Tennent's glass is half full

Here are some words which may have you bursting with pride, or despair:

"Despite the short-term dip, the fundamentals in Scotland remain as they were. There have been no material shifts in customer, competitor or consumer dynamics."

And now the important bit: "The region remains, from an economic perspective, one of the most attractive LAD geographies in Western Europe."

LAD? To marketers, it's a Long Alcoholic Drink. To you and me, it's beer or cider. And in this case, the C&C company in Ireland is talking about its valuable and fizzy Scottish asset, Tennent's.

These have been tough years for the company that grew rapidly with its Magners cider brand, and bought Tennent's in 2009.

Bulmer's fought back and others have crowded into the market. Magners (confusingly, it's sold as Bulmer's in Ireland) had helped redefine cider drinking over ice, but lost its novelty and edge and seems to have had less marketing presence.

The decline in market share continues. In its home market, volume was down 16% last year and revenue by 13%.

Woodchuck would chuck

In America, where it bought Vermont's Woodchuck cidery - the country's biggest production plant in a young sector of the US LAD market - it has been squeezed by regional and craft "hard ciders" and by the return of alcoholic root beer.

"Directionally, this is a trend that should further premiumise the category," according to the hideous marketing jargon. (Directionally!?)

That probably means that consumers might be getting used to paying a bit more for a drink.

But for Magners, "emerging premiumisation" is emerging only slowly. A distribution deal with Pabst Brewers should help get it back towards American growth, and could see it sell these brands in the US. America's a big market, but sometimes a surprisingly hard one to crack.

Tennent's, for instance, has gone back into the US market, having been a big seller there long before Prohibition. To do so, it had to honour the state-restricted distribution deals it had from back then.

And to demonstrate how nationalistic beer drinking can be, Budweiser has rebranded itself 'America', at least for this summer.

Craft beer has increased in popularity

Tennent's can lay some claim to be Scotland's national drink of choice. But it's taken a knock following the change in drink-drive limits at the end of 2014.

And remember last summer's rotten weather? It didn't do much for the nation's thirst.

On-trade outlets saw beer volumes in Scotland fall 4% in the year to this February, total volumes were down 6%, and revenue by nearly 7%. Operating profit was down 11%.

This, we're told, is in line with the rest of the market. Worst hit have been rural bars, along with community and sports clubs. Either people were previously pushing the alcohol limit, or the advice for drivers to cut down to no drink at all has been more effective than the brewers would like to admit.

With that hitting sales throughout last year, the current financial year provides a new base from which there's some optimism that Tennent's can start growing again. Hence, the observation that the fundamentals haven't changed.

Tennent's is now distributed alongside C&C's newer offerings - notably Belgian-style Heverlee lager. Sales of that in Scotland were up 21%. In Northern Ireland, they were up by nearly twice as much.

The joint venture in craft brewing in Glasgow's Drygate has already reached capacity.

But distribution has been another glitch in the most recent C&C figures. The company bought a big Scots drinks distributor, Wallace Express, and now admits that integrating it into the business has been more problematic than expected.

India Pale Ale

Meanwhile, the foreign market for Tennent's is quite healthy. Sales in the year to February were up 34%. Some of this is in exports, and there's a push into brewing overseas.

Just as many foreign-sounding beers on British shelves and bars are brewed in not-so-exotic locations such as Burton-on-Trent, Tennent's is being brewed in India by that country's division of the San Miguel empire.

Scotch whisky may take the lead in exporting "in the alcohol space" (directionally?) but there's an appetite for other brands that bring Scottish provenance.

And although small by the standards of brewing giants (and they are truly giant), C&C is pushing into more markets. Asian sales last year were up 66% (there's a recent deal with San Miguel to distribute in Thailand), continental European sales by 11%, and it was the first year in the Nigerian and South African markets. (Laager lager?)

Blighty beer

Back in Blighty, one sign that cheers C&C is that the big retailers are rationalising not only their range of stores but also the product range on the shelves.

They are tapping into the market for niche, regional beers and ciders, along with niche spirits.

Asda this week announced it is stocking Tullibardine whisky and Edinburgh Gin (an independent company this week opening a refurbished distillery in Leith, with a doubling of capacity and big export growth).

But if that process is squeezed by supermarket chains cutting down on their range, C&C hopes it has the stronger brands and better value for retailers with which to see off the upstarts.

It has, meanwhile, been doing its own rationalisation. A hard market for "hard cider" is bringing hard luck to the olde Gaymer's cider mill workers of Shepton Mallet in Somerset.

This is a drink that is symbolic of south-west England, yet production has shifted to Ireland and more than 100 jobs are being pulped - all except the handful kept on to pulp locally-grown apples.

There's also something called Chaplin & Cork's, described by those marketers as "a boutique Somerset cider".

Boutique!? Just wait until they invite Glaswegians to try a "bijou can of Tennent's Extra".