Euro brewers pushing ‘niche’ regional product potential

By Neil Merrett

- Last updated on GMT

Related tags Beer

Consumer preference for seemingly innovative, locally sourced foods and drink is also influencing the European beer market, with a renaissance in craft label brands potentially offering some optimism in the economic downturn.

In the first part of an ongoing report, looks at whether the beer industry’s attempts to provide more regional and craft products amidst overall consumption falls in some established markets may feasibly offset earning concerns.

Industry experts from across Europe’s brewing industry suggest that as overall consumption at both pub and retail level falls amidst consumer spending fears, regional and craft brands are to some extent helping to buck the trend, albeit on a niche basis.

UK difficulties

Mark Hastings, communication director for the British Beer and Pub Association(BBPA), suggested that craft ales, usually produced at more traditional plants, remained a small category for the industry, despite growing consumer interest.

The claims come as the BBPA released figures suggesting that sales of beer at both on and off-trade levels across Britain had fallen for the first three months of the year by 8.2 per cent over the same period in 2008.

“It was a particularly bad quarter for sales in the off-trade (supermarkets and off licenses), with sales down 11 per cent,”​ stated the BBPA. “This is the third consecutive quarter in which off-trade sales have fallen.”

In this market, Hastings claimed that brewers of all sizes were looking to identify market trends that may boost earning particularly in light of the economic downturn. He claimed that this has led to both multinational and regional manufacturers to play up their craft beer products.

Euro push

Craft beers - or ‘real ales’ as they are sometimes referred to on the UK market - are also seeing burgeoning demand in various European markets according to trade association, the Brewers of Europe (BOE).

BOE secretary general, Rodolphe de Looz-Corswarem, said that although there were long-established markets for regional beers in markets like Germany and Belgium, even countries like France, traditionally more associated with wine consumption, was showing growing interest.

Looz-Corswarem said that craft ales, which that are often produced by small brewers and are therefore more flexible in their use of innovative ingredients or flavours, had been garnering attention from multinationals beer makers for some time.

Beer war

However, rather than fearing a potential beer war between smaller and larger brewers, the BOE claimed that among its members, multinational and regional brewers across the EU were part of an important balancing act.

Looz-Corswarem said that by operating alongside production of globally available branded products, the craft ale segment helps to create mutual benefits for the entire brewing segment.

“With a growing interest in culture and tradition, customers continue to demand and enjoy more niche products and brands,”​ he stated.

The BOE says that while small brewers can provide a good image of quality local products, big brewers can play up their reputation on a much more global basis, ensuring there was no interest in competing with the smaller brands.

Beyond simply protecting a potentially lucrative niche, the BOE said that larger brewers also had a strong reliance on providing a wide range of brands beyond a particular flagship product.

With a focus by brewers to enter a growing number of new markets, brewers were having to maintain existing local brands that may have a long tradition of consumption of certain markets.

To this end, Looz-Corswarem suggested that leading brewers like Heineken estimated that about only 20 per cent of their total brewing output amounted to production of their main namesake products.

He added that the rest of its operations were geared to meeting more specific tastes and needs on the current market.

In the next part of this report to be published on next week, some of the bloc’s leading brewers discuss the significance of the craft beer segment to their own operations.

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