Heineken UK Launches Beer Report Collating Insights To Boost the On-Trade

1 in 3 consumers claim to visit the on-trade weekly(1)
33% of Generations Y and Z stick to one or two brands(1)
26% of Gens Y and Z would like to see a greater choice of lighter-style beers(1)
55% of Gens Y & Z have tried a new beer in the last three months(1)
46% of Gens Y & Z are drinking less alcohol in general(1)
49% of Gen Y & Z would like to see a greater choice of premium beers(1)

Exclusive research in HEINEKEN UK’s Beer Report has revealed younger generation beer drinkers are driving the move away from classic lagers toward more premium brands. They are also pushing innovation in No and Low Alcohol beer. The report shows the changes in the beer industry over the last few years and investigates the differing tastes of new generation beer drinkers.

The report examines the drinking habits of UK consumers, with a particular focus on Generation Y and Z (ages 18-34). With 66% drinking at least one beer on two or more occasions per week[1], there are numerous opportunities for operators to recognise and align with the tastes of younger generation beer drinkers to drive sales. Moving away from classic lager and into more premium beers as well as increasing the selection of No and Low Alcohol options can attract younger drinkers to outlets. Continuing to stock a range of craft beers will also appeal further to the Gen Y & Z market.

Premium lager has become a key driver in the market, having almost doubled in value share in the last five years[2]. Analysis from the HEINEKEN UK Beer Report showed this is likely to continue, with premium brands set to see major gains. Generations Y and Z are the main drivers behind this acceleration in growth – bolstering volume share by 5.8% between 2019 and 2021[3] – largely a result of greater confidence to visit pubs and bars during reopening in 2020 and 2021. These younger drinkers tend to consume fewer classic lager brands and instead turn their attentions to more premium beers, such as Birra Moretti.

The growth of No and Low Alcohol in recent years has also provided a huge opportunity for the industry, the report shows. With 70% of consumers trying to live healthier[4], No and Low’s value has grown 22.5%, and now a third of consumers have said that they would drink No and Low Alcohol beer[5]. Generations Y and Z are again driving this growth, with 46% drinking less alcohol[6]. Operators looking to attract Gen Y and Z spend therefore would benefit from offering a high-quality selection of Low and No Alcohol beers, as well as ensuring these brands are visible on the bar.

Craft beer has remained a strong segment within the category. While growth wasn’t as consistent as in other beer segments, total value sales increased from 5.3% in 2017 to 7.8% in 2021[7]. This steady performance is largely due to bigger breweries growing their share of the market, particularly over the past two years when they were able to give more support to pubs. Additionally, consumers sought trusted brands on returning to the pub, with the likes of Beavertown and Brixton benefitting. Operators have an opportunity to grow their craft beer sales by building their range around these entry-level options - on draught if sales volumes allow - then adding more unique styles of craft beer in packaged formats to offer a point of difference.

It's clear from the report that Gen Y & Z drinkers are more interested in variety than their older peers. HEINEKEN UK’s research shows that over half sampled a new beer in the last three months[8], with 25% preferring more lighter-style beers, and a further 49% desiring more premium options, such as Heineken® Silver[9]. In fact, the report also shows that premium light lager is under-priced and is missing out on the opportunities of premiumisation. Customers perceive light lager as being priced too low to be considered premium, leading venues to miss out on sales.[10] On average, over two-thirds of stockists serve light lager at just 10p more per pint than the entry level lager on the bar[11]. Had light lager premiumised at the same rate as continental lager, the market would be worth an additional £40M[12]. Heineken® Silver taps into the growing demand for lighter tasting, premium lager, driven by next generation beer drinkers, allowing operators to trade customers up into a new price point worth over £100M to the market[13].

Charlie Fryday, HEINEKEN UK On-Trade Category and Commercial Strategy Director, said: “The level of premiumisation within the beer category has continued to increase as people drink less classic lager and consume fewer, but better, beverages. This is also driving the moderation trend and even a spike in No and Low Alcohol products as younger drinkers seek to lead a healthier lifestyle.”

The Beer Report shows the immediate success of the beer category lies within three strong-performing segments: premium, No and Low Alcohol and craft, all showing growth in recent years. As these segments become more popular amongst younger drinkers, operators need to adapt to the changing trends to attract the next generation of drinkers.

Download the Beer Report here

[1] KAM Media Beer Drinking Habits January 2022

[2] CGA Strategy 1st Jan 2022

[3] CGA Strategy 1st Jan 2022

[4] CGA No/Low Report 2021

[5] CGA No/Low Report 2021

[6] KAM Media Beer Drinking Habits January 2022

[7] CGA Strategy 1st Jan 2022

[8] KAM Media Beer Drinking Habits January 2022

[9] KAM Media Beer Drinking Habits January 2022

[10]CGA Strategy 11th September 2021

[11]CGA Strategy 11th September 2021