Six things you need to know about Beer & Cider

1. World lager is growing at +5.2% YOY in impulse

2. Impulse sales of low- and no-alcohol beer were up by +27% in Q4

3. Mid-size multipacks are driving growth, particularly in craft

4. Summer sun and Euro 2024 will see demand for larger multipacks rise

5. Premiumisation is driving cider sales, with value up by +2.6% YOY in convenience

6. Flavoured cider is down -13%, declining ahead of the total market 

1. World lager is growing at +5.2% YOY in impulse

With shoppers increasingly making healthier choices and cutting down on disposable spending, the beer and cider sector is jammed in a maelstrom of tough market conditions. The category is down by -7% year on year, due to a dip in both volume purchased and how frequently shoppers buy (Kantar).

The dip in sales is hitting independents the hardest. Alex Lawrence, senior strategic insight director for Circana, says symbols and independents are losing beer and cider volume share to multiple grocers.

However, there are opportunities for retailers to drive sales and the biggest one is in the premium and world sections of the market. “World beer share has grown by 8.2% over the past three years, driven by the introduction of Madri and Cruzcampo,” says Kenton Burchell, group trading director at Bestway. “Cruzcampo was the standout launch in 2023 and provided the blend of quality and value that consumers are looking for. It accounted for 1.4% market share in impulse by February 2024 [Nielsen].”

Retailers that can become known for quality world lagers outside of the norm will become a destination shop. “While there’ll always be demand for Mediterranean beers, I’d encourage convenience retailers to think beyond that and look further afield,” says John Price, head of marketing at Kingfisher Drinks. “There’s certainly considerable current interest in Japanese beers like Sapporo, but I’d also like to mention Indian beers like our very own Kingfisher.”

Retailer Sasi Patel, who owns multiple Go Local locations in Greater Manchester, has seen the growth in premium lines first hand. “Shoppers are prioritising premium brands over the likes of Fosters and Carling,” he says.

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2. Impulse sales of low- and no-alcohol beer were up by +27% in Q4

One area of the beer market that is thriving as customers look to moderate more often is of course low- and no-alcohol beer. “Forty-three per cent of UK drinkers say they are looking to moderate,” says Steve Young, sales director at Asahi. “The improved taste of no-alcohol drinks is helping them evolve from drinks that are a substitute to drinks that compete comfortably in the alcohol occasion.”

“We know that no- and low-alcohol beers are continuing to grow in popularity, so convenience retailers should grasp this opportunity and ensure they are catering for the increasing number of consumers who are looking for moderation,” agrees Kingfisher’s John Price.

The good news for retailers is that they can capitalise with just a handful of products. Bestway’s Kenton Burchell says: “Brand rankings have been shaken up. Guinness 0.0% is now leading the pack, with Heineken 0.0% and Peroni Nastro Azzurro 0.0% closely following. Nearly 50% of total Guinness brand growth has come via the 0.0% sub-brand, showing its positive impact on the brand and the stout category.”

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3. Mid-size multipacks are driving growth, particularly in craft

For retailers looking to drive beer sales, mid-sized packs of cans are the way to do it, according to Bestway’s Kenton Burchell. “They tend to have a greater uplift under promotion and enable retailers to hit key price points (£9.99) as customers continue to look for a blend of quality and value,” he says.

“Cans’ volume share of beer has risen by +4.1% pts when compared with four years ago [Nielsen],” adds Asahi’s Steve Young. “More recently, we have seen the can segment premiumise with the premium quality segment increasing its share of can by +2.9% pts vs two years ago, driven by new launches such as Peroni Nastro Azzurro 4x440ml [Nielsen].”

This pack format appears to be particularly effective at driving sales craft lines too, which now command a 1.2% share of the market in impulse stores, compared to just 0.7% three years ago [Nielsen].

“Multipacks are a key growth driver for the category, and we’ve placed our focus on mid-size multi-packs, as they’ve become more common within the consumer repertoire, particularly for socialising,” says Caitlin Brown, category executive at BrewDog. “BrewDog Mixed Packs have also been an important recruitment tool. Our research shows that 50% of first-time purchases come from multi-packs, and larger mixed formats significantly over index with first-time buyers [Brewdog].”

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4. Summer sun and Euro 2024 will see demand for larger multipacks rise

Larger pack formats can also play a footfall-driving role if your store has the space, without compromising your range of core convenience formats. Amy Sohal of Premier – Ken’s Convenience Store in Winsford, Cheshire, installed a beer cave two years ago during a refit, with the whole area refrigerated. “Customers really love having their beer and cider products chilled – it’s really helped drive sales,” she says. “It’s great when summer approaches as shoppers can buy beer and cider products for instant consumption. We prioritise a mix of multipacks and single formats. Packs of 18 are our most popular format, though.”

It’s a similar story in cider. Sally McKinnon, head of marketing at Westons Cider, says “Pack sizes tend to be smaller in this channel than in multiple grocery, with singles and four packs dominating the top 10 most popular products.

“That said, with floor and fridge space at a premium, there is certainly a role for larger pack formats, such as our Stowford Press 10 Pack (up +438.9% YoY in convenience (Circana)), especially great ahead of bank holidays and match days when cider sales spike. Cider in the summer gains about 3% share from beer and with the Euros and Olympics this summer [Westons], there’s a lot of opportunity for retailers to drive sales.”

However, she warns against stocking plastic bottled cider. “Retailers should be very wary of stocking ciders packaged in plastic bottles. This format, popular for value white and amber ciders, is associated with the cheaper end of the market, which shoppers have been moving away from for years now.”

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5. Premiumisation is driving cider sales, with value up by +2.6% YOY in convenience

Beer is not the only segment where premium lines are holding up the market. In cider, mainstream brands are falling away while heritage, craft, and premium hold firm. Speaking exclusively to Convenience Store, Westons’ head of marketing Sally McKinnon revealed that the cider category is now back at pre-pandemic levels, with apple flavours and crafted cider leading the charge.

“Traditional apple cider is increasingly stealing share from flavoured, growing at a rate of +6.5% YoY and now accounting for 64.1% of all retail sales. What’s more, the crafted sub-sector is experiencing phenomenal growth, accounting for 21% of total market share and growing at 12.2% YoY,” she says.

Like total cider, in convenience, Westons Cider Report shows that crafted is in robust growth at +5.8%, but it only has an 18% value share (3pp below total market), so there is still headroom for further crafted growth in the convenience channel, claims the firm. 

“Cider is experiencing a volume decline of -11.8% year on year, driven by the decline of mainstream cider such as Strongbow,” says Bestway’s Kenton Burchell. “More premium brands within the sector such as Thatchers, Henry Westons and Inch’s are continuing to provide growth, however, not enough to offset the decline we are seeing in the overall category.”

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6. Flavoured cider is down -13%, declining ahead of the total market

It wasn’t long ago where the calendar was marked by seasonal cider flavours coming in and out of fashion, with retailers and consumers alike waiting eagerly for the next flavour launch.

But now, as apple cider continues to go from strength to strength, the appeal of the flavoured market may be falling away. “Drinkers are moving away from flavoured ciders in favour of more traditional recipes. A prime example of this is Crumpton Oaks, which is the number-one value apple cider brand in impulse [Nielsen],” explains Calli O’Brien, head of marketing at Aston Manor Cider.

But there may still be opportunity for flavours that offer what shoppers are looking for. “At a total level, the cider category declined in the past year, driven mainly by lack of new shoppers and existing shoppers buying less often and less volume,” says Nicola Randall, head of marketing at Brothers Drinks Company. “Our research highlights that light, refreshing, natural cider products are the ones that convenience shoppers are going to increasingly turn to going forwards.

“The fruit-flavoured cider category has evolved significantly, and consumers are now more motivated by sessionable, easy-drinking flavours, and quality, authenticity, and sustainability than by quirky flavours. Palates have matured and flavoured cider drinkers now seek products with genuine provenance and brand values that they can align with.”

These are particularly important in summer and retailers are already gearing up for the increased sales warmer weather brings. “Sales will, of course, go up in summer,” says retailer Sasi Patel. “The key is maintaining high availability but it’s probably the one time of year you don’t need to promote as heavily. If the weather reaches 18+ degrees, our sales increase by about 80%.”

While the beer and cider market is gripped by challenges, there’s no doubt that come the summer, an increase in socialising will mean shoppers will turn to their local stores for premium brands and no- and low-alcohol options. Make sure your range is putting you in the best position to drive sales and profits.

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