Strike up the brands

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Related tags: Premium lager, Beer, Pale lager

Consumers are currently drinking premium draught lagers on a more regular basis and this is changing the nature of the beer market, reports Richard...

Consumers are currently drinking premium draught lagers on a more regular basis and this is changing the nature of the beer market, reports Richard Matthews You either have or you haven't got style," go the words of the old classic song. With premium draught lagers though, you have to have style to succeed, say the big brand owners. This year, the market has seen new-style fonts, new-style methods of delivery and the introduction of style icons like Danish supermodel Helena Christensen trying to woo the style-conscious 18 to 34s ­ the key target market for the sector. In a pretty static beer market, it's the premium lagers that continue to show growth, with Stella Artois, Kronenbourg 1664, Grolsch and Carlsberg Export, in that order, leading the field. Dutch born and brewed Next year, they will be joined by another well-known name ­ Heineken. Not the standard lager that has been sold in the UK for the past 40 years, latterly as Cold Filtered with an abv of 3.4%, but a 5% premium product. It will be brewed in Holland but marketed and distributed by a new UK-based subsidiary Heineken UK. Plans are still being formulated and final details, including new marketing initiatives, will be announced in the New Year. Heineken UK's managing director Rob Marijnen says: "Heineken has a long tradition in the UK and is one of the most popular beers. People's tastes change though, and British drinkers have developed a taste for the original version of Heineken ­ loved by millions of drinkers in more than 170 countries around the world ­ when they have been overseas." The launch of a well-known international brand into the premium lager market has sent shock waves through the corridors of the current big brand owners' headquarters. Quietly, however, most seem to relish the challenge of another brand helping to expand the sector still further. Belgium's star performer Interbrew UK says it is the rise of big brands such as Stella Artois, the No.1 selling premium lager, that has driven the development of the premium lager sector. The brand accounts for more than four in every 10 pints of draught premium lager sold in the UK. Allan Tudor, Interbrew UK's on-trade sales director, comments: "Consumers are drinking premium brands, notably premium lager, on a more regular basis and this is changing the nature of the beer market. "We are now in the era of the premium drinks consumer. Consumers are now drinking premium lager more frequently than in the past and shifting up from standard lager more often." Tudor says retailers need to gear up for the premium era by ensuring they stock and prominently display the major brands. The "big brand phenomenon" has been given extra momentum by structural changes in the industry through the freeing up of supply agreements and the shift to central warehousing. "This means that big brands are available to more on-trade outlets than ever before and this is driving distribution growth," explains Tudor. Stella Artois has maintained its sales momentum by increasing volume sales by 18% over the most recent 12-month monitored period, compared with a current rate of growth of 12% for the overall draught premium lager market. The UK's love affair with lagers can be gauged by the fact they command a record 58% share of on-trade beer sales and Interbrew estimates that they will account for 75% of the total market by 2007. Dual stocking, with retailers stocking packaged versions of the draught product, is also helping to fuel the growth. French connection Scottish Courage's brands director Andy Neal says volume growth of draught Kronenbourg 1664, the second biggest-selling premium lager, was directly in line with the market. However, its packaged version is showing remarkable growth and is up by more than 135% due to the success and distribution gains of its new 330ml bottle. A package of measures aimed at spring-boarding Kronenbourg 1664 towards a place in the UK beer market's coveted Top Six brands began in June. These measures include a new recipe for the brew, new packaging, and a new £15m marketing campaign spearheaded by new TV and outdoor advertising. Scottish Courage, like other brand owners in the sector, has invested heavily in improvements in the method of dispense. A major project is currently underway throughout the UK to install new Kronenbourg 1664 fonts incorporating an innovative HIT (head injection tap) dispense system, which was launched with Miller's last year. Neal explains: "In addition to the head injection tap system, which delivers the head of the beer separately to the body of the pint and ensures a lasting, tight head, the font also has an "O" ring cooling system which ensures every pint from the font is cold. "Normally, the first pint out of a font has warmed up to room temperature, if it has not been used for 20 minutes and this system prevents that consumer disappointment. Not only does the HIT dispense give the consumer a great looking and tasting pint, it delivers greater profit margins to the publican. "Research shows that it reduces wastage by around 2%. In an outlet selling 150 barrels annually, this equates to an additional 900 pints, or £1,900 at retail selling price. It's a win-win situation for the consumer and the licensee." Neal adds: "The new stylish brushed-steel bar fonts also look great and these, combined with a repackaging of bottles and cans which play on Kronenbourg 1664's premium and continental heritage, gives the brand greater bar and shelf stand-out." Great Dane Carlsberg Export has also undergone a major relaunch in a bid to emphasise the brand's upmarket and cosmopolitan positioning. The relaunch is the result of extensive consumer research and a £28m investment designed to create a greater differentiation between standard Carlsberg Lager and premium-grade Carlsberg Export. A stylish redesign for the Carlsberg Export font features striking new gold and silver colours with the introduction of a dominant C icon. It is designed to project the brand's premium position and reinforce the style and sophistication of its new image. Coupled with this has been the introduction of a new and patented product delivery mechanism, which has been developed in conjunction with engineers at Birmingham University. The Vortex tap is said to improve head formation and retention at the point of dispense to ensure a speedy and perfect pint every time. It now takes about 14 seconds to pull a pint, which is 30% faster than the pouring time of a conventional tap. A partnership with another Danish icon, super model Helena Christensen, is helping to emphasise Carlsberg Export's sophisticated appeal. As part of the re-launch Carlsberg has also introduced a new 660ml Carlsberg Export bottle. Carlsberg-Tetley's customer marketing controller, Adam Young, says the company had responded to lager drinkers' desire for more distinctive premium brands. "In effect, we have capitalised on Export's strong performance with young, urban beer drinkers and repositioned it as a stylish, high quality, premium lager. "The brand is growing at a rate of 17% over volumes last year, but in outlets where we have installed the new font, we are experiencing regular increases of over 40%. "The font just looks right and more stylish for the market and we are getting higher-than-normal recognition levels for Helena Christensen's association with the brand, too. "There is now enough of a difference between standard and Export for consumers to understand and allow the products to sit side-by-side. We have a clear target market for Export and 60% of its volume is in that 18 to 34 target group." Young says the new font had already been lauded with two gold awards for its design and its effectiveness in terms of sales in the Marketing Brand Design Awards. He says C-T views competition from Heineken with a "great deal of anticipation". Young remarks: "A lot will be made of the fact that a major world player is entering the premium sector, but we relish the challenge and it can only give greater focus to the sector." Going Dutch Amazingly, the brand showing the most spect

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