UK: SABMiller targets 'World Beer' segment despite overall slump

By | 5 October 2012

SABMiller is hoping the trend towards World Beers in the UK bodes well for its Italian beer brand, Peroni Nastro Azzurro

SABMiller is hoping the trend towards 'World Beers' in the UK bodes well for its Italian beer brand, Peroni Nastro Azzurro

The so-called 'World Beer' sub-category is performing well in the UK, despite flagging numbers for the category as a whole, according to SABMiller's unit in the country.

Miller Brands claimed earlier today (5 October) that the 'World Beer' segment was up by 17% in the UK in the last 12 months, and should be worth around GBP2bn (US$3.24bn) by the beginning of 2014. The unit claimed that it is well-placed to benefit from the trend, as it sees 77% of its total volumes consisting of 'World Beer' sales.

According to Miller Brands, the 'World Beer' segment comprises international lager brands that consumers feel “demonstrate quality and provenance, and are worth paying more for”.

“World Beers provide an opportunity for consumers to trade up and retailers to increase margins,” said Sam Rhodes, director of customer marketing at Miller.

“The sector is evolving rapidly; during the last year we have seen increasing interest and talk about craft beer. This is good for the category as it shows people are more open to discovering quality beer, but consumers don’t quite get it yet.

"Retailers still need to capitalise on World Beer and stock higher awareness brands … to drive sales”.

Among Miller's beer brands that operate in the segment are Peroni Nastro Azzurro, Pilsner Urquell and Kozel.

In July, figures released by the British Beer & Pub Association showed that overall beer sales in the UK fell by 5% in the second quarter of 2012, with poor weather and tax hikes being blamed.

Expert analysis

Beer in the United Kingdom

In 2011 beer sales remained weak due to the ongoing and growing consumer concern about government spending cuts on jobs and incomes, which continues to constrain consumer spending. Total volume sales of beer declined by 5%, a more dramatic decline compared to the previous year and slightly sharper than the review period total volume CAGR. This was due to ongoing beer tax increases in March, with beer seeing excise duty increased two percentage points above the level of inflation at 5%. This tax...

Sectors: Beer & cider, The off-trade, The on-trade

Companies: SABMiller

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