All hail ale – the business benefits of cask ale
In the week that the Cask Report 2010 is published, its author Pete Brown looks at the surge in popularity of cask ale, and the business benefits it provides.
When the first Cask Report was published in 2007, its main task was to convince a sceptical pub industry that reports of the death of Britain's national drink were somewhat exaggerated. These days, coverage of the sector usually has words like "booming" and "resurgent" in it, and cask ale brewers can often be found congratulating themselves on a job well done.
But cask ale is a quirky, eccentric market, still often misunderstood by publicans and drinkers alike. Each year, the Cask Report has to restate the case. Cask ale is benefiting from changing spending habits inspired by the recession. People are moving away from conspicuous consumption, paying off debt and rediscovering simpler pleasures. This interest is being facilitated by the massive growth in social networks, with the online beer community actively spreading appreciation and knowledge. This year is in most respects the most positive report yet (see Key Findings).
But there are obstacles too. Cask ale doesn't benefit from the huge marketing spend of lager brands, and remains obscure to many. There are no significant barriers to trial - either in terms of product perceptions or image associations - but people need to be given a good reason why they should try it instead of their usual drink.
This is all good news for cask ale fans and brewers. But what does it mean for pubs? Cask ale tends to be sold more cheaply than lagers of equivalent strength. It's reasonable for publicans to ask why they should want it to account for a bigger chunk of their business if they're making a lower margin from it.
But cask beer moves in mysterious ways. Research consistently shows its drinkers are affluent. They visit pubs more than other drinkers, and spend more money while they're there. They're more likely to order food. And when they're in groups, other drinkers follow their lead on choice of pub - turnover increases across the board in cask ale pubs, creating a "value chain" of profitability.
But let's come back to that point about cask ale being sold cheaper than lager. That's like selling award-winning, handmade farmhouse sausages more cheaply than a supermarket's value range bangers.
Research by Greene King shows cask drinkers actually believe their pints are more expensive than Carling. And Epos till data compiled for Wells & Young's proves that cask sales are higher when it is priced the same as lager than they are where it is cheaper! Publicans who make cask ale the cheapest pint on the bar are simply cheating themselves out of margin.
The real ale industry has spent a great deal of energy promoting the virtues of cask beer with food. It certainly has a broader array of flavours and styles than any other drink apart from speciality craft beers from around the globe. Cask ale is growing in food pubs faster than any other type of pub. It goes hand in hand with the traditional country pub. It's becoming an integral part of the new breed of food-led pub (see case study) and right through the market to branded food-led chains such as Toby Carvery, cask ale is being reintroduced with impressive results.
Cask ale's performance does vary markedly by region. The rising star, from the lowest base, is Scotland. While it still lags some way behind the rest of the UK, volumes are up for the fourth consecutive year by an incredible 31%.
Other regions demonstrate that the northern flat-cap-and-whippet image of cask ale is a thing of the past. Cask ale is strongest in the South-east and London. Given that the fading brands owned by big multi-nationals - John Smiths, Tetleys and Boddingtons - have their heartlands in the North, it's no surprise that cask ale is in decline there. Though having said that, there are success stories wherever you look. There are now more than 700 breweries in the UK, with over 60 new ones opening in the past 12 months. Regional and local identity is attractive to cask ale drinkers, and there's not a part of the country that doesn't boast thriving small brewers.
The only danger with the great opportunities facing cask ale is complacency. Most people - even those who drink cask every now and then - lack knowledge about it, and pubs do need to work at trial and education opportunities in order to make it work. It's extra work - but it pays off. No one can claim that cask is a cure-all in difficult economic times, but pubs that stock it are seen as better quality by consumers - and as more profitable by their licensees.
MAKING THE MOST OF CASK ALE
â- Start with two or three ales - a mix of tried and trusted brands, local brews and seasonal guests, and grow the range from there. Serving 10 beers that are stale because they don't sell quickly enough is the perfect way to kill a cask beer business.
â- Talk to your suppliers about how long the beer should condition for. Many beers need to stand in the cellar for a few days before being served, which allows "green" flavours to harmonise.
â- Take advantage of training - the Cask Report lists various bodies capable of enthusing staff about the delights of cask ale.
â- Don't be scared of trial and sampling activities. Some 23% of non-drinkers say they'd give it a go if there were tasting notes and descriptions at the bar.
KEY FINDINGS
The report covers data up to the end of each calendar year, and the results for 2009 are very promising:
â- Value growth of 5%, versus an overall value decline for the beer market of -2%
â- Volume steady - the first time since 1994 there was no volume decline in cask ale. It would have been in growth were it not for the terrible performance of the big brands owned by multinational brewers (-11%), who are disinvesting from the market. Regional brewers rose by 1%, and microbrewers by 5%
â- Growth in share of total on-trade beer to 15.2% - the best market share for over a decade
â- Distribution increased by 4%, with an extra 3,000 pubs stocking cask
â- Performance was particularly impressive in food-led pubs, where value increased by 16%
â- The number of cask ale drinkers increased again, with a total of 8.6 million people now claiming to drink it. And it's recruiting younger drinkers - the number of 18-24 year-olds drinking cask ale increased by 17%
MUST-TRY BEERS
Castle Rock Harvest Pale
This year's Champion Beer of Britain, a classic example of a light, golden ale perfect for luring over lager drinkers who have grown bored with their lot.
Fullers London Pride
One of the old reliables - one of those solid, middle-of-the-road beers that you can forget about for a while, but always adore rediscovering.
Brew Dog Trashy Blonde
From the punk bad boys of the craft brewing scene, an accessible yet complex beer, tasty yet refreshing, which proves there's substance behind the hype.
Adnams Broadside
Almost unmatched for when the nights are drawing in and people draw close to the fire, with rich toffee and warming caramel.
Thornbridge Jaipur Winner of more awards than any other since its birth five years ago, quite simply the Rolls-Royce of beers - elegant, sophisticated, with quality running through it.
CASE STUDY: THATCHERS ARMS, MOUNT BURES, ESSEX
When Mitch Adams took over in 2006, the Thatchers Arms was a glorified fish and chip shop with very little trade. The new team focused on good value, fresh, locally sourced food and local ales from a mix of regional and microbrewers, a move that increased interest in cask ale in the local area.
The pub is not served by public transport, so most customers travel there by car. It's a real destination pub, and cask ale is one of the reasons, along with the food, that people choose to travel to it instead of walking to their local. It has Cask Marque accreditation, two beer festivals a year, and regular guest ale promotions which are promoted online extensively.
Cask ale's relationship with food is vital too. "Cask ale does two things for our food reputation," says Adams. "First, if you serve well-kept cask beer, it lifts the reputation of your kitchen too - it's a major quality indicator. Second, if there's a table of four or six people and one of them is a cask ale drinker, he's the person who has the influence over what pub the whole table chooses."
The results speak for themselves. In the first three months of trading, cask ale accounted for 50% of beer sales. In the past three months, total draft beer sales have more than trebled from their 2006 level - and cask ale now accounts for 60% of the total. In a pub where food accounts for 60% of total turnover, cask is a vital business driver.
CASE STUDY: THE JOLLY BUTCHERS, STOKE NEWINGTON, LONDON
The Jolly Butchers was a pub mainly frequented by dusty old men resting between trips to the bookies when it closed in February 2010, making a rumoured £2,000 a week loss. The fruit machines and TV screens, rather than luring drinkers in, had scared them away.
The pub reopened two months later with a new landlord who had pounced on the property because it was free of tie. It reopened with an open kitchen preparing upmarket, locally sourced pub food, with eight real ales on the bar, selected from local brewers and the rising stars of the craft beer scene.
Business has transformed. In a fashionable, trendy part of London, it has become a hipster's watering hole where the average age is under 30, and everyone - men and women - is drinking cask beer from supposedly unfashionable handled dimpled jugs.
