Through a glass darkly

National brewers may be seeing their ale brands diminish, but regionals are performing well, as Graham Ridout found out Whenever the ale market is discussed it is almost inevitable that heads start to shake, slowly accompanied by deep, woeful sighs. It's true that the total beer market has been in decline for years. Over the past 15 years, consumer spending on beer has dropped by 20%, whereas spending on other alcoholic drinks has risen by 52%. In the on-trade, beer volumes have fallen from 27.6 million barrels in 1992 to 21.8 million barrels in 2001 (down 21%) with ales taking the brunt of the damage. Ale sales stood at 14.4 million barrels in 1992, but by 2001 had dropped to 8.5 million barrels ­ a disastrous 41% loss of volume. It's been even worse for cask ale, which has experienced consecutive falls of nearly 9% in 2000, followed by a further 8% in 2001. Since 1980, when cask sales accounted for 7 million barrels, volumes have fallen to around 2.8 million barrels in 2001 ­ equivalent to 8% of the total beer market and around 30% of the total ales market, according to British Beer & Pub Association figures. The figures for 2002 are due out shortly. Graham Page, consultant with market research specialist AC Nielsen, says his company's latest figures (to November 2002) suggest that when the full analysis for 2002 is finalised, it will bring more bad news with the ale sector down a further 7% to 8%. Looking at Nielsen's November figures is a sobering experience:

Premium nitrokeg (smooth/ creamflow) ales ­ down 25%

Standard nitrokeg ales ­ up 2%

Premium keg ales ­ static

Standard keg ales ­ down 8%

Premium cask ales ­ down 4%

Standard cask ales ­ down 13%. Keg beers still dominate the ales category with 60% of sales, followed by standard and premium cask ales with a combined share of 30%. The premium nitrokeg market is dominated by Caffrey's, which has around three-quarters of the market, thereafter it's Calder's with about a one-sixth share, followed by Beamish and brews from Wolverhampton & Dudley and Charles Wells. Page observes: "The standard cask-ale category is declining fast. A lot of the decline is coming from the national brewers but many of the regionals are doing quite well." He cites brands like Adnams Bitter, Fuller's London Pride, Shepherd Neame's Spitfire, Young's Bitter, Belhaven Best, Black Sheep's Best Bitter, and Caledonian's Deuchars IPA as examples of brands from regional brewers that are bucking the trend. Page says a good example of a regional doing well without having to rely on its own estate for sales is Adnams. "Only 7% of Adnams beer volume goes to its own 100 pubs, which shows it can succeed by selling to the free trade." The same thing is happening with super-regional Greene King. The Suffolk-based company re-ports some impressive increases in volumes for its key brands in November 2002, compared to November 2001. For example, Greene King IPA grew by 19%, Abbot Ale was up 22%, and Old Speckled Hen increased by 19%. Ruddles County was up over 50% compared with levels prior to the brand's relaunch in March 2001. He says another reason why regionals are are doing better than the nationals is a changing attitude among some pubcos. "You can replicate almost any other drink in the off-trade apart from cask ale and some pubcos are starting to realise that this means they have the chance of offering a point of difference to the opposition. Also, it is a way of getting the 40-year-plus customers back into the pubs. Generally, the town and city high-street market has concentrated on younger drinkers, but in the rural and community pub markets, cask ale is on a revival. We are seeing more and more people offering the likes of London Pride and Adnams Bitter ­ not the national brands." A further reason for the regionals and super-regionals, like Greene King and Wolves & Dudley, doing better than the nationals is that they are investing in the brands and backing this with advertising. "For years, there has been minimal or non-existing advertising done by the national brands. There has been no real spending by the number one premium cask brand, Bass, for years. The cask-ale market needs an industry leader." Page thinks this might change now that Bass is in the Interbrew stable. He is also encouraged that number two brand Marston's Pedigree is starting to advertise again, after its takeover uncertainty. Nielsen's consultant also thinks that the cask-ale brigade should rethink their pricing strategy. "If cask is real, proper, crafted beer, why isn't it priced as a premium quality?" While much of the news is doom and gloom, there are enough bright spots to suggest the ale market might be ill but it isn't terminal. It also shouldn't be forgotten that beer still accounted for 63% of all liquor sales in the licensed trade during 2001. Top 10 standard cask ales

1. ‑John Smith's Bitter 2. ‑Tetley's Bitter 3. ‑Worthington's Bitter 4. ‑Boddingtons Bitter 5. ‑Stones Bitter 6. ‑Greene King IPA 7. ‑Banks's Original 8. ‑Courage Best 9. ‑Banks's Bitter 10. ‑Theakston Bitter

Top 10 premium cask ales

1. ‑Bass 2. ‑Marston's Pedigree 3. ‑Courage Directors 4. ‑Greene King Abbot Ale 5. ‑Wadworth 6X 6. ‑Greene King Old Speckled Hen 7. ‑Flowers Original Bitter 8. ‑Theakston XB 9. ‑Adnams Broadside 10. ‑Charles Wells Bombardier