How licensees stock and merchandise bottled beers - from premium packaged lagers to the fast-growing ales and organic brews - can have a major effect on sales.
Bottled beers have always filled an important role in the licensed trade. At the simplest level, a range of bottled beers enables a pub to provide beers which it would not be economic or even possible to stock on draught, although we've come a long way since the days when that meant light ale and barley wine.
In the far-off days when most local pubs either brewed their own beer or mainly sold the output of the local brewery, bottled beers also enabled drinkers to experience different beer styles. In a sense, that is still the case, although today the main economic drivers are the development of global brands and the demand from consumers for new products.
The growth in popularity of premium packaged lagers, or PPLs, has enabled brands such as Budweiser, Becks and Holsten to make inroads into the UK market over the past decade or so.
The downside of this is that the diverse range of beer brands available has increased consumer expectations of new brands and different products. PPLs are now not just competing with each other, or draught beers, but with new drinks categories, notably flavoured alcoholic beverages (FABs) such as Bacardi Breezer and Smirnoff Ice.
Merchandising your range
Effective merchandising of bottled beers in the backbar and chiller cabinet is vital to maximise the sales potential of the sector, according to Interbrew, which owns the Stella Artois brand among many others.
Allan Tudor, on-trade sales director at Interbrew UK, says: "Effective merchandising is vitally important because it ensures retailers are maximising the sales potential of the bar area. Supermarkets have been using merchandising for years because they realise how big an impact it can have on their sales performance. It is now time that on-trade retailers follow their example through putting greater emphasis on merchandising.
"Merchandising can have a major influence on the brands that consumers choose. This can encourage more consumers to trade up to premium categories and brands - boosting the value of bar business in the process."
The company advises licensees to make the most of their backbar area with eye-catching displays of high-margin brands. At the same time, they need to ensure that anything that cannot be sold, glasses for example, is out of sight of the customer.
Selling from the chiller
The chiller is another prime selling area for bottled beer and Interbrew's research shows that a chiller which is well merchandised with recognisable brands has a 30 per cent greater chance of being noticed by consumers.
Licensees can maximise chiller opportunity by:
- Stocking a balanced range: consumers find too much choice off-putting and even the most demanding are satisfied with a range of eight or nine PPLs. This should include a mixture of Continental, easy-drinking, and fashionable styles, a pils brand and a speciality product.
- Spacing to sales: Allocate space according to the profit potential, volume sales and the needs of your customers. Identify poor performers and rationalise the range - giving more space to the highest-margin and best-selling lines. Efficient use of chiller space will also result in fewer out-of-stocks and reduce stock holding.
- Facing up for success: Multiple facings blocked horizontally have a significant impact, and research proves that sales increase according to the number of facings used.
- Siting premium brands at the top: Where a brand is sited in the chiller can have an impact of as much as 50 per cent on visibility. The top shelf is the key selling area while the top-right shelf is the optimum selling position so it makes sense to site the most profitable brands here.
Premium bottled ales
The merchandising lessons learnt from the supermarkets in the PPL category may also point the way to another potential growth area for sales of bottled beer - premium bottled ales. This is currently one of the fastest growing beer categories in the off-trade, thanks mainly to the merchandising success supermarkets have enjoyed by putting a diverse and interesting range range of bottled ales on display.
Regional brewers have enjoyed particular success in this category, with brands such as Greene King's Old Speckled Hen, Marston's Pedigree, Hall & Woodhouse's Tanglefoot and Shepherd Neame's Bishop's Finger finding a new market among home drinkers.
The take-off of this market over the past 18 months or so has been quick enough to create some surprises. Young's has just announced a programme of promotional support for Waggle Dance ale, which the London brewer acquired from Vaux two years ago.
Despite very little advertising, bottled sales of the brand have grown by 27 per cent over the past year. Young's is hoping that with co-ordinated support, Waggle Dance can go on to even greater things.
However, bottled ales still tend to be a neglected category in the pub trade. There are a number of good reasons why this may be the case: tied agreements which limit the opportunities for beers from regional brewers, pressure on fridge space from PPLs and FABs, and the fact that pubs which have a significant number of "real" ale drinkers among their customers are more likely to meet the demand through cask rather than bottle conditioned ale.
Nevertheless, premium bottled ales also offer some real advantages:
- served from the fridge, bottled ales meet consumer preference for cooler drinks
- they appeal to a more discerning, higher spending consumer than PPLs
- they command a premium price
- there is consumer interest in the category, creating an opportunity to recapture sales lost to the off trade.
One possible reason for pubs' resistance to premium bottled ales may that the standard size, 500ml, is slightly awkward - too big to hold and drink from comfortably, but pouring the contents into a pint glass loses some of the brand's credibility.
Aiming to overcome this difficulty, Scottish Courage is currently test-marketing a 330ml bottle of its flagship bottled ale Newcastle Brown in Manchester pubs and bars.
The smaller-sized bottle is firmly targeted at converting on-trade PPL drinkers. Brand manager Sanjay Patel said: "The new pack format will put us in direct competition with premium bottled lagers and will encourage trial among first-time Newcastle Brown drinkers."
Keeping bottle conditioned beers
Bottle conditioned beers are probably an unfamiliar product to publicans more used to handling PPLs.
The difference is basically the same as that between cask ale and keg bitter. Rather than finishing the fermentation process in the brewery, the beer - normally an ale - continues to ferment in the bottle.
Enthusiasts claim this creates a more satisfying beer with a fuller flavour. However, like cask ale, bottle conditioned beer requires careful handling, and generally has a shorter shelf life - although certain brands are said to age well, like fine wines. It can also be a slightly unpredictable product, although the consistency has improved immensely in recent years due to improvements in bottling techniques.
Organic and vegetarian beers
Bottled beers give pubs the opportunity to cater to a wider range of consumer tastes. Sales of organic beers have grown at a rate in excess of 250 per cent over the past two years - which sounds impressive until you remember that the growth has been achieved from a very small base.
So while sales are still relatively small, organic beers meet consumer demand for natural products. Freedom Brewery, the London micro brewer which won CAMRA approval