Bucking the trend
The current plight of the lager market has been covered in some depth on these pages over the past few weeks.
One of the big issues for the market has been the decline in premium lager sector. Brands such as Grolsch and Stella Artois have been suffering significant volume declines. Nielsen statistics for the year up to November 2007 show premium lager volumes down by 10 per cent.
And yet within premium lager there are some interesting trends - not least the growth of brands that could be called, for the want of a better word, super-premium.They are beers that have real provenance, are often connected to the food occasion and are, for the most part, imported.
And the company spearheading this mini-revolt is Miller Brands. It has a decent portfolio of brands but has enjoyed particular success in the past year with its Italian brand Peroni. It is increasing sales volumes in both packaged and draught - and all at a premium price.
Here, The Publican talks to Gary Whitlie, managing director of Miller Brands, about the success of Peroni and how he hopes the classic Czech lager Pilsner Urquell will follow in the same vein in 2008.
What is the strategy from SABMiller?
The parent business has said that they have three key brands that have real premium potential: Pilsner Urquell, Miller and Peroni. The former has very much been earmarked as a jewel in the crown and Miller had already established its credentials.
But essentially all three brands are international brands that we can market in a category which has shown growth potential (ie premium beer).
Are they simply pursuing a strategy of trying to 'out-premiumise' the opposition"?
You have to view our strategy as putting a brand into market that has a real consumer need, rather than pushing a brand into a country simply because we have it and then throwing it at the wall.
The premium market is one that is really opening up. But we are careful with our approach. We want a lot of insight into a product and the market we might launch into.
Why are your brands experiencing growth when some of the more mass-market brands are declining?
There are many dynamics associated with this. The whole on-trade itself is premiumising. And that is following general consumer trends in the leisure industry. Plus there is the concept of everyday value and treat.
So the pub is the place where you will go to have your regular pint but from time to time people want to treat themselves; and that is a real opportunity for us and our brands. Therefore we have focused on outlets where our target consumer will go
What strategy have you used to market Pilsner Urquell?
"When it comes to Pilsner Urquell I think we felt it was time to start afresh. It had got into problems because it had been discounted to chase volume. So we stopped that and started to re-position it and in the last nine months it has become the second focus brand for us.
Therefore we need to focus on the right kind of outlets as well as on a draught offering. But it is about honing our offering - which is what we are doing now; targeting it at consumers who are slightly older and more discerning.
Of all the things I could do before retiring that would make me most proud, I think re-establishing Pilsner Urquell in the UK would be it. I think its time has come."
What strategy have you used to market Peroni?
"When we first started we agreed that the focus should be on Peroni and that this would lay the foundations for our other brands. In Peroni we had inherited a brand which had great credentials with excellent recognition factor, mainly thanks to the work done in Pizza Express.
"From that point we have put a great deal of effort in putting the brand into premium pubs and bars across London. We also avoided pushing the brand into the off-trade and creating what is known as 'big box value' (we will not go any bigger than a 12-pack) - and that has helped us a lot. A lot of this strategy was simply down to us following the insights given to us by consumers."
