UK lager has had its day, says Mintel

By Neil Merrett

- Last updated on GMT

Related tags: Alcoholic beverage, Mintel

Recent assumptions that a current slump in UK lager sales is a
temporary effect of British weather have been questioned by a new
report that predicts long-term difficulties ahead for the industry.

Some of the leading players in UK lager production have said that heavy downpours in the country over June and July were the main reason for significantly dented earnings in their operations. One such brewer is Scottish & Newcastle, which produces brands such as Foster's and Kronenbourg 1664. However, the declines may be the result of more than just bad weather, with Katy Child, senior market analyst at research group Mintel, suggesting that UK consumers will drink on average 11 litres or 19 pints less of the product by 2012. The new findings will make difficult reading for the country's brewers, who may face the possibility of having to enter new markets to ensure future profitability in their operations. A five per cent decline in lager volume sales since 2005 is expected to fall by a further eight per cent up to 2012 to 3.65bn litres, according to Mintel. As a result, the value of the market this year is expected to decline by four per cent to £10.9bn (€16m) from the levels recorded in 2005. Mintel suggests therefore that the industry should brace itself for bumpy times ahead. "The traditional lager lout, with his beer belly and pint in hand, may be becoming a rarer breed here in theUK, as the lager market has well and truly lost its head,"​ she stated. Pointing to the group's findings, Child suggests that changes in how the UK consumes its beverages is creating greater opportunities for other types of alcoholic drinks. "[UK drinkers] are increasingly looking for different drinks for different occasions, such as wine with a meal, cocktails in the evening and champagne for a special celebration,"​ she stated. "As people are much more aware of the wide choice available, drinkers now realise that there is more to life than just a pint of lager,"​ Only two in every 10 UK adults now drink lager, with one in five men, long viewed as the traditional consumer of the product, left enjoying the tipple, according to Mintel. However, not everyone in the alcohol industry will lament such a shift in consumer demand. Cider is experiencing some of the strongest sales in an entire decade with sales volumes rising 14 per cent in just the last two years, the report said. According to Mintel, changing perception of the fruity beverage means that one in five consumers surveyed now views cider as an all year thirst-quencher and not just a summer novelty. Along with cider, the fortunes of wine producers are also on the rise, with volume sales up six per cent between 2005 and 2007. Key to this growth has been rosé wine, once derided amongst connoisseurs, which posted sales volume growth of 188 per cent to 49bn litres since 2005. This increasing popularity has been driven by consumer demand for sweeter tastes amongst consumers, and perceived dietary benefits, according to Child. "These drinks are also often seen as less calorific, whether this is true or not, so people who are watching their waist will often choose these lighter alternatives over a pint of lager,"​ she stated. Besides changing tastes, a rapidly changing retail environment, will also take its toll, according to the research. "No doubt, this year's smoking ban in public places will impact further on our drinking habits, not least for lager which has always been best served down the pub with the lads,"​ Child added. Lager is a type of beer that by tradition is stored in barrels before being served.

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