Brewing & Brands sells and distributes a wide range of award-winning craft ales to both the on and the off-trade. They are brewed in one of our two breweries in Bury St Edmunds and Dunbar.
Our core brands
The new Greene King IPA branding was extended to bottle formats during the year.
SHARE OF TOTAL REVENUE
OWN BREWED VOLUME
ALE MARKET SHARE
GREENE KING IPA VOLUMES
In Brewing & Brands, our strategy is to drive growth and cash generation through building consumer loyalty to our core ale brands and our innovative range of seasonal and ‘craft’ ales. This strategy has led us to being the UK’s leading cask ale brewer.
Significant progress was achieved in the year and, including additional volumes to Spirit pubs, OBV grew by 2.9%, increasing our share of the UK ale market by 40bps to 10.5%2.
Revenue grew 2.2% to a record £196.9m, while operating profit grew by 9.7% to £32.7m leading to a 1.1%pt increase in the margin. The margin increase was predominantly driven by new sales to Spirit managed pubs, which are included in the Pub Company revenues along with those to the rest of the Greene King estate, but there was also a benefit from a positive channel mix and additional cost efficiencies realised in the second half of the previous financial year.
During the year, initiatives to further build consumer loyalty and engagement included the Greene King IPA ‘To The Pub’ campaign, which reached an audience of over 20 million and resulted in 60% of ale drinkers surveyed saying that the adverts encouraged them to buy Greene King IPA on their next visit to the pub. Other initiatives were a £1.2m investment in a multi-channel media campaign in the Hen brand family and increased use of social media to promote the Abbot Ale brand, with industry-leading engagement levels to date3.
Our three core ale brand families – Greene King IPA, Old Speckled Hen and Belhaven – saw further volume growth in the year and our ale portfolio benefited from a number of exciting new partnerships, including Greene King IPA’s sponsorship of the England and Wales Cricket Board. Greene King IPA was positively impacted by a brand refresh in the on-trade and growing popularity in the export market led by China. Overall, volumes of Greene King IPA grew by 8.0%, increasing its share of the UK cask ale market by 0.4%pts. The ‘Hen’ brand family had another successful year, particularly in take-home where penetration increased by 3%4 on last year and, overall, Old Speckled Hen remains the number one premium ale brand in Great Britain.5
New product development remains a core part of our strategy and helps us to remain relevant to core consumer drinking occasions. Volumes of East Coast IPA continued to grow throughout the year, we launched ‘Old Spirited Hen’ and we also released limited edition ales such as Purple Reign, launched in celebration of Her Majesty’s 90th birthday.
Elsewhere, we were proud to see Belhaven awarded ‘Distributor of the Year’ in Scotland at the prestigious DRAM awards and a number of our ales, including Greene King IPA, Abbot Ale and Belhaven Best, won gold at this year’s Monde Awards. The launch of our new beer café at our Bury St Edmunds brewery has added to the brewery tour experience, which itself received a Certificate of Excellence on TripAdvisor for the fourth consecutive year.
Following the acquisition of Spirit, we have been encouraged by the response of the Spirit pub managers and their desire to sell Greene King beers and are delighted that Greene King IPA is on sale in over 90% of Spirit managed pubs.
- Before exceptionals.
- BBPA May 2015-May 2016.
- Google analytics.
- Kantar Worldpanel 52 w/e 24 April 2016.
- CGA Brand Index On-Trade Survey, 52 weeks to 03/16/Nielsen Scantrack volume data 52 weeks to 04/16.
Greene King IPA, Old Speckled Hen and Belhaven all saw volume growth in the year.