8                                       80%                        39             42.1
                                                                                   24.8                                                                              48                     41.3

          Total Sainsbury's                                           18

            Total Morrisons                             12.2                 % Spend share   �                                                                                               4.1

                                                                                                                                                                                                                         Source: Kantar Worldpanel to 31 Oct 2010
                                                                                                                                   23.2             14.6
                                           5.3	                                 Value sales 

                                                                             % change YOY �               40%

         The Co-Operative              5.0
             Total Waitrose                       9.3                                                              46.3
                                                                                                          20%                                       39.7
                                                                                                                                   34.6                             34.8
     Total Hard Discounters                              13.2
                                                           14.5                                            0%
         HARD DISCOUNTERS                                                                                        Sainsbury's       Tesco	         Morrisons         Asda        Waitrose    Co-Op   Hard Discounters

06   | Premium Bottled Ale Report 2011
Ale category dynamics

Premium Bottled and Canned Ale now delivers 56% of market value and 44%
of market volume. Premium Ale is on course to overtake Standard Ale in volume
terms within 18 months.

30% of                                                                                                                                                                       70% of
volume                                                                                                                                                                      volume
(429,000                                                                                                                                                           (936,000 barrels)
                                                                                                                                                                       56% of value
                                                                                                  Bottled        Canned
44% of value
                                                                                                   Ale      Vs     Ale
                                                                                                                                                                             *VGI 81
*VGI 144
                                                                                                                                                                   72% of standard
89% of volume from                                                                                                                                               volume from the 3
premium brands                                                                                                                                                     national brands

Growing market recruiting new shoppers                                                                                                  Standard Canned Ale represents a mature
with a low level of brand consolidation                                                                                            market with a declining number of shoppers and
                                                                                                                                                          high brand consolidation
~      An additional 135k shoppers recruited YOY
                                                                                                                                                     ~ Lost over 220k shoppers YOY
~      50% of volume from the top 10 brands in
       the category                                                                                                              Premium Canned Ale provides only area of growth

                                                                                                                   ~ Represents 15% of volume (211,000 brls) and 16% of value (£74m)

                                                                                                                                           ~   Growing at 6.4% volume and 7.1% value

Source: Nielsen Data to Dec 2010
* VGI = Value Generating Index, the power of a product to generate value through each unit sold

                                                                                                                                                      Premium Bottled Ale Report 2011   | 07
     Brand Performance

     Top 25 Bottled Ales                                                                                                  Top 12 Premium Canned Ales
     GB Mult Grocers                                                                                                      GB Mult Grocers
                                         Size        Development Importance     Volume Drivers           Avg RSP                                     Size        Development Importance      Volume Drivers            Avg RSP
                                         MAT            MAT         MAT       Avg ROS Distribution        Per Litre                                  MAT            MAT         MAT       Avg ROS      Distribution     Per Litre
                                        Volume         Volume      Volume      (litres)  Share              (£)                                     Volume         Volume      Volume      (litres)      Share            (£)
                                      (000’s Brls)      % Ch        Share     Per Store/                                                          (000’s Brls)      % Ch        Share     Per Store/
                                                                              Per Week                                                                                                    Per Week
      TOTAL COVERAGE                                                                                                      TOTAL COVERAGE
     TOTAL BOTTLED ALE                   359.6           3.4       100.0       106.7         99.7            3.0          TOTAL CANNED ALE           181.7           9.3       100.0        58.4           93.7           2.1
     Old Speckled Hen                    31.1           -5.3        8.7         10.4         89.3            2.9          Old Speckled Hen           40.1           31.0        22.1        16.4           74.0           2.2
     Newcastle Brown                     30.2            7.4        8.4          9.6         94.4            2.6          Mcewans Export Ale         31.3           -1.5        17.3        15.6           62.7           1.9
     Hobgoblin                           15.8           11.4        4.4          5.9         81.6            2.8          Tanglefoot Bitter          15.2           16.6        8.4          7.2           64.1           2.1
     London Pride                        14.2           15.1        3.9          5.5         78.5            3.1          Marston’s Pedigree         12.6            1.9        6.9          6.2           62.3           1.9
     Spitfire Ale                        11.1           24.7        3.1          4.8         69.8            2.7          Bombardier                 11.8           123.9       6.5          8.1           44.6           1.8
     Theakston Old Peculier              10.6           -4.5        2.9          4.0         80.3            3.2          Bass Ale                   11.8           -29.1       6.5          7.5           48.3           1.9
     Bombardier                           8.6           12.4        2.4          3.6         74.0            2.9          Greene King Abbot Ale      10.0            3.4        5.5          6.9           45.0           2.2
     Badger Fursty Ferret                 8.5           27.0        2.4          3.5         72.7            2.8          Ruddles County              8.8           -32.0       4.8          5.0           56.2           2.2
     Black Sheep                          7.7            5.1        2.1          3.3         71.2            3.0          London Pride                8.0            6.6        4.42         5.7           46.9           2.6
     Greene King Abbot Ale                6.9           -12.0       1.9          3.9         70.1            2.9          Newcastle Brown             7.4           37.1        4.1          6.3           35.4           1.9
     Mcewans No. 1 Champion Ale           6.8           -7.1        1.9          3.1         66.9            3.0          Hobgoblin                   7.2           52.5        4.0          5.3           44.4           2.3
     Bishops Finger Str Kentish Ale       6.7           20.7        1.9          2.9         69.1            2.8          Wadworth 6x                 4.1           21.1        2.3          9.3           13.8           1.9
     Badger Golden Champion               5.9            8.1        1.7          2.7         68.2            2.9                                                                            Source: AC Nielsen scantrack to Dec 2010

     Marston’s Pedigree                   5.7           -15.3       1.6          2.6         70.9            2.8
     Marston’s Old Empire IPA             4.8            8.9        1.3          2.4         59.0            2.9          Over 80% of the ale market is represented by the
     Tanglefoot Bitter                    4.8            5.5        1.3          2.2         67.1            2.8          major multiple retail operators. We have used AC
     Directors Bitter                     4.2           120.9       1.2          2.1         59.3            2.8          Nielsen’s read of this sector of the market, rather than
     Marston’s Classic Ales               4.2           227.2       1.2         12.8         12.5            2.5          its total market read to indicate brand performance
     Badger Golden Glory                  4.1           -6.0        1.1          2.0         61.5            2.8
                                                                                                                          as it based on actual scantrack EPOS data.
     Ruddles County                       3.7            8.4        1.0          1.9         58.4            2.8          In the last 6 months of 2010 the majority of Premium
     Innis & Gunn                         3.5           -5.9        0.9          1.7         64.8            4.3          Ale brands who share a bottle and canned SKU have
     Marston’s Headbrewers Choice         3.4           23.4        0.9          4.1         29.6            2.5          seen evidence of a consumer ‘flight to value’ with
     Fullers Organic Honey Dew            3.3           -2.7        0.9          2.2         45.4            3.1          growth in their Premium can variant outperforming
     Brakspear Oxford Gold                3.0           13.3        0.8          2.0         46.2            2.9
                                                                                                                          their bottle variant. This is most significant in the case
                                                                                                                          of market leader Old Speckled Hen where its can
     Banana Bread Beer                    2.8            8.7        0.7          1.5         54.9            2.8
                                                                                                                          growth of 31% has come at a time when its bottle
                                                                               Source: AC Nielsen scantrack to Dec 2010
                                                                                                                          variant has declined at -5%.

08   | Premium Bottled Ale Report 2011
Brand developments and opportunities
Smaller 330ml multi-pack formats                            Flavoured Beers
The leading category brands often lose sales and            Although not included in PBA market statistics,
are under represented due to the high frequency of          the growth of flavoured ‘beers’ such as Crabbie’s
out of stocks in the single bottle fixture. Additionally,   shows consumer potential to develop the flavoured
cost inflation is making the existing 500ml 4pk format      beer sub category. Given many retailers are
less commercially appealing to consumers verses the         merchandising these products in the PBA fixture it
single bottle multi-buy mechanic or 4-pack can option.      also has the potential to recruit new shoppers from
                                                            other categories who could be converted into trial
A switch to a 330ml bottle multi-pack format provides
                                                            of genuine PBAs.
the option to deliver more availability of key brands
with an attractive sub £5 price point. This works in
conjunction with the 500ml multi-buy mechanic
                                                            Continued growth of ‘something special’
and provides a competitive price point versus
premium cans.
                                                            The continued growth and proliferation of a number
This will also provide a solution for brewery mixed
                                                            of niche higher abv, highly crafted ‘Something
packs popular for gifting and the increasing trend
                                                            special’ brands and brand extensions such as
in home social sharing occasions.
                                                            Old Crafty Hen, King Goblin and Marston’s VSOP
                                                            continue to provide an opportunity to deliver
                                                            increased value through price differentiation.
Genuine Cask Ale at home innovation
Following a breakthrough in Cask Ale innovation
it is now possible to deliver genuine, fresh Cask           Selective regional ranging
Ale in a take home friendly format. fastcask™
                                                            Consumers are increasingly valuing local produce
technology developed by Marston’s has made the
                                                            as a sign of a premium product. The provision of
delivery of minicask’s possible for the first time.
                                                            a selective ‘local range’ provides the opportunity
Suited towards an event occasion, this format
                                                            to capitalise on this trend and drive more value. In
can provide a niche opportunity to drive more
                                                            many cases a well known regional brand from a
value and has more potential for online shopping,
                                                            respected brewer will also drive a higher rate
given the supply chain complexity of handling
                                                            of sale.
a shorter shelf life product.

                                                                                                               Premium Bottled Ale Report 2011   | 09
     Ale Drinker Insight

     At home drinking occasions
     Five distinct occasions each demand specific qualities from a drink. The diversity of ale
     makes it suitable for all drinking occasions.

                                        At Home Private Life                                             At Home Social Life
                                     “I was just having a drink”                                   “Staying in is the new going out”

                                                                                                 Sharing &                          Sharing &
            Refreshment                   Winding Down                   Treating
                                                                                                 Savouring                          Sessioning

         After sport/playing               Winding down,           Having my own space       A small get together           A sociable up tempo
       with the kids, having a             getting over a          and treating myself to     with friends/family,          gathering of several
       break from housework/                stressful day           something special       at your home or theirs,               friends.
           gardening/DIY                                                                       often with food or               Indoor party,
                                                                                               linked to an event           barbecue or a warm
                                                                                                                            up before a night out

             Standard and                 Premium Cans and                                   Premium Cans and                       Standard and
                                                                   Premium Bottled Ales
             Smooth Cans                 Premium Bottled Ales                               premium Bottled Ales                    Smooth Cans

                                                                                                                      Source : Marston’s TH U&A study Base: 400 drinkers

10   | Premium Bottled Ale Report 2011
PBA drinkers are range drinkers – they have favourites, but also enjoy
variation and experimentation

           Principal Brand                          Occasional Brands                       Experimental Brands

 The brand they trust to deliver a         Brands they have tried in the past        Brands they have never tried before,
 quality drinking experience every         and enjoyed.                              but serve their need to experiment
 time. Probably the brand they also        Bought in multiples of single bottles.    and add to their drinking experiences.
 drink in pubs.                                                                      Single bottle purchase only.
                                           Enjoyed for a change from
 Planned purchase, bought for stock        ‘principal brand’.                        Always try something new from a
 in ‘bulk’. Enjoyed regularly and shared                                             brewer they know and trust, plus
 with friends.                             Enjoyed ‘semi regularly’ and shared
                                           with friends.                             any others that catch their eye.
 Ideal for the ‘relaxing’ and                                                        If liked will move to be an
 ‘socialising’ occasions.                  Ideal for the ‘relaxing’, ‘socialising’
                                           and ‘treating’ occasions.                 ‘occasional’ brand.
 Their ‘tried and trusted’ brand.                                                    Ideal for the ‘treating’ occasion.

                                                                                                   Premium Bottled Ale Report 2011   | 11
     Ale Drinker Insight

     Bottle buyers and drinkers

                                                                                                     Creatures of habit

                                         Represents 70% of footfall*                                 – Time taken to find
                                                                                                       out what they
                                         – Typically Male 35 – 64                                      like, and so have
                                                                                                       a repertoire of
                                         – An average age of 51                                        favourites
                                         – 84% shop alone

                                         – An average of 92 secs
                                           spent at fixture

                                         – 81% make a purchase                                                                               Anything new and quirky or
                                         – Average weight of purchase                                                                  recommended will generate interest
                                           2.9 units

                                                                                                                                                    Confident buyers – Likely
                                                                                                                                                    to make a spontaneous
                                                                                                                                                    purchase, swayed by POS
                                                                                                                                                    and special displays
                                         Prepared to be experimental
                                         with beer

                                         – claim to have tried everything
                                         – anything new and quirky or                              Experience of the product counts with
                                           recommended will generate interest                      information on beer styles, tasting notes
                                         – brewer’s reputation matters a lot                       and food matches of particular interest
                                         – provenance and locality also
                                                                                                              STYLE    India Pale Ale / 5.7% ABV
                                                                                                                 SEE   Golden
                                                                                                               SMELL   Citrus, Fruity, Hop
                                                                                                               TASTE   Citrus Hop, Sweet, Warming

                                          Source: Marston’s U&A Study & SBXL Shopper Survey 2010

12   | Premium Bottled Ale Report 2011
Bottle buyers – non drinkers

                                                                                           Enjoy shopping
                                                                                           – Seeking out bargains, influenced
                               Represents 30% of footfall*                                   by offers, promotions and likely to
                                                                                             be price sensitive across the trolley
                               – Typically Female 35-64
                                                                                           – Notice and respond to in store
                               – An average age of 50
                                                                                             displays and POS
                               – 62% shop alone

                               – An average of 58 secs
                                 spent at fixture

                               – 77% make a purchase

                               – Average weight of purchase
                                 2.3 units

 Looking for the reassurance
 of familiar brands
                                                                                              Usually buying what the
 – Less choice may be                                                                         drinkers want
   an advantage to them
                                                                                              – Easier fixture to navigate
                                                                                                with signposting of familiar
                                                                                                brands would benefit

                                Source: Marston’s U&A Study & SBXL Shopper Survey 2010

                                                                                                                                     Premium Bottled Ale Report 2011   | 13
     Ale Drinker Insight

                                 Drivers for brand selection                                                              Motivators when experimenting

                It is a brand I've tried                                                    53%                           Low price                                                       50%
                      before and liked

                       It is one of my                                                                               From a brewer
                                                                                 43%                                                                                                43%
                     favourite brands                                                                              I know and trust

                       It was on offer                                                                         From a brewer with                                                  42%
                                                                                41%                               good reputation

                                                                                                        It is a particular beer style                                         37%
                   It was good value                                     32%                         (e.g. organic, golden, blonde)
                       It was a brand
                        I buy regularly                         21%                                       An interesting promotion                                        33%

                It just caught my eye                    13%                                              It is a new style / flavour                       19%
                                                                           Key influences                                                                                       Key influences
                   It is a brand I had
                  bought before, but                  10%                                                           Brewed locally                         18%
               I don't buy it regularly                                Tried and trusted                                                                                  Brewer reputation
                                                                                                                 Good provenance
              It is my favourite brand                10%                                                               / heritage                         17%
                                                                       Value                                                                                              Price
                       It had the right                                                                    Strong / a high % ABV
                                                      10%                                                                                                16%
                       % ABV for me
                                                                                                                                                                          Beer style &
                 It was a brand I had
                                                      9%               Experimentation                         Brewed in particular
                                                                                                                                                      13%                 provenance
                    not bought before                                                                              region / locality

                               Source: Marston’s U&A Study Base: 400 Bottled Ale drinkers                                   Source: Marston’s U&A Study Base: 400 Bottled Ale drinkers

     PBA Shoppers are relying on more ‘tried & trusted’ brands and brewers
     Since our last report the economic downturn has become a major influence on                  from a known brewer, as well as reducing the financial risk involved through price
     shopper motivation. This can be seen by PBA shoppers’ more conservative attitude             promotion.
     towards experimentation with more reliance on brands and brewers who are ‘tried
     & trusted’ and an increased search for value.                                                Based on this insight, merchandising with brewery brand blocking, increasing the
                                                                                                  availability of key category driver brands and featuring a select range of well known
     Experimentation is still an intrinsic part of the PBA drinker’s experience and               and respected local regional brewers would create more effective ranging and
     enjoyment of the category, but they are looking to reduce the amount of risk                 merchandising solutions for PBA retailers.
     involved. This is primarily achieved through the re-assurance of selecting a brand

14   | Premium Bottled Ale Report 2011
        What the PBA shopper is looking for from a retailer                                          What the PBA shopper is not looking for from a retailer

              The lowest prices                                                          50%         Badly organised so that                                                       94%
                                                                                                        you can't find things
         My favourite bottled ale
                 is always there                                                       46%          Generally untidy displays                                                   89%

            A really wide choice
             of different brands                                                       45%             Boxes left on shelves                                                    89%

                      Tidy and                                                                             Not enough stock
        well-presented displays                                          32%                                                                                                    88%
                                                                                                          of the brand I want
    There are always some new
                                                                      28%                                Not enough choice                                                    83%
         brands to choose from

                There are a lot of
            different promotions
                                                              21%              Key influences            Brands out of stock                                                  82%

           My favourite brand is                                          Price                            Bottles difficult to
                                                            19%                                                                                                               82%
           available in multipack                                                                            reach / pick up
         Organised by beer style                                                                                                                                                        Key turn offs
                                                           18%                                         Too many promotions                                            68%
   (e.g. organic, golden, blonde)                                         Availability                                                                                             Poorly organised
          Having clerar product                       13%                                            I get confused by all the                                                     shelves
           information available                                                                  different brands and types                                        64%
          Bottled Ales are with                                                                                                                                                    Lack of choice
       other Beers (canned ale                                                                             Too much choice                       26%
                                                      13%                                                                                                                          & availability
                   lager / stout)

                          Source: Marston’s U&A Study Base: 400 Bottled Ale drinkers                                       Source: Marston’s U&A Study Base: 400 Bottled Ale drinkers

Value, availability and improved merchandising from retailers needed
Lower prices have inevitably become more important, as value is sought across all               Fixture navigation has improved since our last report through the signposting
grocery categories to alleviate the pressure of the economic downturn. However                  provided by Brewers’ shelf ready packaging, however out of stocks for key brands
availability of key brands and a choice from a wide range continue to feature highly.           across all retailers continue to be an issue. This could be addressed through
                                                                                                ranging a limited number of key brand multi-packs.
Well organised fixtures that are easy to navigate and locate key brands, together
with keeping the fixture fresh with ‘new news’ on both range and promotion are key
features for an effective retail offer.

                                                                                                                                                                    Premium Bottled Ale Report 2011     | 15
     Range and Merchandising

     The PBA fixture                                        Levels of shopper                                       Merchandising
     delivers a unique                                      penetration can                                         standards can
     shopper experience                                     be improved                                             be improved
     Unlike other categories of beer within BWS             Whilst the PBA category has continued to                Progress has been slow across most retailers since
     characterised by a commodity based ‘wallpaper’         recruit over 135k new shoppers YOY, our 2010            our last report highlighted the need to improve
     approach of large pack formats, the PBA fixture with   shopper survey has revealed that its penetration        merchandising standards. Compliance with shelf
     its focus on the single bottle format and multibuy     amongst total shoppers is still very low at 3%. This    ready packaging, introduced to reduce out of stocks
     promotion mechanic, delivers a more interactive        demonstrates there is still considerable potential to   by making re-stocking more efficient and effective,
     ‘pick & mix’ experience. One shopper described         attract more shoppers to the category.                  is inconsistent at best and often leaves an untidy
     it to us as a ‘male creche’ refuge whilst his wife                                                             display of trays.
                                                            Some retailers are addressing this by increasing
     completed the weekly shop.
                                                            cross category links through including PBAs in meal
     With a plethora of brand choice normally you           offers and merchandising alongside chilled ready
     would expect a lower conversion to purchase, but       meals to target the convenience shopper. Given
     our shopper survey has revealed the PBA fixture        that the PBA shopper delivers the highest average
     to deliver a comparatively higher dwell time and       basket spend within the beer
     conversion to purchase than the average for BWS.       category, this approach should
                                                            deliver more value to the retailer.
                   Shopper Dynamics
�                       Using key category driver brands
                     PBA Vs BWS
�                           to signpost the fixture with dual
                                                            sited merchandising units and
                      82s         2.7
                                                            encouraging local brewers to
                                              83%           deliver experiential sampling
                  TIME IN AISLE   AWOP      CONVERSION      activity would also be effective.

                      63s         1.4

                  TIME IN AISLE   AWOP      CONVERSION
                                                                                                                    Brand owners also have a part to play by maximizing
                                                                                                                    the potential of their shelf ready trays as an aid to
     PBA fixture delivers:                                                                                          navigation. This should receive greater focus given
                                                                                                                    that our shopper eye tracking analysis has revealed
       ~ Higher dwell time                                                                                          over 40% of navigation at fixture is delivered via
       ~ Higher rate of purchase                                                                                    SRP trays and a further 42% from POS promo
                                                                                                                    feature shelf barkers.
       ~ Higher weight of purchase

16   | Premium Bottled Ale Report 2011
Merchandise and range by drinker insight 

Include limited                                                                                                     Have a more
range of local                                                                                                      frequent rotational
brands ranged                                                                                                       range, with fewer
together.                                                                                                           facings of ‘guest’
                                                                                                                    beers reflecting
                                                                                                                    a mix of brewers/
                                                                                                                    styles to retain
                                                                                                                    freshness and ‘new
Key brands and
category recruiters
should be displayed
at eye-level making
them easier to find.

These ‘principal’
brands should also                                                                                                  Include wider range
include 4 pack and                                                                                                  of permanent single
larger multi-pack                                                                                                   bottle ‘occasional’
provisions where                                                                                                    brands and range
relevant to enhance                                                                                                 by brewery brand
availability and                                                                                                    blocking to reduce
support increased                                                                                                   risk and provide
weight of purchase.                                                                                                 shopper re-assurance
                                                                                                                    when experimenting.

Recommend a
minimum of two
facings of single
bottles for smaller
fixtures and four
facings for larger
fixtures to enhance
This can also be
supported by the
                       Ensure premium cans are          Inclusion of ‘well known’ brewery mixed
majority of shelf
                       merchandised in nearby           packs support increased weight of
ready packaging
                       fixtures, rather than separate   purchase and provide a more convenient
                       aisles to avoid lost brand       pack solution for the growing trend in social
                       sales through out of stocks.     sharing occasions for home drinking.

                                                                                                        Premium Bottled Ale Report 2011   | 17
     Promotion and Pricing

     Rising costs                                   PBA single bottle multi-buy
     support a switch                               continues to drive sales
     to smaller formats
     for multi-packs                                Nearly two thirds of shopping trips sees 2–4                          Weight of purchase for single PBA
                                                                                                                              occasions % breakdown
                                                    bottles purchased
     The recent increase in VAT, successive         The single 500ml bottle multi-buy promotional mechanic has
     increases in duty (reflecting a 26% rise in    long been a feature of the PBA fixture, suiting the range mentality        12%
     3 years) and a rise in production costs        of the shopper and continues to be successful in encouraging
     have driven the regular price points of        a higher weight of purchase, with the majority of shopping trips
     many x 4 multi-packs of Premium bottles        seeing between 2 and 4 bottles purchased.
     and cans towards £6 and above.
                                                    This long standing mechanic is responsible for the relatively
     This has resulted in many retailers            high rate of PBA sales sold on promotion (46.8%). It has been
     increasing promotional frequency to                                                                                                                    10+ bottles
                                                    successfully developed over the years to encourage the unique
     maintain healthy rates of sale and stock       ‘pick & mix’ feel of the single bottle fixture and has proved to
     turnover. This is demonstrated by the 11%      be a reliable and stable promotional mechanic.                             58%
     rise in the % of sales sold on promotion for
     Premium Canned Ale in the last 2 years.        Given inflationary cost pressures and the impact of the economic
                                                                                                                                                            5-9 bottles
                                                    downturn, a focus on regular ‘2 for’ and ‘3 for’ promotions will
     We will likely see another rise in duty of     deliver more accessible price tiers for consumers and have the
     5.5% or above in the next budget and a         benefits of reducing margin erosion and delivering more value.
     continued trend in cost inflation through      This also makes the price proposition of key brand multi-packs
     an increase in fuel and raw material costs                                                                                                             2-4 bottles
                                                    and brewery mixed packs (4 packs), much more attractive. If
     expected over the next year.                   aligned with a move to a smaller 330ml format a typical retail
     To alleviate the pressure of these trends      price point of under £5 is achievable. Encouraging sales in multi
                                                    and mixed packs would also help address the shopper ‘turn off’             28%
     a move to smaller formats such as 440ml                                                                                                                1 bottle only
     cans and 330ml bottles would allow             of stock outs on single bottles of key brands.
     for more attractive regular price points
     and less of a requirement for frequent
     promotional activity delivering more value
     to the category.                                                                                                       Mults & Co-ops

                                                                                                                               Source: Kantar Worldpanel 52 wk to 31 Oct 2010

18   | Premium Bottled Ale Report 2011
Increased promotion of Premium
Canned Ale is encouraging a
shopper ‘flight to value’ from Bottle
                                                                                                                             Premium Ale shopper share by format

Since our last report we have seen an increase in the amount of Premium Ale
shoppers who buy across both bottle and can formats. This group now represent
almost 1 in 4 shoppers but deliver nearly 50% of category spend. These shoppers
have a higher weight of purchase and are more value motivated.
                                                                                                                             Bottles                                                                                                 Cans
Over the last 2 years the percentage of Premium Canned Ale sold on promotion
has risen by 1/3rd in comparison to Premium Bottled Ale, which has remained                                      Buyer %                     49.2                                22.8                                                  28.1
largely static. This increase in promotional activity, aligned with cost inflation on                            Spend %                     23                                  49.5                                                  27.6
500ml bottle 4 packs, taking regular retail price points above £6, has encouraged
a ‘flight to value’ toward Premium Canned Ale.

As Premium Canned Ale delivers less value to the category, this trend if further
encouraged, will lead towards value erosion for the category as a whole. Evidence
of this can be seen in the recent comparison of growth rates between bottle and                                                                                                                                     Source: Kantar Worldpanel 52 wk to 31 Oct 2010
can on the chart below.

Further evidence is provided by the comparative growth rates of can and bottle
formats for relevant brands shown on page 8, highlighted by the market leading                                Premium Bottle Ale Growth-Value MAT (Grocery)
Old Speckled Hen brand growing at 31% in can but declining by 5% in bottle.

Brand owners and retailers need to work together to improve the comparative                 16.00                                                                                                                                      Ale Bottles
                                                                                                                                                                                                                                       Total Canned Ale
proposition of bottle and can multipacks to retain more value for the category.             14.00

   Percentage of Premium Ale sales on promotion                                             10.00
              2008 to 2010 (Grocery)                                                            6.00
                                      2008            2010                  +/-                 2.00

                     Premium          45.5            46.8                  +1.5                0.00






























                                      31.2            42.2                  +11






















                                                    Source: AC Nielsen Baseline Dec 2010                                                                                                                                                        Source: AC Nielsen Dec 2010

                                                                                                                                                                                                         Premium Bottled Ale Report 2011                                           | 19
     Marston’s Portfolio

     Brand Portfolio 2011

          5% abv Pale Ale   5% abv Pale Ale                4.5% abv Pale Ale               5.2% abv Ruby Ale 5.2% abv Ruby Ale         5.2% abv Ruby Ale
             (500ml)           (330ml)                        (New 440ml)                      (500ml)           (330ml)                  (New 440ml)

        5.7% abv 6.7% abv 4.5% abv 3.8% abv   5% abv     6.2% abv       Mixed 4pk & 12pk   4.5% abv   4.7% abv   4.2% abv   6.6% abv      Mixed 4pk & 12pk
        India Pale Pale Ale Stout    Bitter   Pale Ale   Pale Ale                           Blonde     Organic     Bitter    Special
           Ale                                                                               Beer     Pale Ale               Reserve

                             BREWERS OF PEDIGREE

20   | Premium Bottled Ale Report 2011
Brand Portfolio 2011

      4.6% abv              7.2% abv         3.6% abv                 5.6% abv         4.9% abv          5% abv        4.7% abv       5.1% abv        3.5% abv
       Organic              Ruby Ale           Bitter                 Strong Ale       Pale Ale          Pale Ale      Pale Ale       Dark Ale        Jennings
      Golden Ale                                                                                                                                        Bitter

                                                                        Beers from the New forest

Regional heritage range
                 Banks’s                                Mansfield     Marston’s Resolution           Manns                         Classic Ales

 3.5% abv
Original Mild
                3.5% abv          3.8% abv
                                                    3.6% abv Bitter     4.7% abv Low Carb Beer    2.8% abv Brown Ale      Mixed 12pk 500ml       Mixed 4pk 330ml
                 Original           Bitter

                                                                                                                                   Premium Bottled Ale Report 2011   | 21
     Marston’s Portfolio

     Marston’s PBA Portfolio

     A portfolio that delivers a
     national ale trail featuring
     some of England’s finest
     craft beers. A perfect match
     for drinker insight calling for
     choice and experimentation
     from a range of quality beers,
     reflecting different beer styles
     with well known brewery
     credentials and regional

22   | Premium Bottled Ale Report 2011
Executive Summary

This report represents a unique insight    Premiumisation in the ale market
into consumer and market trends in         continues and over 135,000 new
the growing Premium Bottled Ale            shoppers have been recruited to                 3 ways to ensure continued PBA growth:
(PBA) category produced by market          Premium Bottled Ale in the last year.
                                                                                           Increased category growth can be realised through acting on drinker insight:
leader Marston’s.
                                           The report also reveals that PBA
The report, compiled with independent      shoppers have a higher average                  Make PBA fixtures easier to navigate
market data from AC Nielsen, Kantar        shopping basket spend than shoppers             ~   Improving fixture navigation with more space for key category driver
Worldpanel and the BBPA, together          from any other beer category –                      brands and a system of brewery brand blocking would improve the
with Marston’s own shopper insight         delivering an average basket spend                  shopper experience and retain options for retailers to differentiate
survey, gives a positive outlook for the   of £50.60 v. £46.67 for Lager.                      their range.
Take Home market and Premium Ale
category in particular.                    The analysis suggests the continued
                                           success of the rapidly-developing               Increase shopper penetration to the category
The trend towards drinking at home         category still has a way to go to reach         ~    The PBA shopper delivers the highest average basket spend of any
continues, illustrated by more beer        its full potential – because despite                 beer shopper within BWS. More shoppers can be recruited through
now being consumed at home, rather         impressive growth, the ale category                  the use of key drive brands to signpost the category with dual sited
than in the pub for key events such as     significantly under-trades in the off                displays and cross category link promotions.
Christmas and last year’s World Cup.       trade compared to the on trade by a
                                           factor of 3:1.
                                                                                           Enhance PBAs offer for higher weight of purchase shoppers
This continuing trend has contributed
to Beers, Wines & Spirits (BWS)            The report recommends that retailers            ~   Developing multi-pack propositions with key brands to cater for
becoming the largest sub sector of the     can realise this opportunity through                higher weight of purchase shoppers should be addressed to avoid
UK grocery retail market and is now        working with experienced category                   their ‘flight to value’ from premium bottle to can.
worth £10.8billion.                        partners, like Marston’s, to create
                                           initiatives based on consumer insights
Despite a challenging trading              highlighted within the report.
environment, the PBA category
continues to outperform the beer
market, delivering growth in               For further information and any queries raised by this report, please contact the
grocery retailers (now representing        Marston’s Take Home Category Development Team:
over 80% of the market) in both
volume (+3.4% MAT) and value               Category Manager, Justin Way – justin.way@marstons.co.uk
(+6.9% MAT) over the last year.            Insight Manager, Thom Wilkes – thom.wilkes@marstons.co.uk

                                                                                                                                        Premium Bottled Ale Report 2011   | 23
     Marston’s Brewery Ale Trail
                                                                                                                   Established in 1875, to slake the thirst of
                                                                                                                Black Country workers fuelling the industrial
     Established in 1828 by John Jennings                                                                       revolution, Banks’s beers are brewed at the
     Snr, the Jennings brewery is based                                                                                      Park brewery in Wolverhampton.
     at the heart of the Lake District in
     the Cumbrian town of Cockermouth.
     Nestled between the rivers Derwent
     and Cocker, the
                                                                                                                                      Marston’s brewery is based in
     brewery uses
                                                                                                                                 Burton-Upon-Trent, renowned as the
     pure Lakeland
                                                                                                                                  home of British brewing, due to the
     water to deliver
                                                                                                                                  unique quality of its spring water for
     beers with a
                                                                                                                                   brewing ale. Throughout the world
     genuine taste of
                                                                                                                                      other brewers have to artificially
     the Lake District.
                                                                                                                                      “Burtonise” their brewing water,
                                                                                                                                 Marston’s don’t have to compromise.

Wychwood Brewery is located in the delightful
Cotswold market town of Witney, on the
fringes of the ancient medieval forest, the Wych
Wood, after which it is named. The brewers at                                                                        Brakspear beers have been brewed in
Wychwood, as well as                                                                                         Oxfordshire since the early 18th Century. When
being passionate about                                                                                           the original Brakspear brewery in Henley on
beer, have been inspired by                                                                                    Thames closed in 2002, Wychwood Brewery
characters from myths and                                                                                    took over brewing Brakspear beers with original
legends associated with the                                                                                                                brewing equipment
ancient Wychwood Forest                                                                                                                from Henley, including
to create a range of award                                                                                                                6 Victorian wooden
winning ales.                                                                                                                           fermenting vessels to
                                                                                                                                         preserve the famous
                                                                                                                                     Brakspear Double Drop
                                                                                                                                         fermentation system.
            Founded in 1978, Ringwood Brewery is Hampshire’s
            leading brewer, situated in the New Forest market
            town of Ringwood, on the site of the former 18th
            Century Tunks Brewery.

                                                                Marston’s Beer Company, Marston’s House, Brewery Road, Wolverhampton WV1 4JT

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