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Premium Lagers, Beers & Ciders Market Report 2009
Key Note Publications Ltd, June 2009, Pages: 108
The term `premium' has more than one connotation when applied to alcoholic drinks such as beer and cider. It may refer to drinks of a stronger strength. Premium lager is usually 5% Alcohol By Volume (ABV) or more, compared to `standard' lagers, which have under 4% ABV. The extra alcohol can push the lager into a higher tax band, but brewers may in any case decide to price it at a premium by promoting it as a superior product (ingredients, method of manufacture, etc.). Premiums can therefore be either high in alcohol or high in quality, giving them a retail price premium.
Under either definition, premium lager was the major growth sector of the whole beer category for a 20-year period from the mid-1980s, overtaking the UK's indigenous dark beers and the standard-strength lagers to become a market worth £11.1bn by 2006. This was equivalent to 84% of all lager sold and nearly 60% of the total beer market. Since then, however, the premium category has stalled, partly due to fashion changes, and also as a result of the launch of sub-premium brands. Sub-premiums are classed as beers between standard and premium strength; examples include Beck's Vier and Stella Artois 4%, both 4% ABV and extensions of successful existing premiums.
The dark beer sector comprises a variety of real ales, both on draught and packaged in the retail trade. Made by regional brewers, brands like Old Speckled Hen, London Pride and Marston's Pedigree have won national followings. Demand for dark beer is declining, however, so the premium ales market is fairly static at just over £3bn.
Proving its status as a cyclical market over several decades, cider has once again become popular. Its success in the 2000s has come from standard strength ciders (4.5% ABV), albeit including brands promoted with a premium image. The cider boom of 2005 to 2007 came from drinking `over-ice' ciders as mainstream drinks, but the small volume of premium cider (quality cider made to over 5% ABV) has also benefited from the interest in cider and features interesting niche products such as Thatchers' Katy (made only from the Katy apple) or Aspall's Suffolk Organic.
Consolidation in brewing has created even larger multinationals than ever before; this in a market that was already heavily globalised. AB InBev of Belgium, for example, now owns top-selling international lagers such as Stella Artois, Beck's and Budweiser, as well as local UK brands such as Tennent's and Boddingtons. In 2008, the UK's largest brewer, Scottish & Newcastle (S&N), was divided up between two other international giants, Carlsberg and Heineken. (S&N also owned Bulmers, by far the largest UK cider maker, now owned by Heineken.)
Given these ownership changes and the trend towards mid-strength lagers and ciders, the prospects for the premium category are muted, with far fewer lager brands likely to be promoted in the future. Ironically, premium dark beers could benefit from lower support from multinational owners with the standard dark beers, benefiting small-scale UK brewers. Cider as a whole is likely to lose some of its fashionable status, but the boom has been beneficial in introducing UK drinkers to some interesting and high-quality ciders from `craft' makers, and could benefit from a renewed emphasis on pear cider
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