1. Off Trade Innovation Day
7th March 2019

2. Agenda Performance of categories over time
Category Switching – Bottled Ale
Top NPD
Shopper Demographics
Macro Trends
Ideas – low alcohol, health (sport link etc), targeting female drinkers. Older drinkers, premiumisation etc. Moderation.
How to Win with Innovation

3. Category Hierarchy – Total Market latest 52 weeks
Premiumisation is evident across both Lager and Ale. IPAs are the fastest growing style within PBA – Amber and Gold are in decline.
52wks Value £millions
YOY% Performance
Category Hierarchy – Total Market latest 52 weeks
Source: IRI All Outlets, 52 weeks, 2 February Sales (£millions)

4. Sales by Category by Month (Spend £000)
Lager has shown strong growth over time and has carried on the momentum since the Summer.
Sales by Category by Month (Spend £000)
Mainstream Lager
Classic Lager
World Beer
Bottled Ale
Canned Ale
+7.3%
-8.4%
+3.1%
-9.0%
Report Description - Presents the trended performance of products for a selected measure
Id - PW_1070app
+5.7%
Source: Kantar WPO, Total Market 4w/e to 27 January 2019 (Spend £000)

5. Category IRI Reports/Sku.4we.ValVol PIVOT
The PBA category saw an improving performance in the middle of last year but sales have since declined year on year
Source: IRI Major Multiples, 12 weeks, 2 February Sales (£millions)

6. Category IRI Reports/Sku.4we.ValVol PIVOT
Premium Canned Ale has been the success story within Ale and saw strong growth through 2017 and has come out of the canning line issues to show growth again in 2019.
Source: IRI Major Multiples, 12 weeks, 2 February Sales (£millions)

7. Since MUP Premium Canned Ale has seen considerable value and volume growth in Scotland, indeed this growth is skewing the national performance. PBA is performing well ahead of the rest of the UK in value terms and looks to be premiumising more.
Consumer Marketing team is a team of 6 people. (me, James, Thom, Paul, Meriam, Ali and Tom L). You will be familiar with the Customer Status Reports that James sends out and will have met James at the recent Big Bets meeting.
We buy in to numerous sources of quantitative and qualitative data and research.
- This allows us to understand the underlying trends that are driving the category and the motivations of our shoppers and helps us to drive actionable insight.
- Publab – Eye Tracking.
- Due to the nature of our business we buy data across both the Off Trade and On Trade – many Alcohol trends manifest themselves in the On Trade, so this is a really useful for seeing where the Off Trade is heading.
- No one source of data can be used in isolation.
One of our key principles is the “triple win”; consumer, category and customer, we present our findings in an annual Beer Report. (see copies provided). The next report is due to be published in June.
Source: IRI Total Market, 12 w/e data to 2 February 2019

8. PBA has been in net switching decline to a number of other beer categories over the last 6 months – most notably World Beer and Canned Ale, but also Craft Ale and Mainstream Lager.
Switching Flow Summary | Total Market | Spend (£000)
Report Description - Where is my brand winning and losing against other brands?
Id - PW_6405p
Source: Kantar WPO, Switching Flow Summary. 24 w/e Jan ‘19

9. Switching (within beer) has been a big drain on performance for Bottled Ale, “Category Departures” are also a significant factor – presumably switching to spirits and wine
Bottled Ale – Source of Change | Total Market | Spend (£000)
Bottled Ale change = -6.3%
Total Market | 24 w/e | 27 Jan 19 | Spend (£000)
Report Description - What is the main driver of change in my product’s performance?
Id - PW_6180arp
Source: Kantar WPO, Source of Change. Total Market, 24 w/e Jan ‘19

10. World Beer, Canned Ale and Mainstream Lager have been the most significant categories benefitting from spend switching from Bottled Ale
Bottled Ale – Switching Latest | Total Market | Spend (£000)
Report Description - What is the main driver of change in my product’s performance?
Id - PW_6180arp
Source: Kantar WPO, Switching Flow Summary. Total Market, 24 w/e Jan ‘19

11. NPD over the past 2 years has been dominated by multipack craft cans, particularly 4 count cans
Source: IRI Major Multiples, 12 weeks, 5 January 2019.

12. Bottled Ale – Demographic % of Value
Bottled Ale overtrades amongst year olds and year olds. 30% of spend comes from 65+ year olds. What NPD can we launch to cater for this age group?
Bottled Ale – Demographic % of Value
Report Description - Presents a comparison of the product performance against demographic groups
Id - PW_3002pp
© Kantar Worldpanel
Source: Kantar WPO, Demographic % of Value | Bottled Ale | 52 w/e | 27-Jan-19

13. Craft Ale – Demographic % of Value
Craft Ale attracts an older shopper than you may think. There is actually an under trade in under 28s. 29% of spend comes from year olds.
Craft Ale – Demographic % of Value
Report Description - Presents a comparison of the product performance against demographic groups
Id - PW_3002pp
© Kantar Worldpanel
Source: Kantar WPO, Demographic % of Value | Craft Ale | 52 w/e | 27-Jan-19

14. World Beer – Demographic % of Value
World Beer attracts a broad range of shopper ages – with the most significant proportion in the age bracket – this is likely where the bulk of PBA sales are switching from. 23% of spend from 65+ year olds.
World Beer – Demographic % of Value
Report Description - Presents a comparison of the product performance against demographic groups
Id - PW_3002pp
© Kantar Worldpanel
Source: Kantar WPO, Demographic % of Value | World Beer | 52 w/e | 27-Jan-19

15. Canned Ale – Demographic % of Value
Premium Canned Ale attracts a much older shopper – big overtrade amongst year olds.
Canned Ale – Demographic % of Value
Report Description - Presents a comparison of the product performance against demographic groups
Id - PW_3002pp
© Kantar Worldpanel
Source: Kantar WPO, Demographic % of Value | Canned Ale | 52 w/e | 27-Jan-19

16. Demographic comparison
TOTAL MARKET - Demographics % of Value
MARSTON’S - Demographics % of Value
Source: Kantar WPO, Demographic % of Value 52 w/e | 27-Jan-19

17. Average repertoire (ale):
Ale drinkers are more experimental and have a much more expansive repertoire than lager drinkers. Wine and Spirits feature strongly in their repertoire.
Off trade category repertoire (full list)
Average repertoire (ale):
3.8 categories
Source: Eureka! Q7. Which of the following types of alcohol have you drunk yourself at home in the past month? Base: 1,000

18. Best deals / value for money
Value for money and a range feature strongly in the key motivators for selecting where shoppers buy ale.
Main drivers for retail destination (ale shopping)
Main grocery shop
53%
Best deals / value for money
40%
Wide range
39%
Source: Eureka! OFF22. What are your main reasons for purchasing bottled / canned ale from [insert OFF20c]? Base: 997

19. Preference for more chilled serve Preference for room temp serve
Chilled ale preference is now clear – especially amongst ‘high spenders’ and younger drinkers
Serving temperature preference at home (single bottle consumers)
Preference for more chilled serve
Younger drinkers (18-34 yrs)
64%
North West
68%
Higher spenders
66%
DE social class
65%
Female
60%
Experimenters
57%
Preference for room temp serve
Mature drinkers (55+ years)
47%
Lower spenders
45%
Non experimenters
53%
Male
41%
AB Social class
54%
East
49%
Source: Eureka! OFF5. How do you typically enjoy your bottled ale at home? Base: 634

20. UK Channel Share Forecasts to 2023
Discounters will achieve the biggest cash gain in sales Online will achieve the fastest growth rate £ gain for convenience will be similar to supermarkets and hypermarkets combines
Source: IGD Research, “UK Channel Opportunities ”, June 2018

21. Shoppers of the Future
Source: IGD Shoppers of The Future

22. Aldi & Lidl are increasingly being perceived as ‘Supermarkets’ – do we need to
Source: IGD ShopperVista research. Base 894 food discount grocery shoppers. Oct-Dec ‘18

23. Convenience: More main missions being conducted in c-stores
Source: IGD All Convenience store shoppers. Oct-Dec ‘18

24. Moderation – Small/Table Beers

25. High ABV ales +15% YOY +7% YOY +6% YOY +55% YOY
Source: IRI All Outlets, 52 weeks, 5 January 2019.

26. Health - à BLOC Beer

27. Health – Sufferfest Beer

28. Health – The Runaway Pub

29. Premiumisation

30. How to win with Innovation
Source: Kantar WPO – “Winning Through Innovation” 2018

31. How to win with Innovation
Consumer Marketing team is a team of 6 people. (me, James, Thom, Paul, Meriam, Ali and Tom L). You will be familiar with the Customer Status Reports that James sends out and will have met James at the recent Big Bets meeting.
We buy in to numerous sources of quantitative and qualitative data and research.
- This allows us to understand the underlying trends that are driving the category and the motivations of our shoppers and helps us to drive actionable insight.
- Publab – Eye Tracking.
- Due to the nature of our business we buy data across both the Off Trade and On Trade – many Alcohol trends manifest themselves in the On Trade, so this is a really useful for seeing where the Off Trade is heading.
- No one source of data can be used in isolation.
One of our key principles is the “triple win”; consumer, category and customer, we present our findings in an annual Beer Report. (see copies provided). The next report is due to be published in June.
Source: Kantar WPO – “Winning Through Innovation” 2018

32. Innovation needs to drive the key shopper levers
Off trade volumes overtook On Trade in 2014 and have been steadily increasing since.
Supermarket ranges have increased, 2 beer duty cuts in 2014 and promotions on lager and pub closures have helped to drive this shift.
There is still more opportunity for Off Trade to grow with consumers increasingly looking to bring the pub experience home, depending on the impact on the economy following Brexit we may see consumer confidence hit and people switching their spend from On Trade to Off Trade.