A brewer has warned that promotional activity such as £1 deals on premium bottled ales is encouraging existing consumers to trade down rather than attracting new ones.
A report by Somerset-based Hall & Woodhouse, which makes ales including Badger Best and Tanglefoot, claimed a key trend in the bottled ale market had been “stunt deals” on some beers at £1 per bottle, which had driven volume growth ahead of value.
According to BrandView.com data, the number of ales sold at £1 over any one period in the past 12 months has increased from 23 to 31 year-on-year - or by 35%.
“It isn’t encouraging penetration, as people are just switching to these deals,” said premium ale category manager Melinda Bowles. “It is throwing away category value.”
There was a role for “fairly aggressive” price cuts, she said, but the most effective mechanics were the likes of three-for-£5 offers.
“The average rsp of bottled ale is £1.99 so even a £1.50 price is a good deal,” she said. “We don’t want to encourage the promotional-junkie culture ingrained in lager consumers.”
The industry should be careful not to commoditise premium bottled and canned ales, said Keith Bott of the Society of Independent Brewers.
“Premium bottled ale is not a commodity beer, and you would expect people to pay more for it,” he said, pointing out that consumers don’t expect to pay the same price on all bottles of wine.
“People will feel there is little difference between mass-produced, well-marketed beers and high-quality artisan beers from small producers if the price is the same.”
Retailers should not be afraid of running promotions at more than £1 but tended to adopt a one-size-fits-all pricing policy to beer. “It’s about producers and retailers holding their nerve,” he said.
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