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WRITER, CONSULTANT AND BROADCASTER SPECIALISING IN BEER, PUBS AND CIDER. BEER WRITER OF THE YEAR 2009 AND 2012

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Thursday, 25 September 2014

Cask ale is booming as part of the craft beer revolution - new Cask Report launches today

Every year I'm paid to compile the Cask Report on behalf of Cask Matters - a loose affiliation of brewers and industry bodies including SIBA, CAMRA, Cask Marque and most of the leading regional and family brewers in the UK. The eighth report launches today to coincide with the start of Cask Ale Week.

Success makes people nervous, and with some justification. When you're struggling on your way up, as a business, or as a person or organisation putting forward a point of view, argument or campaign which you hope will change hearts and minds, you know very clearly what you have to do: get your head down and keep plugging away, working steadily towards your goal.

When you succeed, what then? Is your job done? Do you need to redefine your goals? Is it true to say the only way is down? Now you've achieved, is someone going to come along and try to take it all away from you?

Until about two or three years ago, the aims of the Cask Report were very clear: persuade publicans and commentators around the beer industry that cask ale was not in terminal decline, that it had a role to play on the pub bar, that it had something to offer drinkers beyond the traditional stereotypes.

Now, the job has changed. There's little point banging the drum that cask ale is successful. Whether they accept and believe it or not, people have heard this before. The questions now are, how does cask ale deal with success? And given that all the chatter in beer now focuses on craft beer, does this mean cask ale's days are numbered? What's the relationship between cask ale and craft beer?

Here are a few summary points from this year's report that attempt to answer these questions.

1. Cask ale is still thriving
Cask ale volume sales grew by 1.1% in 2013 and 1.4% so far in 2014. If those sound like small figures, bear in mind that total on-trade beer volumes fell last year - cask ale is doing 4.5% better than beer in pubs overall. And when you bear in mind that cask ale is only really available in pubs, and 31 pubs a week are closing, for it to be growing in a declining market is some feat. More people are drinking cask ale and pubs are stocking a wider range of beers. But big volume drinking is declining. More people are drinking a wider variety of beers, but doing so less often as healthier lifestyles become more common.

There are two different estimates of the number of breweries now in the UK, but the British Beer and Pub Association (BBPA) puts the number at over 1470 - more than at any time since the early 1930s. Three new breweries open every week. And while craft keg is booming - 19% of SIBA's member breweries claim to be producing some keg beer now - the vast majority of microbrewery beer is cask.

The number of styles being brewed is increasing:


There's more good beer available now than at any time in living memory.

I've also heard a few people say that craft keg is killing off cask ale, that you rarely see cask in good craft beer pubs these days. That's not reflected in total market figures. The craft keg surge is not enough to stop cask increasing its share of all draught ale versus keg - over the last decade, their relative positions have reversed.




2. Cask ale and craft beer are not the same thing, but neither are they entirely separate - there is a pretty big overlap
It's increasingly popular in beer geek circles now to say that craft beer is over as a thing - that the only people who use the term are big brewery laggards seeking to cash in on an exploited, used up trend.

You might think this, but there are millions who disagree with you. They might not know what the definition of it is, but according to Mintel six million UK adults think they've drunk craft beer in the last year.

We did a survey where we asked cask ale drinkers and publicans serving cask ale the same or similar questions. Craft has pretty widespread awareness and acceptance among both:



They have some pretty definite views on how to describe craft beer even if they don't know how to define it. Views that craft beer has to contain loads of hops, be served on keg only or be influenced by American styles are only held by a minority. The main characteristics of craft beer, according to the majority of people who drink it, are that it is made by small brewers, or brewed in small batches or limited editions, or is only available in limited places.


We can see that people decisively reject the idea that any cask ale is by definition a craft beer. But the overlap between cask and craft is strong. The top three characteristics here apply just as much to most cask beer as they do to craft keg. Furthermore, the most popular format of craft beer is draught dispense - that's how 80% of craft beer drinkers have tried it. Cask is still far more widely available than keg, and a lot of drinkers claim to be drinking craft cask beer.

There's a lot more to say on this, which I'll expand on in a separate blog post in the next day or two But the message of the Cask Report is clear: most cask ale is craft beer, and (in the UK) most craft beer is cask ale.


3. The pricing of cask ale relative to craft keg beer is dangerously screwed up
There are factors in the production of craft keg beer that mean it is more expensive to make than cask ale. But the current differential between the two is way bigger than this would dictate. Wide variations in the price of craft keg beer reveals that there is a degree of opportunism on the part of some licensees. Example: there are two pubs near me that sell Kernel Pale Ale on keg. It costs £4.80 a pint in one, and £6.50 a pint in the other. (And before the Fair Pinters kick in, neither is tied to a pubco.) On average, data from market analysts CGA Strategy hows that craft keg retails for over £1 a pint more than craft cask.

This automatically positions craft cask as hugely inferior to keg. Whatever your preference, as a blanket statement this simply isn't true. It's also worth noting that where the price of craft keg is lower on average - guess what? - pubs sell more of it.

This massive price differential damages the quality perceptions of cask ale. It limits sales of craft keg. And the hyper-inflation of craft keg pricing pushes it dangerously close to being seen as a cynical fad rather than a permanent shift in the market - when the novelty wears off, what reasons will drinkers have to pay £6 a pint instead of £3.80? Craft beer publicans need to think about sacrificing short term profiteering in favour of long term market development. I repeat - yes, there is a justifiable price premium. But it's currently too wide.


4. Drinkers don't know how much goes into serving the perfect pint of cask
Drinkers are far less likely to appreciate the relative difficulty of serving cask beer than are publicans.


Drinkers also believe that bar staff receive much less training around keeping and serving cask beer than publicans claim:


On every single aspect of the perfect cask ale serve, publicans claim to be training staff more than drinkers believe.



So are publicans exaggerating the extent they care for cask, or are drinkers unaware of how much hard work goes into it?

It's probably a bit of both, with the emphasis on the lack of knowledge among drinkers. Higher prices mean people expect a more premium product. If drinkers are educated more about what goes into cask ale they'll think of it as more special and will drink more of it and potentially be happy to pay more for it.

So education is key to cask's continued success - but so is good training of bar staff. One interesting point coming from our research is that we also asked what promotional tactics work in selling more cask ale. In answer to that question, 81% of publicans said that personal recommendations by bar staff were the most important way of selling more cask ale. Yet in the graph above, you can see that only 57% of publicans say they encourage their staff to taste cask ales so they know more about them. How can bar staff be expected to recommend ales they know nothing about?


5. Publicans don't necessarily know their drinkers
We've been saying for years now that the old stereotypes of real ale drinkers no longer apply. CAMRA membership has increased from less than 60,000 ten years ago to over 170,000 now. It has nearly trebled. The number of middle-aged beardy men wearing socks and sandals and carrying leather tankards on their belts has not. Cask ale is reaching a broader audience. 15% of all cask ale drinkers tried it for the first time in the last three years. 65% of these new drinkers are aged 18-34. A third of all female alcohol drinkers have tried cask ale. Of these three-quarters say they still drink it at least occasionally.

Whenever we ask drinkers about the old stereotypes, they're disappearing. But we get a different view when we ask publicans:


If as a publican you don't think women are into cask ale, or you don't think it's for younger drinkers, and if you don't position it to appeal to them, you're immediately cutting off more than half your potential audience.


Summary
There's a lot more in the report, which is free to download from the link above from late this afternoon. But these are the points that stick with me after weeks of writing, editing, summarising and debating.

We are in the middle of a beer revolution in Britain, and cask ale is at its heart. It's brilliant that the whole craft beer thing is moving the debate about what makes good beer away from packaging format and towards style, flavour, where it comes from and who makes it.

But I had a tweet this morning saying that all this was 'bollocks', that craft beer was just keg beer with better PR. And I also hear far too many people automatically excluding the entire cask ale market from any discussion about craft beer. Now that really is bollocks. We should be celebrating what a brilliant time we're in for good beer in any format, and making sure that these different formats complement each other if we want to ensure their long term success.


Disclosure: The Cask Report is a paying gig for me and I write it on behalf of cask ale brewers and interested bodies. While it always looks for the positive news on cask, it is honest and accurate. I never distort or excessively spin the facts, and I never write anything in it that does not reflect my own personal views. 

10 comments:

Jake Perks said...

This whole craft definition thing is silly, so I'll stick with my own rule of thumb.

Craft: price is largely based on ingredients.

Not craft: ingredients are largely determined by price.

Method of packaging/dispense, marketing, size of brewery, etc. doesn't come into it.

Cooking Lager said...

Eye, very interesting, Pete. Are you going to do the same for peanut sales in pubs?

Now you've saved old man beer, by conning the kids into drinking it, how about saving those peanut boards with a picture of a naked lady behind the peanuts? Craft peanuts?

Niall Thomas said...

I'd be interested to know what "Other things" were specified in the training section by 12% of publicans.

Knowing the workings of a cellar need not be a requirement for every barperson, so long as at least one member on shift is comfortable and proficient with it. Especially in smaller cellars, in which logistics can get complicated, it can become a case of too many cooks (or cellermen) spoiling the broth (or beer). What every member of the bar staff must be trained in is the way the beer tastes. Far too often in pubs, bar staff will simply regurgitate what's on the pump clip. "It's a bitter" is not a good enough answer to "What's that one like?" I've been guilty of it myself, especially on busy nights with customers who don't appear to be all that interested, but I'm hardly going to spread the word of good beer if I don't make them interested.

Training in pulling a good pint should go without saying, but it can be an issue of complacency. Many first time bar tenders blag their way through it (as I did) before they are shown the right way. Too many publicans forget that it is a skill, simple though it is, but that must be learnt nonetheless.

Tony Leonard said...

Hi Pete, I agree with your comments about the price differential between cask & craft keg being too high but that's being driven by brewers rather than publicans on the whole.
There is a general perception, not least amongst many CAMRA members, that they are being charged too much for cask ale. This, along with the sheer number of brewers competing for space on a decreasing number of bars, is putting pressure on brewery prices (I've heard of one very large cask brewer offering firkin at under a tenner for a three-month introductory offer - TBH I still wouldn't stock the beer in question because it would harm our reputation). Rightly or wrongly, in most towns cask ale has a price ceiling at it would be a very brave or very foolhardy publican who would go over it.
Craft keg isn't subject to the same pressure, CK drinkers tend to be younger, more adventurous and less price sensitive and many brewers are using the category to push up their margins. If anything, there seems to be a competition to produce the most expensive keykeg at the moment (I got offered a 30l keykeg for £219.38 a few weeks ago). Also, because craft keg is generally brewed is such small amounts, the wholesalers stocking it are not getting significant volume discounts and therefore can't manoeuvre on price.
As the category grows these differences will iron themselves out but at the moment the differences in wholesale price will inevitably be reflected in prices at the bar.

Anonymous said...

Tony

Re price discrepancy - Brewers are driving part of it but not nearly as much as pubs. The price difference between our cask pale ale and our kegged is driven by the maturation time needed for the kegged version, (3 weeks) the fact that it comes in a key keg (£12 a pop) and the fact that the ABV is slightly higher so extra duty. Those things are all within our control (We could lower the ABV so it matches the cask, switch to steel kegs and skimp on the production if we were a different brewer).

They are both great products (yep I'm a rep and I would say that) BUT pubs sell a pint of the keg for $4.50 as opposed to £3 for the cask (roughly) - wildly above the price increase that we sell at.

The key point of the report is that yes the price of kegged beer will be slightly higher - but THAT much higher? Given the pub is only paying 10% more (in this case at least) than the cask, its not brewers that are valuing the beer too highly.

General perception of being charged too much for cask is not reflected in the research- maybe among CAMRA members but this is not representative of the average punter who, it seems, would prefer to pay less for craft keg on tap and would be willing to pay more for a pint of cask. Maybe it will take that brave publican to make the first move as you say!

The point is kegged beers are treated with a lot more reverence currently than cask. Despite the fact they are slightly easier to keep and don't cost that much more to make. Speaking as a lover of both I think that's a massive shame.

All the best,
Mark




py said...

Lets be honest: the only viable future for craft keg is in the hands of the big regional brewers or new wave brewers with the ability and courage to rapidly expand their operations. They're the ones with the capacity and economies of scale to be able to produce quality keg beer at a competitive price point. Once the hype dies down, only beer that is in a similar price range to its cask equivalent will remain commercially viable.

Anonymous said...

I'm curious as to why the majority of the data relates to the opinions of male drinkers only? As is mentioned in the report, women are forming an increasingly large section of cask ale drinkers so why isn't there more data reflecting their views?

I'm not trying to have a go, the report is a really interesting read & as a man, I'd be really interested to know more about how women perceive cask ale and beer culture more generally.

Pete Brown said...

Jake, I actually like you rule of thumb. But you are just writing off the views of about 3 million people by dismissing those other factors. Brave move.

Anon, the answer to that is budget and practicality. It's all about the economics of research recruitment. Given the relative numbers of men and women who drink cask, we'd have had to interview six times as many women as men to recruit each cask drinker. If we'd recruited them to be nationally representative of cask drinkers, the number of women in our total sample would then have been so small as to be statistically unreliable, so we would have then had to boost the entire sample size to get the female proportion up to a valid number. In an ideal world we'd have done this but we simply didn't have the time or money this time around - it was already the most expensive piece of research we've ever done for the report.

Anonymous said...

CAMRA has won the day for cask.
Now we need a CAMLAG for proper lager.

Anonymous said...

£6.50 a pint WTF