Shoppers will pay less for craft beer but more for mainstream booze in the mults this summer as big brands’ prices surge in the wake of major range rationalisation.
Retailers are cracking down on standard lager and cider in favour of trendier, more premium lines, with Sainsbury’s axing over 70 SKUs as part of a range review this month. But prices are now rising on the mainstream brands that survived the recent culls.
Average prices for lager, cider and ale are up 4% across 982 SKUs in the mults, according to the latest data [Brand View 19 June 2016 vs 18 June 2017].
Cider prices have seen the steepest increase and are up 6% on average across 177 SKUs, while lager prices rose an average of 5% across 252 SKUs. Ale prices also rose, but by just 1% across 506 SKUs.
“The reality in the beer market is that imported raw material prices have impacted all the brewers,” says retail consultant John Butler. “Some have not been to the trade with a cost price increase in four years - what they’ve been doing is storing it up, trying to be more efficient and cutting their own costs, but there comes a point where they can take no more.
Heineken’s brands saw the sharpest increase, up 8% year on year across 73 SKUs in the major mults. Prices have been rising steadily on Heineken branded SKUs since the beginning of the year, when the brewer reportedly pushed through wholesale price increases. The average price of a 4x440ml pack of Kronenbourg 1664 is now £4.44 - up 11% on last year, while John Smith’s 4x440ml is up 5% to £3.79 and Heineken Lager 6x330ml is up 4% to £5.33. However, Foster’s 4x440ml SKUs are down 1% to £3.66.
Retail prices for AB InBev’s brands are up 6% across 55 SKUs, with considerable hikes for Beck’s and Corona. A 6x275ml pack of Beck’s now costs an average of £5 - a 14% rise on last year - and a 4x330ml pack of Corona is up 10% on average at £4.72.
Carlsberg Group’s prices are also up 6% across 24 SKUs, with a 4-pack of its eponymous lager up 2% to £3.60. The price of a 20-pack, available in Tesco and Asda, is up 30%.
Meanwhile, craft brands with listings in the major mults have seen their prices drop. A 330ml bottle of BrewDog’s Punk IPA now costs 2% less on average than it did last year, with prices down 3% across its portfolio.
“The supermarkets are all trying to win share in craft beer, so they’re taking a bit of a hit to grow the category as it is where the growth is,” says Butler.
Tesco overhauled BWS last March, halving the number of Heineken SKUs as it ramped up the number of craft SKUs. Asda and Morrisons followed suit, revamping their beer and cider aisles with a significant focus on craft and premium beers. It is not yet clear whether Sainsbury’s will extend its craft offer in the wake of its recent de-listings.
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