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25-05-2017, 12:52
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Discussions about the recent sale of Charles Wells’ beer brands to Marston’s rather exposed the lack of knowledge about the wider beer market from many commentators whose expertise was predominantly at the cask and craft end of the spectrum. For example, some were inclined to pooh-pooh my contention that market presence in the Premium Bottled Ales sector was, if not the main driver behind the deal, a significant consideration.
One commenter said “I'd be surprised if the market for bottled brown beer is growing.” Thinking this was probably wrong, a little Googling led me to Marston’s most recent Premium Bottled Ale Market Report (http://www.marstons.co.uk/news/marstons-annual-bottled-ale-report-2016.aspx). Now, obviously this is written with the intention of promoting their products, but there’s no reason to believe any of the hard facts quoted in it are incorrect.
In 2015, the Premium Bottled Ales market was worth £538m, having risen by 92% over the previous six years. In the next five years, up to 2020, it is predicted to grow to £1 billion, a further rise of 86%. Now that certainly looks like a growth market to me. In contrast, the latest Cask Report (http://cask-marque.co.uk/cask-matters/cask-report-2016-17/) states that the annual value of the cask market is £1.7 billion, but over the past five years it has only grown by 6%. Currently, the PBA sector is worth 32% of cask, but if we assume the same level of cask growth to 2020, it will then be worth 55%.
The graphic below, taken from the Marston’s report, shows the Top 20 premium bottled ales by value. Nothing much there to excite the enthusiast, but that is what people out there beyond the beer bubble are drinking. It includes four Marston’s and four Greene King products, but only one from Wells, McEwan’s No.1 Champion Ale. It isn’t widely appreciated just how big a product this is.
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The overall beer market in the UK is declining. In the five years to the end of 2016, according to the BBPA statistics, total barrels sold fell by 6.5%. But, within this figure, the on-trade declined by 13.7%, while the off-trade rose by 1.5%, and that trend is only going to continue. The report also points out that ale and stout only account for 16% of off-trade beer sales, compared with 36% in the on-trade, so there is huge scope for growth if the figures are to be brought more in line with each other.
Of course in recent years all the excitement has been over the growth of the “craft” sector, but the report points out that the entire craft bottle and can sector only amounts to 8.7% of premium bottled ales, and 41% of that is one product – BrewDog Punk IPA. Very often, the main distinction seems to be bottle size, and there are a growing number of beers available in 500ml and stocked on the PBA shelves that, conceptually, surely qualify as “craft”, such as Saltaire Cascade Pale Ale and Adnams’ Jack Brand Ease Up IPA, which delivers a powerful dose of New World hops. And, if sales of craft ales grow and become more mainstream, then they are likely to increasingly to be subsumed within PBAs rather than sticking within their own category.
It’s also incorrect to think that the PBA sector is overwhelmingly composed of established, mature brands. There has been a substantial churn, with many new products being introduced, most notably in the category of golden ales. The biggest new product launch of 2014 was Hobgoblin Gold, worth £2.95m a year, and of 2015 Guinness Golden Ale, worth £2.16m. You may not think much of them, and indeed I find many of them to be rather wishy-washy, but that’s what drinkers are going for.
They may not set enthusiasts’ pulses racing, but in terms of market share Premium Bottled Ales continue to overshadow craft, and in the coming years they are likely to be the biggest area of growth in the ale market, if not the entire beer market.

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