If I’d had a shandy, I probably would’ve choked on it. Instead I nearly fell off my chair when Heineken’s Craig Clarkson told me that he thinks low-abv citrus beers and weaker cider sales can grow from around £40m a year to £600m by 2020 (to see exclusive footage of that interview click here). Had he been on something a bit stronger?
Admittedly, he was talking about the total drinks market, and apparently lower-abv beers sell well in the on-trade (primarily to designated drivers, I suspect).But when you look at the numbers, Heineken’s prediction that we’ll be spending more than half a billion quid a year on what’s basically shandy or slightly alcoholic apple juice within six years is rather hard to swallow.
Granted, the £7.2m and £5m Foster’s Radler and Carlsberg Citrus have racked up respectively in their first year on shelf (as revealed in Top Products 2013, out on Saturday) isn’t anything to be sniffed at, but the fact citrus beer pioneer Carling Zest is down 5.3% on volumes down 8.8% [Nielsen 52 w/e 12 Oct] raises questions over the long-term prospects of the burgeoning sector.
Of course, it’s in brewers’ interests to push weaker beer. With Radler weighing in at 2% abv and Carslberg Citrus and Carling Zest both at 2.8%, all three pay considerably less in duty than the full-strength offerings. This, combined with the higher prices they fetch (Radler fetches on average 23p a litre more than Foster’s, for example), provides a powerful incentive.
It’s a different story for cider. While Heineken is planning to launch two low-abv ciders in the spring (as we revealed last week), duty savings are not the incentive (all ciders from 1.2% abv to 7.5% are taxed at the same rate). Sustaining growth in cider is a more pressing concern; our research in conjunction with Nielsen shows that cider volume growth has slowed to just 0.5% in the past year.
Despite the fact lower-abv ciders and citrus beers have carved out considerable markets for themselves on the Continent, £600m a year from practically a standing start here in the UK by 2020 seems like a very tall order indeed. I may be proved wrong, but the differences between British and Continental drinking cultures seem like a huge barrier to Heineken’s ambitions.
Watch our full interview with Heineken’s Craig Clarkson here.
Read more of The Grocer’s Top Products Survey 2013.
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