UK: Premium lager market has stalled - new research

08 July, 2009

UK: The premium lager market will ‘contract radically’ over the next few years, according to new research.

Market intelligence provider Key Note said that for the past 20 years, premium lager was the major growth sector of the whole beer category, overtaking the UK’s indigenous dark beers and standard-strength lagers to become a market worth £11.1bn by 2006.  

But according to research, premium lager is likely to ‘contract radically’ over the next few years in terms of the number of major brands competing.  

The report said: “There are now only a handful of major brand owners with the financial muscle to promote beer brands at the required level of marketing investment.

“Since this period of growth, when the sector represented 84% of all lager sold and nearly 60% of the total beer market, the premium category has stalled.  This is partly owing to fashion changes, and also as a result of the launch of sub-premium brands, such as Beck’s Vier and Stella Artois 4%, which are both 4% ABV and extensions of successful existing premiums.  

“Furthermore, in an industry that was already heavily globalised, consolidation in brewing has created even larger multinationals.  For example, AB InBev of Belgium now owns international lagers such as Stella Artois, Beck’s and Budweiser, as well as UK brands such as Tennant’s and Boddingtons.  In 2008, the UK’s largest brewer, Scottish & Newcastle, was divided up between two other international giants, Carlsberg and Heineken.”

Given these changes in ownership and the trend towards mid-strength lagers and ciders, the prospects for the premium category, according to Key Note, are muted, with far fewer lager brands likely to be promoted in the future.  

Despite it being at the heart of the company in the US, SABMiller has withdrawn its Miller brand from the UK market and Key Note believes that others may well follow suit.  Having already cut back heavily on promoting the dark beers they inherited when moving into the UK market, expanding companies such as AB Inbev, Heineken and Carlsberg now have to take stock of their lager portfolios and choose between brands. 

The report continued: “Paradoxically, premium dark beers may benefit from the lower support multinational owners are giving to their standard dark beers, benefiting small-scale UK brewers.  In overall terms, cider is likely to lose some of its fashionable status, but its rise has been beneficial in introducing UK drinkers to some interesting and high-quality ciders from ‘craft’ makers, and could take advantage of a renewed interest in pear cider.”

Key Note is forecasting modest growth for the premium lagers, beers and ciders market for the next 5 years.  Growth in the premium lager sector will continue to be constrained by the success of sub-premiums, as well as a general move away from lager as a fashionable drink.

The Premium Lagers, Beers & Ciders Market Report 2009 is available to purchase from Key Note on +44 (0) 20-8481 8750 or by e-mail at