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KN15344
KEY NOTE Market Report Plus : Premium Lagers, Beers and Ciders : December 2004
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This report covers: premium, beers, lagers, ciders,

Companies covered include: Carlsberg UK,Coors Brewers, GreeneKing, Scottish & Newcastle, The Wolverhampton & Dudley Breweries,Budweiser, Diago, Heineken, Merrydown, SAB Miller, Thatcher Cider company,

TABLE OF CONTENTS

Executive Summary
 
1. Market Definition
REPORT COVERAGE
MARKET SECTORS
Premium Lagers
Premium Beers
Premium Ciders
Market trends
The Decline of Session Drinking
Increase of Consumer Sophistication
Contraction of Market Share and its Influence
Competition from Other Drinks in the Youth Market
Growth of Wine and Drinks With Meals as An Alternative
ECONOMIC TRENDS
Population
Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 1999-2003
Gross Domestic Product
Table 2: UK Gross Domestic Product at Current and Annual Prices (£m), 1999-2003
Inflation
Table 3: UK Rate of Inflation (%), 1999-2003
Unemployment
Table 4: Actual Number of Unemployed Persons (million), 1999-2003
Household Disposable Income
Table 5: Household Disposable Income Per Capita (£ and %), 1999-2003
MARKET POSITION
UK Position
Table 6: Share of the Lager/Beer and Cider Market in the Total UK Alcoholic Drinks Market (£m and %), 2003
Overseas Position
 
2. Market Size
THE TOTAL MARKET
Table 7: The Total UK Premium Drinks Market by Value (£m at rsp and %), 1999-2003
BY MARKET SECTOR
Premium Lagers
Table 8: Retail Price Indices for Lager/Beer by Distribution Channel (June each year), 2001-2004
Premium Beers
Premium Ciders
 
3. Industry Background
RECENT HISTORY
INDUSTRY SYNOPSIS
Table 9: Industry Synopsis for UK Brewers (£000 and %), 2003
Number of Companies
Table 10: Number of UK VAT-Based Enterprises Engaged in Brewing, 1999-2003
Employment
Table 11: Number of UK VAT-Based Local Units Engaged in Brewing by Employment Sizeband (number of employees), 2003
REGIONAL VARIATIONS IN THE MARKETPLACE
DISTRIBUTION
Table 12: Retail Distribution Outlets for Premium Drinks by Value (%), 2003
HOW ROBUST IS THE MARKET?
LEGISLATION
KEY TRADE ASSOCIATIONS
British Beer & Pubs Association
The National Association of Cidermakers
 
4. Competitor Analysis
THE MARKETPLACE
Table 13: Market Share of Leading UK Brewers, Cider Makers and their Premium Brands by Value (%), 2004
MARKET LEADERS
Scottish & Newcastle PLC
Company Structure
Current and Future Developments
Financial Results
Interbrew UK Ltd
Company Structure
Current and Future Developments
Financial Results
Coors Brewers Ltd
Company Structure
Current and Future Developments
Financial Results
Carlsberg UK Ltd
Company Structure
Current and Future Developments
Financial Results
Constellation Europe Ltd
Company Structure
Current and Future Developments
Financial Results
OTHER COMPANIES
Budweiser
Diageo PLC
Greene King PLC
Heineken
Merrydown PLC
SABMiller
Thatcher Cider Company
Wolverhampton & Dudley Breweries PLC
OUTSIDE SUPPLIERS
Packaging
Raw Materials
MARKETING ACTIVITY
Media Advertising
Table 14: Main Media Advertising Expenditure on Premium and Other Beers and Cider (£000), Year to June 2004
Other Marketing Activity
 
5. Strengths, Weaknesses, Opportunities and Threats
Strengths
WEAKNESSES
Opportunities
THREATS
 
6. Buying Behaviour
consumer PENETRATION
Table 15: Penetration of Selected Alcoholic Drinks (premium or other) (% adults), 1996, 2002 and 2004
PENETRATION OF LEADING BRANDS
Table 16: Penetration of Major Drinks Brands by Sex, Age, Social Grade and Region (%), 2002
 
7. Current Issues
BRAND AND COMPANY DEVELOPMENTS
PRICING ISSUES
BINGE DRINKING AND THE NEW LICENSING REGIME
 
8. The Global Market
INTERNATIONAL COMPARISONS
GLOBAL MERGERS
 
9. Forecasts
INTRODUCTION
Population
Table 17: Forecast UK Resident Population by Sex (000), 2004-2008
Gross Domestic Product
Table 18: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2004-2008
Inflation
Table 19: Forecast UK Rate of Inflation (%), 2004-2008
Unemployment
Table 20: Forecast Actual Number of Unemployed Persons (million), 2004-2008
FORECASTS 2004 to 2008
Table 21: The Forecast Total UKPremium Drinks Market by Value (£m and %), 2004-2008
FUTURE TRENDS
 
10. Company Profiles
Carlsberg Uk LTd
Coors Brewers Ltd
Greene King Plc
Scottish & Newcastle Plc
The Wolverhampton & Dudley Breweries PLC
 
11. Further Sources
Associations
General Sources
Government Publications
Bonnier Information Sources

EXECUTIVE SUMMARY

The rise of premium brands within the broader markets for beers and ciders has been a feature of the UK market for alcoholic beverages for nearly 20 years, dating back to the launches of numerous premium lagers in the 1980s. It is a trend that reflects the adaptation of UK drinkers to a more international style of drinking — choosing lagers and ciders with quality ingredients and a higher alcohol content than the UK's traditional ales and ciders.
 
In 2003, the market for premium drinks was valued by Key Note to be worth £13.8bn, representing 69% of the total market for lagers, beers and ciders. This share has already risen from under 60% in the late 1990s, and is forecast to reach nearly 80% by 2008. Many standard-strength brands are struggling to survive, as consumer sophistication favours the premium brands, which are usually stronger in alcohol as well as being promoted on a quality platform. (Higher rates of taxation on the stronger drinks makes it inevitable that they carry a higher price-tag.)
 
Industry changes are contributing to the growth of premium brands, particularly in regard to lagers, where five brewers now account for over 90% of the UK market. Their enormous marketing budgets are concentrated on flagship brands such as Stella Artois (InBev, formerly known as Interbrew), Budweiser (Anheuser-Busch), Carlsberg Export, Heineken and Kronenbourg (Scottish & Newcastle PLC). These are all foreign brands of lager, although Scottish & Newcastle PLC owns Kronenbourg, originally from France.
 
Scottish & Newcastle PLC, the UK's largest brewer, added further to industry concentration in 2003 when it purchased Bulmers, the UK's top cider maker, with a market share of over 60%.
 
In contrast to the contracting number of major brands involved in premium lager and cider production, is the expanding distribution of premium beers, particularly the real ales from regional brewers such as Greene King PLC (Old Speckled Hen, Abbot Ale) and Fuller's (London Pride). These premium real ales will help to sustain interest in traditional brewing.
 
Cider is forecast to remain a cyclical market, and premium ciders — along with some premium lagers and beers — could benefit in the next few years from a consumer move away from the novelties popular during the early 2000s, such as ready-to-drink cocktails and `shots'.

Text © 2004Key Note

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