Carlsberg loses market share due to premiumisation

02-May-2018 - Last updated on 02-May-2018 at 10:18 GMT

Mainstream slump: Carlsberg blamed "continued challenges" for a fall in market share

Danish brewing giant Carlsberg has revealed it has seen a fall in UK market share as consumers seek to trade up from mainstream to premium brands.

Reporting on results for the first quarter of 2018, the group said trade in the UK had been “impacted by the continued challenges of the Carlsberg brand”.

Reported sales in western Europe were down 8% for the quarter, with the group blaming poor weather conditions, currency fluctuations and its divestment in April last year of German wholesaler Nordic Getränke.

There was better news for the group's non-alcoholic portfolio in the region, which increased volumes by 23% year on year.

Global results

Globally, Calrsberg saw organic net revenue growth of 2%, despite a 5% sales dip in the three-month period. In terms of brands, Tuborg grew volumes 11% while Carlsberg was flat. Grimbergen was up 12% and 1664 Blanc was up 44%. Craft & speciality brands saw volume growth of 30%.

Speaking about the group’s results chief executive Cees ’t Hart said: “The market share loss [in the UK] is mainly driven by, first of all, decline in mainstream segment, as consumers are trading up.

“The Carlsberg brand continues to lose market share in the mainstream segment. We see Carlsberg Export doing better, because of the new advertising, but Carlsberg Green, as it is called, is continuing to lose some market share.”

Premiumisation continues

According to the latest data from CGA, mainstream lager sales have dropped by 11% since 2011, and total volume sales are down by 5.6% in the past four years.

However, value in the same period is up 5.5%, showing that customers are increasingly switching up to higher value, more premium products.

“Lager volume declines over the past four to five years are driven primarily by the standard lager brands,” said CGA senior client manager Paul Bolton. “As more premium choices become available to fit a consumer looking for a more premium experience, these brands have suffered the most, which as the biggest, drives down the category as a whole.

“The picture more recently is a lot more positive as growth in premium lager brands, in particular, has meant volume declines are being curtailed, while value is in growth."