The brewer of Spitfire is shifting its focus away from cask ales as drinkers and pubs turn their noses up at traditional beers.
Shepherd Neame, based in Kent, said on Wednesday it was focusing more on kegged and craft beers as a result of “changes in the market”.
“Keg volume is the largest element of our brewing operation and growing strongly. Cask and bottle beer sales are much reduced from their previous highs,” the company said.
Real ale, as cask is known, is an unfiltered and unpasteurised tipple brewed in barrels. It is served at cellar temperature and once a cask is tapped, all of its contents must be poured within three days to stop it going stale.
By contrast, kegged beer is stored in a pressurised system and remains fresh much longer.
Real ale aficionados favour cask beers’ softer carbonation, fruitier flavours and the fact it is served at cellar temperature – around 11C to 13C.
However, many younger drinkers now favour so-called world lagers and craft beers which are typically stored in kegs.
Jonathan Neame, chief executive of Shepherd Neame, said: “Some of the more hop-forward beers are doing well – otherwise known as craft. There’s a shift in flavour-profile going on here.”
Mr Neame suggested that the change had also been driven by pubs ordering fewer casks.
He said: “The slow pickup post-Covid meant that many outlets that used to stock a range of cask beers had to reduce and restrict their range. Many brewers had to restrict the number of lines that they produced and it’s taken quite a while to get momentum going.”
He added that the rising cost of glass and an impending green levy on packaging had made selling bottled ales in the supermarkets “a much less attractive sector than it was”, causing the brand to withdraw its products from certain retailers and focus more on pubs.
Mr Neame said: “There’s been some quite fundamental shifts in the last few years away from cask beer and away from bottle beer in the off-trade [supermarkets].”
However, he added: “The industry has seen this before, and I certainly hope and believe that cask beer will recover in due course.”
The brewery, which was founded in 1698 and is Britain’s oldest, is best known for its real ales, such as Spitfire Kentish ale and Bishops Finger. However, it also makes kegged beers including Bear Island Triple-Hopped Lager and East Coast Pale Ale.
Shepherd Neame suffered an 11.8pc decline in total beer volume over the year to June 29, while volumes of its own beers (discounting products it brews under licence for other brands) fell by 17.2pc. Mr Neame said the majority of the decline in volumes was driven by falling sales of bottled beers rather than cask in pubs. This necessitated 10 redundancies in its packaging operation, the company added.
By contrast, Mr Neame said the business was enjoying “double-digit growth in keg volumes”.
The shift in focus comes as Shepherd Neame posted a record year of sales across its business, which includes 291 pubs across the country. Total revenues rose by 3.6pc to £172.3m, while underlying pre-tax profits rose 4.4pc to £7.9m.
Mr Neame said the company’s sales had received a boost by the ongoing return of workers to London. He said: “We’ve seen footfall increasing to our London pubs throughout the year as people return to offices, which is very encouraging.”
He warned over the potential impact of any rise in alcohol duty in October’s Budget, calling on Labour to honour its pre-election pledge to support pubs across the UK.
Mr Neame said: “The sector is assuming that [Labour] will meet its election pledges and will deliver on that. Everyone in it has been saying for a very long time that the sector is over-regulated and over-taxed, and that we want to see a lot less of it, rather than more. I don’t see any sensible case for a hike in any taxes, whether it’s alcohol duty or others.”
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