The Belgian, who began working for AB InBev – BBG’s parent company – about 13 years ago, also revealed the group is investing in plenty of things from campaigns to new launches and a partnership with BT Sport.
Thumelaire, better known as JD, explains: “What we have seen in the past few years, from Covid to now – and it’s accelerating even more with the cost-of-living crisis – is the on-trade category is fundamentally shifting towards premium and super premium. From 2022, we are seeing the on-trade channel becoming a premium channel versus the off-trade.
“People want that affordable luxury and to treat themselves – and they do that with more premium drinks. Last year, we saw almost 50% of the volume sold in the on-trade was premium and super premium. That’s the first time that’s happened in history. If you look at the value, it’s even higher – 54% of the value is now generated by premium and super premium beers.”
JD says BBG is seeing a rapid acceleration in super premium and while premium lagers such as its Stella Artois brand are quite stable, world lager and craft beers are about twice the size as they were before the pandemic so all licensees need to examine their beer line-ups.
“Before, an average bar would have, say, four premium or super premium taps on,” JD says. “But today, it’s seven, which are replacing mainstream and ales so there’s a much wider choice of world lager and craft beers.”
He recognises about 9% to 10% of pubs have been lost since March 2020 but even with the on-trade contracting, it is still a growth channel for the drinks business.
JD reveals: “Consumer research shows we have a 28% demand for our brands when consumers can choose unconstrained from all brands in the category, which mirrors our off-trade market share, which is 29%. But in the on-trade, we were at 9% market share a few years ago and now we’re growing – we’re at 9.8%, which is our all-time high since 2012 but it’s still only 9.8% versus 29% or 28% so we know our brands can command that share but it’s about making them more available in the on-trade so we need to double down and invest in the on-trade – it’s a no brainer.”
This year, we see solving customer problems as our new challenge”
The business has invested a lot into the on-trade, not least growing its on-trade team to 300 personnel. There’s been millions of pounds invested, an expansion of it draught portfolio and it continues to plough more money, year-on-year, into capex, installs and so on.
He says it’s vital for a publican to know they are partnering with a brewer and brands that will invest in their outlets.
“We want to be there to solve customer problems and we’ve been doing that through Covid when pubs didn’t have cash,” JD says. “We launched Save Pub Life and when bar staff were struggling with revenues, we launched Stella Tips and Stella Please to help them.
“This year, we see solving customer problems as our new challenge. We think this will be about driving footfall. So in a cost-of-living crisis, how do you bring consumers to the pub and how do you make them stay longer? And then how do you bring them on that premiumisation journey, which the consumer already wants? And finally, how do you reduce the costs for operators?
“We already have some initiatives on that, for example, we have a trade programme with BT Sport where we reduce the cost of the BT bill for pubs and we also help drive footfall through showcasing sports.”
Like many others businesses, BBG is big on sustainability and proud to say 100% of its beers are brewed with natural ingredients and with renewable electricity while almost 100% of the barley it uses comes from British farmers and plastic has been completely wiped out from its supply chain.
Returning to the theme of premiumisation, BBG “made a bet” a few years ago on the improvement of drinks and expanded its super premium portfolio.
“We have a wide choice that we can offer. We launched Corona on draught three years ago. It was a massive success for us and was the second fastest growing world lager in the category last year,” JD says.
“In craft beer, we integrated Camden two years ago into BBG and Camden Hells and Pale are now number one and number three craft brands in the UK on-trade. It’s really working very well for us and really getting traction outside of London now. London is the home of Camden but we’re really seeing very good results in other cities like Manchester and Leeds.”
He excitingly adds May will see the launch of Camden Stout and exalts the launch of Stella Unfiltered, a super premium 5% ABV beer, last year. “We saw very good momentum in the off-trade but this year is really the year where we’re going to start expanding in the on-trade,” he says. “It’s served in a beautiful, frosted chalice so we’re quite excited by that.”
Another high roller is Mahou that BBG has in its stable that wasn’t there a few years ago. “It’s the number one beer brand in Spain and something again where we’re seeing very good traction and it has just doubled its market share in the free trade over the past year,” explains JD.
Other brands in the portfolio include Stella Artois, which JD says remains the number one premium lager in the on-trade while other brands with good momentum include Leffe and Goose Island, plus Orchard Pig in the cider category.
BBG UK&I beer portfolio
Super premium
Corona, Camden Hells, Camden Pale Ale, Camden IPA, Camden Stout (yet to launch), Stella Unfiltered, Mahou, Leffe, Goose Island, Orchard Pig
Premium
Stella Artois, Budweiser, Beck’s
Mainstream
Bud Light, Boddingtons, Bass, Magners
Night-time inclusivity
Communities and campaigns are key aspects of BBG’s current and future plans.
“Communities are very important for us because we’ve been super committed throughout the years to support the pubs themselves,” JD begins. “We have a focus on creating that inclusive night-time economy and it’s something we’re going to go big on this year.
“We have two big campaigns going on: It Stops With Me and WalkSafe, which is an app we are working with. This really is about supporting the community because what we see is a lot of people still feel uncomfortable to come to hospitality – they don’t always feel safe and perhaps customers and those working in the industry have experienced harassment or discrimination.
“We see 52% of women, for example, are more likely to visit the venue in the on-trade if they know there are some policies in place or anti-harassment initiatives or there’s a safer way to go home.
“What the app does is helps you to get home. It works with police stats to make sure you avoid the more risky areas. It also contacts your friends and makes sure everybody’s aware if something happens to you. We’re sponsoring that to make sure as many people can download the app.
“There’s also a version for pubs and bar staff so publicans to make sure their staff get back home in a safe way.”
Meanwhile, It Stops With Me started internally where BBG had feedback from its teams that they had experience sometimes of harassment or discrimination.
It Stops With Me means if anyone sees harassment or discrimination happening, they are duty-bound to call it out if it happens.
“It’s more than a campaign,” JD reveals. “It’s a commitment. We’re going to always prioritise people over profits and we’ve made a commitment to our teams and are encouraging all our pub licensee customers to do the same. It’s happening every day to bar staff as well.
“We’re already seeing quite good traction. We’ve had more than 300 pubs sign up to the pledge directly with us. We’re seeing a lot of our competitors and fellow suppliers join the movement as well. This is not branded as a Budweiser campaign on purpose because we don’t want this to be a broader campaign, we want to solve this industry problem.”
The company is also offering training, resources around mental health and dealing with harassment or discrimination, how to train your team on this, and also has a website plus a toolkit freely available.
He adds: “These campaigns are not something Budweiser-branded, they are about making the sector a more inclusive night-time economy to help the whole industry solve the problem. And it will potentially drive more footfall for pubs, which could, ultimately, solve the business problem as well.”
Expanding categories
On the subject of attracting more females to its brands, JD says: “Statistics show when a group is more mixed and has women in it, there is more premiumisation and world lager is the winning category.
“The brand that is the most inclusive is Corona. It is almost a 50:50 split between men and women. The dream is to have a portfolio that is well balanced so Corona does that for sure.
“We are also launching Cutwater canned cocktails that are ready to drink, very easy to pour, and are a premium quality drink that will, again, make our portfolio more inclusive.”
The no and low alcohol category continues but it is coming from a relatively small base in the on-trade versus the off-trade but it’s growing fast in in pubs.
There is a bar staff shortage, so you want to maximise the time of your people”
“You want to make sure everybody feels safe but also included,” he explains. “The reality is not everybody wants alcohol when they visit hospitality – some people are driving or are in different occasions and don’t want that but they still want to have their favourite beer brand.
“Although the volume is not there yet, it is very important and we’ve been developing a lot of brands and making sure we have a non-alcoholic option.”
Stella Artois no-alcohol already exists, Budweiser Zero exists, no-alcohol Leffe is available and Corona Cero was launched last year. And BBG is experiencing a strong demand and its alcohol-free Corona variant is winning awards already. “I think the liquid is amazing. It tastes exactly like Corona and doesn’t have the alcohol. It’s very important for us to make sure everybody feels included in the category.”
A buzz about BEES
BEES is the company’s global business-to-business ecommerce platform. It’s been three years in the making and it’s live in 20 countries, having launched in the UK last year, and has 3.1m active users every month.
“It’s the future,” JD claims. “The on-trade is still very manual but BEES is digitalising this whole ecosystem. That’s very exciting. Orders can be placed very quickly on the app and saves a lot of time. Obviously, there is a bar staff shortage, so you want to maximise the time of your people and it’s much more efficient to use it than having to ring a call centre or having to write emails and so on.
“Also, you can track your deliveries live, manage invoices, access rewards and insights. It also helps you with algorithmic selling to optimise your line-up and make sure you have the best portfolio possible and to maximise your revenues.
“It’s about convenience, transparency, simplicity and driving insights for the publican. Its live in 200 pubs in the UK already. We started in July and have signed up one per day.”
The plan is to add more functions to the system every year so publicans can find all the services they need.
“The app is built by somebody from the sector,” JD explains. “Normally, apps are built by technology companies, and we’re not a technology company. We’re a fast moving consumer goods company and we’re building this in the mindset of solving our customers’ problems, which is very different than how a tech company would go about it.
“Right now, we’re working on dispense and that is probably something a tech company will never do. We’re also looking at how to drive footfall at pubs so we are making this to solve publicans’ problems and developing it for them. It’s a free app – we’re not selling it.”
It’s going to be the first time we bring the music festival to the UK”
The future
What can we expect from BBG in the next year? Supporting pubs to navigate their current challenges, helping them to drive footfall and dwell time, and reducing their costs is one thing while the premiumisation journey is another JD is excited about and that will be continued.
Sport and music are two more. “The next one up is the Women’s World Cup,” he says. “We saw a lot of traction last year with the Euros, for the Lionesses, and the amazing success they had there.
“We’re a proud sponsor with Budweiser of the Women’s World Cup and also the Lionesses. We’re going to do some campaigns in both the on and off-trade and really try to make this a new occasion. It’s been always, historically, about watching men’s football in the pub but there’s an opportunity to create an occasion with the Women’s World Cup, which is trending very positively.”
He also mentions a music festival called Corona Sunsets that is set to take place in the UK this year. JD says: “It’s going to be a big thing for us this year. It’s going to be the first time we bring the music festival to the UK. It’s a global platform live in more than 15 countries around the world where and have massive 5,000 to 10,000 people attending.
“We’ve never done that in the UK but I’ve been running it in South Africa for five years so I’m quite emotionally bound to it as well and very excited about bringing that to UK this year in September and we’re going to announce the location very soon.”
