Beer

Subcategory Report H2 2018

February 2019
 Methodology and notes
• This report is a product launch and sales analysis for the beer subcategory and initially presents a brief analysis of the alcoholic
beverages category. The report also dives deeper into the product launch, sales value and volume, positioning and flavor
trends in the beer subcategory.

• For the purpose of semi-annual NPD trends, the analysis covers the last 3 bi-annual periods: H2 2017 to H2 2018, where H2
2018 represents thesecond half of 2018.

• Geographic analysis covers six major regions – North America, Europe, Asia, Australia/New Zealand, Latin America, and
Middle East/North Africa (MENA). MENA covers all countries under Middle East and Algeria, Egypt, Morocco, Tunisia under
North Africa.

• Indexed product launch numbers are obtained by assigning ‘100’ to the start year values and using 100 as the base calculating
all later values in proportion to the actual product launch numbers. CAGR stands for compounded annual growth rate.

2 Source: Innova Database product launches tracked

 NPD trends in beer: summary
Vegan, gluten
Heineken in the
free and allergy
Europe is the lead for NPD in
among fastest
leading region H2 2018
growing claims in
for both NPD
H2 2018
and sales value
in 2018

Passion fruit,
vanilla and
Top subcategory coconut flavors
with 43% share are popular in
of alcoholic H2 2018
beverages NPD
in H2 2018

3 Source: Innova Database product launches tracked

Category Analysis
 Global beer’s NPD growth is higher than the alcoholic beverages category
• The key trends driving growth of the beer market include:
– Greater demand for craft beers highlighting artisanal brewing methods; local and organic launches
– Preference for super premium and premium products; availability of low alcohol and non-alcoholic versions
– Indulgent options with exotic and seasonal flavors (toasted marshmallow, lobster); sour and nitro beers
– Limited editions and specialty launches; artistic packaging for visual appeal and on-the-go canned beers

5 Source: Innova Database product launches tracked

 Beer accounts for an average 42% share of global alcoholic beverages sales value

6 Source: Food Metrix

 Beer, with an average 41% share, is the leading subcategory

7 Source: Innova Database product launches tracked

 Beer is also the top subcategory across all regions, with the highest share in Latin
America

8 Source: Innova Database product launches tracked

 Beer as a percentage of alcoholic beverages launches increased (YoY) the most in
North America

9 Source: Innova Database product launches tracked

Subcategory Analysis
 Semi-annual launches exhibited a stable trend during H1 2016 to H1 2018, but
peaked in H2 2018

11 Source: Innova Database product launches tracked

 Volume growth higher than value growth; NPD on a steady growth path
• During 2013 to 2018, beer’s NPD increased at 21% CAGR, while value and volume growth averaged at 3.1% and 3.8%,
respectively.

12 Source: Innova Database (launches) and Food Metrix (sales)

 Europe, with an average 48% share, is the most active market
• Asia recorded the highest growth during 2016 to 2018.
– High disposable incomes, adoption of western culture, preference for beers over other alcoholic beverages such as whiskey, vodka,
presence of international brands, craft versions and non-alcoholic varieties are boosting NPD growth.

13 Source: Innova Database product launches tracked

 Europe, with a declining share, is the top region for sales value
• Growing popularity of craft and artisanal beers, super-premium launches, flavor innovation (coconut, verbena tea), seasonal
editions (winter warming chocolate beer), non-alcoholic products, limited editions and attractive packaging are influencing
sales growth in Europe.
• During 2016 to 2018, Asia registered the highest growth in sales value.

14 Source: Food Metrix

 Asia is the high innovation and value growth market

In the developed markets

(North America and
Europe), market saturation,
consumer’s shift towards
non-alcoholic beverages
such as sparkling drinks and
healthful teas, stringent
regulations, high taxation
and competitive
environment are hampering
value growth.

15 Source: Innova Database (launches) and Food Metrix (sales)

 Heineken is the market leader for launches in H2 2018
• Jopen recorded the highest YoY growth in H2 2018, driven largely by launches in the Netherlands.
• The top 7 companies accounted for 5% share of total H2 2018 launches indicating that the market for beer is a very
competitive one.

16 Source: Innova Database product launches tracked

 Focus on seasonal launches and alcoholic flavor hybridization
Desperados Biere Aromatisee Tequila: Stone Sanctimonious IPA Hop Worship Jopen Limited Edition Mashing 7.0 Imperial
Tequila Flavored Beer. Series. Pumpkin Ale.
• France, Jul 2018 • United States, Dec 2018 • Netherlands, Netherlands
• Description: Six tequila flavored beer in a • Description: India pale ale with 7% • Description: Limited edition mashing 7.0
330ml cardboard sleeve. alcohol content, in a 355ml aluminum imperial pumpkins ale in a 330ml glass
can.IBUS: 75. Limited. bottle. It has a nice full taste of malt and
caramel. These flavors are complemented
by the pumpkin and the herbs that are
processed in this beer. A perfect beer to
get in the mood for Halloween.

17
Positioning Trends
 Ethical - packaging, with an average 30% share, is the top positioning
• Organic, featuring in the top 5 claims, is gaining prominence due to both strong growth and penetration in H2 2018.
• Apart from the top 5 claims, other positionings growing in popularity in H2 2018 are allergy, low carb, vegan, gluten free, no
added sugar and GMO free .

19 Source: Innova Database product launches tracked

 Ethical – packaging is also the leading claim across most regions
• Apart from the top 5 positionings, other claims growing in popularity in H2 2018 include:
– North America: gluten free, ethical – environment, ethical – human; Europe: vegan, allergy, no added sugar, ethical - human
– Asia: vegan, vegetarian, low carb; Latin America: gluten free, allergy

20 Source: Innova Database product launches tracked

 Seasonal launches find more shelf space
Stella Artois Cerveza: Beer.
• Colombia, Dec 2018
• Description: Limited edition beer with 5%
alcohol by volume, in a 750ml glass
bottle.
21
Pyynikin Brewing Company Delicate
Smoked Winter Lager.
• Finland, Dec 2018
• Description: Delicate smoked winter beer
with 5% alcohol content, in a 500ml
aluminum can. It is a seasonal beer with a
hint of smoked flavor, that goes well with
meals in cold winter. Winter edition.
Estrella Galicia Cerveza Especial: Special
Beer.
• Spain, Dec 2018
• Description: 10 x 330ml easy-to-open
aluminum cans of special beer with 5.5%
alcohol content, in a carton box. Limited
edition.
 Well-established traditional style offerings
Box Steam Brewery Derail India Pale Ale.
• Austria, Dec 2018
• Description: A hoppy India pale ale
beautifully engineered in Wiltshire, in a
500ml glass bottle. Contains 5.2% alcohol
by volume. Traditional India pale ale.
22
Birra Nazionale Baladin Gluten Free: Gluten
Kern Original Lager.
Free Artisanal Beer.
• Italy, Dec 2018 • Russia, Dec 2018
• Description: Hand-crafted beer with • Description: Traditional lager beer in a
spices and peel of citrus fruits, in a 330ml 500ml aluminum can. Contains 4.6%
glass bottle. 100% Italian beer. alcohol by volume.
 Front-of-pack prominence for premium claims
Kordaat Premium Pilsener Beer. Emdbrau Premium Quality Radler Beer. Warsteiner Premium Beer.

• Netherlands, Dec 2018 • Spain, Dec 2018 • Hungary, Dec 2018

• Description: Premium pilsner beer in a
300ml glass bottle. This delightful beer is
brewed in a traditional way from carefully
selected ingredients. Contains 4.8%
alcohol by volume.
• Description: Premium quality radler beer • Description: Premium lager beer in a
with 2.2% alcohol content, in a 330ml 500ml aluminum can.
easy-to-open aluminum can.

23
Flavor Trends
 Top 5 flavors are highly fragmented
• Apart from the top 5 flavors, tropical fruits, vanilla, passion fruit, coconut, blackcurrant and milk chocolate are the other flavors
growing in popularity in H2 2018.

25 Source: Innova Database product launches tracked

 Red raspberry is popular in North America, Europe and Australia/NZ, whereas lemon
leads across the rest of the regions
• Apart from the top 5, other flavors growing in popularity in H2 2018 include:
– North America: coconut, passion fruit, mango and lime
– Europe: passion fruit, vanilla, citrus, blackcurrant, blackberry and coconut

26 Source: Innova Database product launches tracked

 Red raspberry is the top flavor
Simple Malt Brasseurs Raspberry Berliner Finne & Biozisch Himbeer Cassis: Mykulynezke Mykulyn Blanche Raspberry
Light Beer. Raspberry Cassis Beer. Light Beer.
• Canada, Dec 2018 • Germany, Dec 2018 • Ukraine, Oct 2018
• Description: Raspberry berliner light beer • Description: Raspberry cassis beer in a • Description: Blanche raspberry light beer
in a glass bottle. A Berlin white fresh and 330ml glass bottle. in a 500ml glass bottle.
light with acid raspberry splash. A
summery delight to savor like a sorbet
under a parasol.

27
 Lemon flavor shares the lead
Lubzer Zitrone Naturtrub: Naturally Cloudy
Lemon Beer.
• Germany, Dec 2018
• Description: Naturally cloudy lemon beer
in a 500ml glass bottle. With 60%
lemonade and 40% alcohol free. With
high fruit content.
28
Damm Cerveza And Limon: Lemon Beer.
• Spain, Aug 2018
• Description: Lemon beer in a 250ml glass
bottle.
Estrella Galicia Sabor Limon Shandy:
Lemon Flavor Shandy.
• Ecuador, Nov 2018
• Description: Six aluminium cans of lemon
flavor shandy held in a cardboard sleeve.
Each can contains 330ml of beer.
 What's next - 5 things that could shape/impact the beer subcategory
Beer is by far the largest of the five alcoholic beverage subcategories in terms of NPD, and its share rose
Extending lead in NPD from 37% in H2 2017 to 43% in H2 2018. It is particularly popular in the Americas, with the share rising to
53% in North America and to 56% in Latin America. NPD rose consistently over the 2013 to 2017 period,
accelerating in H2 2018

Europe leads in terms of NPD and sales, but Asia is the high innovation/high volume growth market. Beer is
Asia is high innovation/high not traditional in the region, but is increasingly established with rising disposable income and the interest in
volume growth region western food and beverages. Although NPD remains relatively modest, with just 7% of the H2 2018 total, it
is already the number two market in terms of sales value with nearly 32% of the 2018 total

Limited editions continue to be used to maintain interest in the subcategory, with different recipes, flavors
Limited editions continue to and pack types launched for seasonal and special events. It is the number two positioning overall, used for
feature 10% of H2 2018 launches and is a particularly popular tool in the developed and hence highly competitive
North America and Australia/NZ markets.

Traditional and premium Traditional is the number three positioning in H2 2018, illustrating the ongoing interest in traditional types
of beer and production methods, with a particular focus on artisan and hand-crafted beers and microbrews.
options also popular This is also linked in with premium claims, with indulgent and premium the number four positioning overall.

Although interest in flavored beers has risen in recent years, they still only account for a very small share of
Flavored beer still limited NPD and sales. Raspberry and lemon were the top two flavors in H2 2018, but they featured in only 0.8% of
penetration launches each. Raspberry led in the developed regions of North America, Europe and Australia/NZ, while
lemon, more typically used for shandy/radler type products, led in the emerging regions.

29 Source: Innova Database product launches tracked

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