Marston’s has reported a surge in revenue over the past year, but supermarket sales of some of its core bottled ales continue to struggle despite a £1m revamp.
Total sales from the Burton-based brewer hit £992.2m in the 52 weeks ending 30 September 2017, up 10% on last year, with profits up 3% to £100.1m, according to its preliminary year end results. The group’s shares surged by 12% this morning as markets opened, hitting 117.4p.
CEO Ralph Findlay said the business had been “transformed in recent years” with “a significant improvement in the quality of both our pub and beer businesses”, and was “positioned to deliver further growth in the year ahead”.
Marston’s fortunes were boosted acquisition of Charles Wells’ beer business in May, which brought well-known brands such as Bombardier and McEwan’s under its control, with the acquisition expected to deliver savings of £2m over the next financial year, and £4m by 2019.
Share Centre analyst Helal Miah said the “excellent set of full-year results” were particularly impressive given the “subdued trading environment experienced across the sector since the summer months”.
However, research by The Grocer shows retail sales of several of Marston’s core branded bottled ales have plummeted, despite a £1m rebrand designed to bring them in line with younger drinkers’ tastes.
It rolled out “radical” new packaging across its flagship Pedigree Ale, Old Empire IPA and English Pale Ale, and launched a new ‘61 Deep’ Pale Ale, in November 2016.
While supermarket sales of Marston’s total portfolio of brews - including Hobgoblin and Ringwood - were up by £3.2m (4.6%) year on year, bucking a wider decline in the traditional ale sector, Pedigree’s value sales fell by more than a third (35%), down £1.6m to £3.1m. Old Empire is down £228k (7.3%) to £2.9m, and EPA £86k (6.3%) to £1.3m [IRI 52 w/e 11 November 2017].
Marston’s director of marketing Chris Keating insisted he was “happy” with the progress of the three ales, stressing the rebrand would take “time to have an effect.”
“What we did was quite radical, and we thought it had to be radical otherwise we were doing what Marston’s had done for the last 10 years, which was tweak and tweak and tweak. And that wasn’t a successful strategy,” he said. “Marston’s had been declining for 10 years, the key brands had been in decline for 10 years. You’re not going to turn this brewery around in 10 months. If in two years I’m still saying the same thing and looking at a decline, I’d be disappointed.”
It was important to note that Marston’s beers had traditionally been stronger in the on-trade than in retail, he stressed. “There is a big on-trade element here, and it’s about getting the balance right between the two.”
Marston’s hopes to extend the core range with another 500ml beer over the next year, and was increasingly focusing on its DE14 experimental brewery, he added. “From DE14 we now have a number of beers we’re starting to look at and decide whether they could fit into the core range.”
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