Breweries & the Beer Market - Market Report 2008
Key Note Publications Ltd, September 2008
In 2008, the acquisition of Scottish & Newcastle PLC (now Scottish & Newcastle Ltd [S&N]), the largest UK brewer, has taken the share of the beer market held by foreign companies to more than 85%. The buyers were two multinationals, Heineken of the Netherlands and Carlsberg of Denmark, typifying the cross-border deals that now characterise global brewing.
After dividing up S&N, Carlsberg took the company's overseas interests and Heineken took on the domestic business, which incorporates a 30% share of the UK beer market, with brands including Foster's, John Smith's and Newcastle Brown, as well as the Bulmers ciders. The Heineken brand, already well established in the crucial premium lager segment of the market, will be pushed forward against other foreign competitors and their lager brands, such as InBev (with the Stella Artois and Beck's brands), Carlsberg (with Carlsberg Export and Kronenbourg) and Coors (with Carling and Grolsch).
The multinationals entered the UK market to fill a gap left by the once powerful `big six' domestic brewers (Whitbread, S&N, Bass Charrington, Allied Breweries, Courage Imperial and Watneys), which combined brewing with running enormous public house (`pub') estates. This traditional model of pubs being `tied' to a brewer is still evident at a regional level, where smaller brewers have merged to produce larger pub estates and have put muscle behind marketing domestic beers. The three `pan-regional' forces are Greene King, Marston's and Wells & Young's (W&Y).
The beer market as a whole is now in decline, and faces higher taxation, competition from other drinks (e.g. cider and wine) and an uncertain future for many pubs (which are still the main outlet for beer, even in the wake of smoking bans across the UK and price increases).
There are also attitudes towards health to consider. In response to the growing concern over alcohol and its connection to poor health, there have been several high-profile launches of lower-alcohol beers since 2005. However, beer still held a 44% share of all UK spending on alcohol as at 2007, and it will always remain a substantial market. Although international lager brands now dominate the mainstream market, micro-brewing continues to thrive, maintaining the UK tradition for `real ales'.
Executive Summary
1. Market Definition
REPORT COVERAGE
MARKET SECTORS
MARKET TRENDS
Long-Term Trends
Trends in the 2000s
ECONOMIC TRENDS
Population
Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2003-2007
Gross Domestic Product
Table 2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2003-2007
Inflation
Table 3: UK Rate of Inflation (%), 2003-2007
Unemployment
Table 4: Actual Number of Unemployed Persons in the UK (million), 2003-2007
Household Disposable Income
Table 5: UK Household Disposable Income Per Capita (£), 2003-2007
MARKET POSITION
The UK
Table 6: Beer in the Total UK Alcoholic Drinks Market by Value at Current Prices (£bn at rsp and %), 2007
Overseas
2. Market Size
THE TOTAL MARKET
Table 7: The UK Beer Market by Value at Current Prices and Volume (£m at rsp, million litres and £ per litre), 2003-2007
Figure 1: The UK Beer Market by Value at Current Prices (£m at rsp), 2003-2007
Growth Factors
Variations by Trade Channel
Table 8: Retail Price Indices for Beer (index 2003=100), 2003 and 2006-2008
BY MARKET SECTOR
Lager Versus Dark Beers
Table 9: The UK Beer Market by Sector and Channel by Value at Current Prices (£bn at rsp and %), 2008
Standard and Premium Lagers
Types of Dark Beer
Leading Brands by Sector
Table 10: Examples of Beer Brands by Market Subsector, 2008
PRODUCTION AND OVERSEAS TRADE
Table 11: Production of Beer in the UK by Volume (million litres), 1998-2007
3. Industry Background
Recent History
Number of Companies
Table 12: Number of UK VAT-Based Enterprises Engaged in Brewing by Turnover Sizeband (£000, number and %), 2002-2007
Employment
Table 13: Number of UK VAT-Based Local Units Engaged in Brewing by Employment Sizeband (number and %), 2007
REGIONAL VARIATIONS IN THE MARKETPLACE
Table 14: Brewers by Regional Location, 2008
DISTRIBUTION
Table 15: UK Retail Distribution Channels for Beer by Value at Current Prices (£m at rsp and %), 2001, 2003, 2005 and 2007
HOW ROBUST IS THE MARKET?
LEGISLATION
Distribution Legislation
European Legislation and Taxation
KEY TRADE ASSOCIATIONS
British Beer & Pub Association
Other Organisations
4. Competitor Analysis
THE MARKETPLACE
Table 16: Market Shares in UK Brewing by Value (%), 2008
MARKET LEADERS
Table 17: Leading Beer Brands by Subsector, 2008
Scottish & Newcastle Ltd
Company Structure
Current and Future Developments
Financial Results
Coors Brewers Ltd
Company Structure
Current and Future Developments
Financial Results
InBev UK Ltd
Company Structure
Current and Future Developments
Financial Results
Carlsberg UK Ltd
Company Structure
Current and Future Developments
Financial Results
OTHER INTERNATIONAL COMPANIES
Heineken
Diageo
Miller Brands UK (SABMiller)
DOMESTIC/REGIONAL BREWERS
Greene King PLC
Marston's PLC
Wells & Young's Brewing Company Ltd
OUTSIDE SUPPLIERS
Importers and Agents
Packaging and Presentation
Production Supplies
MARKETING ACTIVITY
Main Media Advertising Expenditure
Table 18: Main Media Advertising Expenditure on Beer (£000), Years Ending March 2005-2008
Lager
Table 19: Main Media Advertising Expenditure on Leading Lager Brands (£000), Years Ending March 2006-2008
Lager `Personalities'
Dark Beers
Table 20: Main Media Advertising Expenditure on Leading Dark-Beer Brands (£000), Years Ending March 2006-2008
Dark Beer `Personalities'
Other Marketing Activity
Exhibitions
5. Strengths, Weaknesses, Opportunities and Threats
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
6. Buying Behaviour
CONSUMER PENETRATION
Table 21: Penetration of Beer by Type and Packaging (% of adults), 1994 and 2004-2007
BEER DEMOGRAPHICS
Lager
Table 22: Penetration of Lager by Sex, Age, Social Grade and Region (% of adults), 2007
Dark-Beer
Table 23: Penetration of Dark Beer by Sex, Age, Social Grade and Region (% of adults), 2007
BEER AND OTHER ALCOHOLIC DRINKS
Table 24: Favourite Alcoholic Drinks (% of adults), 2008
LEADING BEER BRANDS
Table 25: Selected Drinks Brands Consumed at Least Once a Month (% of adults), 2004 and 2007
7. Current Issues
Introduction
MERGERS and ACQUISITIONS
BEER DISTRIBUTION DEVELOPMENTS
8. The Global Market
PRODUCTION AND CONSUMPTION
GLOBALISED BREWING
9. Forecasts
The Economy
Population
Table 26: Forecast UK Resident Population by Sex (000), Mid-Years 2008-2012
Gross Domestic Product
Table 27: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2008-2012
Inflation
Table 28: Forecast UK Rate of Inflation (%), 2008-2012
Unemployment
Table 29: Forecast Actual Number of Unemployed Persons in the UK (million), 2008-2012
FORECASTS 2008 to 2012
Table 30: The Forecast UK Beer Market by Value at Current Prices and Volume (£m at rsp, million litres and £ per litre), 2008-2012
Figure 2: The Forecast UK Beer Market by Value at Current Prices (£m at rsp), 2008-2012
market growth
Figure 3: The UK Beer Market by Value at Current Prices (£m at rsp), 2003-2012
FUTURE TRENDS
Market Trends
Future of Scottish & Newcastle
Other Possible Brewery Mergers
Consolidation in Regional Brewing
10. Company Profiles
Anheuser-busch Europe Ltd
Carlsberg Uk Ltd
Coors Brewers Ltd
Diageo Plc
Greene King Plc
Heineken (uk) Ltd
inbev Uk Ltd
Marston's Plc
Scottish & Newcastle Ltd
wells & young's brewing company ltd
11. Further Sources
Associations
General Sources
Government Publications
Bisnode Sources
Anheuser-busch Europe Ltd
Carlsberg Uk Ltd
Coors Brewers Ltd
Diageo Plc
Greene King Plc
Heineken (uk) Ltd
inbev Uk Ltd
Marston's Plc
Scottish & Newcastle Ltd
Wells & young's brewing company ltd
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