Stewart's Stellar brand

The outgoing boss of Interbrew UK Stewart Gilliland has strong views on the industry. By Mark Stretton.

After the usual pleasantries and a brief chat about the thing he will miss most in the UK - watching Manchester City - it was time to focus on the other love of Stewart Gilliland's life, Stella Artois.

The boss of Interbrew's UK business is about to embark on the next phase of his career as head of the brewer's Canadian business and it seemed a good time to reflect on the company's iconic brew.

The meteoric rise of Stella Artois and Stewart's own progress up the Interbrew ladder seem inextricably linked. Alongside his predecessor Miles Templeman, the outgoing head of Interbrew UK is one of the main figures behind its continued dominance of the UK lager market.

"I can remember in my early days in sales trying to get listings for this brand," he said. "You can see the way it has developed and it continues to grow in every way. It is probably the healthiest brand in the UK market and has been for many, many years."

In the UK Stella Artois is a three million barrel-a-year brand, recording double-digit growth year-on-year. "It has a unique appeal," he said. "People do seek it out and tend to be very excited when they find it. I think it has a unique relationship with the consumer. Stella Artois has the ability to cross all social divides."

"I think that is largely due to the advertising, which continues to win more awards - Reassuringly Expensive is one of the longest-running FMCG [fast-moving consumer goods] brand campaigns ever."

Its success is undeniable but the Reassuringly Expensive campaign does not sit well with everyone. Surely this expensive brand cannot be the one that the supermarkets practically give away by the crate?

"It's the relativity of it," said Stewart. "People ask me if I'm happy about Stella Artois being sold in a working men's club at £1.50. Well, if the next brand is sold at £1.40 then I'm happy because in that context it is reassuringly expensive - the consumer has to make a conscious decision to spend more.

"In take-home, the Stella brand is at a 30 or 40 per cent premium to other lager brands."

That said, Stewart concedes that almost 80 per cent of Stella is sold through promotions at supermarkets, an undesirable statistic for any brand manager but one that is consistent with a whole range of consumer goods be it Nescafé or Andrex.

"The pricing [at supermarkets] is an irritation. One of my great frustrations is that some of our products, especially last Christmas, were at ludicrously low levels. The supermarkets were using those to drive customers in to their stores. To lose a couple of pounds a case - and they were losing money on Stella Artois - to get people in the store who then subsequently spend £100 is considered £2 well spent.

"It doesn't help us in terms of our premium positioning but successful brands create challenges."

However, the fact remains that it is particularly galling for licensees who have to buy in Stella at prices higher than those available to Joe Public at the local supermarket. Also, can licensees realistically charge customers £2.70 for a pint of Stella when you can buy 24 for a tenner at the grocers? "You could make that analogy about a whole host of things that are more expensive at the pub be it Coke or water, or anything else," Stewart said. "That is why pubs have to deliver an outstanding retailing experience and where pubs are successful, price is not an inhibitor."

Stewart, 46, has particularly strong views on the subject of retailing and beer quality. "Whoever you are in this industry you will complain about the quality of draught beer," he said.

"I would like to see this whole thing about quality and the image of beer at the consumer point of purchase.

"The UK is unique and alone in actually having probably the worst quality of draught beer in the world and I find that astounding given the great brewing tradition we have and the number of pubs.

"In fact we have the highest percentage of on-trade business apart from Ireland. There are very few markets in the world where the on-trade is so strong and yet we consistently serve our consumers poor quality beer. I think everybody is finally waking up to this now but getting the simple things right like quality, branded glasses, training staff so that every time the customer is passed over a pint, or a half pint glass, they are getting the right consumer experience is not a lot to ask - although sometimes it seems like we have a mountain to climb."

Stewart believes retailers must accept that draught quality and the experience of customers is fundamental and that pubs must find a way to hit the top quality marks time after time. "It always astounds me when I go to Brussels that you can go to any back-street café-bar, get a choice of beers and whatever you ask for always comes in the right glass and served in the right way," he said.

This is why the company was keen, through the British Beer & Pub Association, to get together with all the brewers, big and small, and come up with a consistent approach to quality.

"There might be slightly different techniques in terms of dispense between Stella Artois, Hoegaarden and Guinness but that's only about five per cent of the total quality programme," he said.

"We must get people really focused on quality of the cellar, quality of the lines and glasses - these are fundamentals that are relevant for every single draught product across the industry and I just hope we can do that because if we could I think we would start to see a step-change in pub volumes."

Stewart believes that suppliers, including Interbrew, must take more of a measured approach between distribution and quality. "We have to work very closely with the retailers," he said. "I don't think any other major branded manufacturer would allow its brand to be sold time after time in such a substandard way."

The Interbrew UK boss says brewers have been guilty of handing over brands all too readily to retailers who could cause irreparable damage to the name.

Interbrew has in some cases, particularly with Hoegaarden, which is more demanding to keep and serve, withdrawn its brands from pubs. "That is where brand owners have to get to in order to really drive the message home," he said.

Despite Stella's dominance as the top premium lager in the UK, Stewart says there remain huge opportunities to grow. "The distribution on draught in pubs is still only 40 per cent while Guinness, which is the most widely available draught brand is in the high seventies.

"I see no reason why Stella Artois could not get to that sort of level. In take home you will find Stella Artois in every single licensed outlet in the UK, its leadership in take-home is supreme - it's ahead of any other alcoholic drink - where the consumer has choice they pick up Stella Artois."

World domination is clearly the plan for Stella but some consumer champions would argue that somehow a brand loses value or its premium image, the more readily available it becomes, whether it is BMW cars or Burberry hats. "Well I can honestly say that where we are now going into the Mitchells & Butlers estate we are driving new people into those outlets so Stella Artois does drive people into pubs," Stewart said.

The Interbrew boss says the main challenge is to make drinking Stella in a pub "a very special experience" even if it is available in all 60,000 UK outlets.

But Stewart baulks at the suggestion that Guinness and Stella Artois are the only true brands in the UK beer market. "I think Foster's and Carling are successful brands," he says. "I would also give credit to people like Fuller's with London Pride and I think Greene King generally has done a pretty good job with its ales portfolio."

Stella may be the overwhelming flagship but Interbrew