Cask Beer: The market under the microscope

If you speak to anyone in the cask ale industry, be they brewer, marketeer or managing director, they are more positive now than they have been for some years, the quote above being typical of their general remarks.

Yet to say that the cask market is in growth is quite frankly untrue, no matter what set of statistics you look at - and none of those quoted in this article or anyone else you care to speak to in the industry would disagree.

British Beer & Pub Association (BBPA) figures support this: they show total cask ale is down 4.1 per cent year-on-year.How can we have this divergence? Such positivity against a backdrop of poor sales?

Overall cask sales have been falling for many years. And the influence of the old national power brands - such as Bass, Worthington's and Tetley's - is key to this. A lack of investment in these and many other beers has simply led to an implosion in sales volumes and their replacement on the bar by more lager.

Sadly for regional cask beer brands in the last decade, no matter how much work or investment has been put into them, overall cask volumes have continued to slide. It has been a depressing state of affairs.

But despite this, cask beer is now - for the first time in many years - actually outperforming the rest of the struggling beer market. The sector enduring the biggest problems right now is lager. Premium lager, for so long the superstar of the bar-top, is currently in 8.6 per cent MAT decline.

So it is not simply a matter of stating that cask is performing well or badly; it is more subtle than that. To get a true understanding, you have to look at the difference in performance of the standard and premium cask markets. One is weighing the market down while the other is driving growth.Standard

Despite strong 2007 performances from brands such as Greene King IPA and Black Sheep bitter, standard cask sales fell 6.8 per cent in the year up to December, according to BBPA figures.

This is thanks to the continued slide of the nationals, and is the reason behind the overall continued decline in total cask ale volumes, as Alistair Darby, chief executive of Marston's Beer Company explains: "Standard volumes are suffering because of the performance of the major ale brands.

"The national brands simply have not been invested in and their performance is having a disproportionate effect on the whole market."

Darby also believes that the pub is less and less a place for the standard ale drinking occasion, which could lead to continued problems for the sector.

"The drinking occasion that is really suffering in the on-trade right now is the early week, early evening drinking occasion - where you might have a pint or two on the way home from work," he says. "That is a standard lager and standard ale drinking occasion. The same goes for a quick pint at lunchtime. And it's even worse since the smoking ban."

One brewer that has invested heavily in the standard ale category is Greene King with IPA. Justin Adams, managing director of Greene King Brewing Company, says despite the poor numbers continuing investment is vital.

"Standard is still incredibly important and we are certainly not taking our eye off that one for a minute," he says.

"That is the mistake the national brewers made. There is always a place for easy-drinking lower ABV products. There is a lot of flavour in IPA and that is why it works so well."Premium

So with such a poor performance in standard ale - the traditional heartland of cask fans - why are so many people talking up the category? In a word, premium. The premium cask ale category is enjoying 1.5 per cent annual growth - supporting Fuller's Beer Company managing director John Roberts' statement that "premium cask ale is the real good news story at the moment".

Darby believes the UK's cask brewers have simply followed consumer demand.

"Premium is where the consumer interest has gone. Look at the part the Society of Independent Brewers (SIBA) has played in the burgeoning interest in speciality premium beers," he says.

"That is why the long-term investment has gone into premium beers - such as Pedigree, Pride, Abbot Ale, Bombardier, Hobgoblin. A beer like Greene King IPA is an honourable exception to this and Greene King has done a great job with it; basically in getting premium imagery around a standard brand - as Black Sheep has also done. People are after quality and experience. They think value for experience, not value for money - they want to drink less but drink higher quality."

Darby also feels that going premium makes sense for brewers from a corporate standpoint.

"Whether by decision or by default, standard strength beers are dictated to by volume and therefore you have to keep value in the brand," he points out.

"As a result, people in the brewing industry seem to feel that a premium brand sends out the right signals about their business and is much more likely to give them a good return on their investment."What is driving this resurgance in fortunes for cask?Quality

There is no doubt the endless push to improve quality by retailers and brand owners in the last five years is starting to pay dividends. One example of a brand owner investing in quality is Greene King. Its current portfolio of services for both licensees and drinkers includes a Textline, inviting drinkers to 'shout' about beer quality by text, and Cellar Doctor - an online diagnostic service providing licensees with prevention advice and solutions to problems.

"We have Cask Marque'd a significant part of our estate as we think it is hugely important," says Justin Adams. "We see it as a great way of supporting our pubs. Look at JD Wetherspoon. It has done the same with its estate and it happens to sell a lot of cask beer. It's no coincidence.

"The big issue is what we are doing to talk to consumers to get them back into cask ale. If we do that and our competitors do that then there will be enough room for everyone in the market. If we all did that and looked at quality and looked to move the market forward and grow it then we would all be doing each other a favour."

Paul Nunny, director of Cask Marque, believes the fact more pub companies are signing up for accreditation is having a big impact.

"The number of people passing their accreditation has risen by 17 per cent in the last six months. And in that time we have signed up more corporate members including Timothy Taylor, Brakspear and food-led managed operators like Orchid," he says.

"What it all shows is that pub companies are really getting behind cask, investing in it and making it part of their future business plans. This means we are getting involved in cellar training more and more. This cannot fail but have a positive impact on quality."Pub company interest

What has also been crucial is a greater appetite from pub groups to take on more cask ale into their estates.

Stephen Martin, category manager at Punch Taverns, says cask is a central plank of the company's beer retailing strategy.

"Cask really is doing well across our estate. We made a conscious decision to change our approach to cask about 18 months to two years ago. We have been more aggressive with our promotions and introduced the Finest Cask programme," he says.

"We did it because we looked at the on and off-trade problems and we felt that with the smoking ban coming up we needed to give our pubs a strong unique selling proposition. We are now seeing ale outperforming total beer in our estate. And it won't be long before handpulled ale will outperform keg ale in our estate - I would suggest even by June."

His arguments are backed up by David Safiruddin, marketing director at Manchester brewer Hydes.

"Our growth in cask brands has largely come from the addition of new freehouse accounts, in particular in the North West