Will the big brand beer push reverse sharp drop in sales?

The beer industry has been staging gatherings at Brewers Hall in London since the reign of Henry VI. But in that 600 years, few announcements could have been as potentially seismic as those coming from within its hallowed walls this week.

Executives from five of the UK’s biggest breweries called time on historic rivalries to work together and try and turn around the category’s fortunes.

Let There Be Beer, a major industry-funded campaign set to run for at least three years, was launched by AB InBev, Heineken, Carlsberg, Molson Coors and SAB Miller, to an audience of dozens of other breweries on Thursday. Today, rugby fans watching the British Lions game on the box will get the first taste of the TV push.

It lacks nothing in ambition - or significance, given the fact bitter rivals have agreed to come off the promotional “merry-go-round”, as one puts it, in favour of generic category backing. So what has produced this heady brew and will it hit the spot?

The simple answer to the first question is an alarming decline in sales. As The Grocer reveals in this week’s Focus on Beer & cider, beer sales have tumbled as unsustainable supermarket deals have come grinding to a halt, sending prices north and sales south.

Lager has been hardest hit, but ale and stout are also struggling. Factor in the British Beer and Pub Association’s warning in March that alcohol consumption in the UK had fallen 16% since 2004 and the prognosis does not look good.

Yet there are more breweries in the UK than at any time in the previous 100 years and some premium and craft beers are booming, fuelling hopes we could yet be on the cusp of a new era for beer, one that the big mainstream brands would dearly like to be part of. Cue the joining of forces to launch Let There Be Beer, which as well as the TV ad is expected to feature a host of other TV, in-store and online elements. The goal is simple. “This campaign is absolutely to turn the beer market back into volume growth,” adds Miller Brands UK MD Gary Haigh.

The brewers claim the gloomy figures mask an unprecedented array of choice for consumers - that needs to be communicated. “There’s a tremendous amount of innovation in the category both in the on-trade and the off-trade,” says David Forde, MD of Heineken UK. “You’re seeing small breweries, craft breweries, new categories like lower-abv beers, flavoured beers. We want to celebrate that with a united message.”

One that transcends the interests of individual brands, adds Benet Slay, CEO of Carlsberg UK. “We think there’s an opportunity to do something different,” he says. “Beer is not getting talked about in the way it could be. We realised that we needed something that stood above the brand work.”

Significant investment

The companies are refusing to reveal how much the push is costing, but with a multimillion-pound TV campaign just one element, it is significant.

“A campaign like this has been floated for many years but the pedal has gone to the floor in the last 12 to 18 months,” says Molson Coors UK MD Simon Cox. “I’ve been in the industry for 24 years and nothing like this has happened in my time. We’ve dug deep in our pockets and put our own marketing investment on the table.”

The timing of the push, months after the Chancellor cut tax on beer by 1p and removed the beer duty escalator, is also significant, with the Treasury estimating it was bringing about £35m a year to its coffers.

The political gain from being seen to reinvest a chunk of that is not lost on an industry that has found itself at the centre of a national storm over health concerns. The prospect of minimum pricing may have died down, but the government is still forging ahead with plans to crack down on alcohol consumption, with high-strength lager top of the list.

“We’re are all very conscious about the health issue,” admits Cox. “It’s very much a theme of the campaign. One of the perceptions is that the industry promotes irresponsible drinking whereas we are signed up to the Responsibility Deal and take this issue very seriously.”

Getting buy-in from major retailers is seen as crucial, with the brewers reporting “very positive” signals so far. However, one source bemoaned the lack of enthusiasm from one multiple retailer, describing its attitude as a “waste of space.”

Questions have also been raised over the absence of Guinness owner Diageo from the group of brewers spearheading the drive. But Andrew Cowan, country director at Diageo GB, insists: “We’re totally behind it. There’s going to be a whole amplification process and we’re fully involved.”

Perhaps the biggest challenge will be to avoid favouring one category over another. “It would have been nice to have a scene in a nice cosy British pub with a nice pint of real ale,” said one ale producer.

Another source noted most of the products are lagers. “The five that are launching this are the big lager producers. But then again the likes of Fuller’s and Shepherd Neame are going to love this. This is the sort of spending on marketing of the entire beer category they could only ever dream of.”

Like everyone in beer, they’ll be hoping the dream generates a very real uplift in sales.