Carlsberg has stirred up a lot of noise for itself over the past few months, starting with former CEO Julian Momen’s departure, having joined as CFO in 2012, which was then followed by the reformulation and rebrand of the brewer’s hero lager to Carlsberg Pilsner earlier this year.
Momen’s decision to step down also led to a restructure of Carlsberg’s management team, which has now been converted into something resembling a more traditional set-up – managing director at the top and two reports below, each one looking after the on-trade or the off-trade channels.
Carlsberg Tetley sales rep
Cadbury customer marketing controller
Cadbury customer marketing director
Premier Foods account director, Tesco
Premier Foods sales director, grocery
Carlsberg UK vice-president, nationals business unit
Carlsberg UK vice-president, on-trade business unit
It is the new vice-president for on-trade Alistair Gaunt who I meet at a London pub near Fitzrovia, which won’t be named for reasons that will soon be made apparent.
Gaunt waits for me inside the pub, which is packed with people escaping the intense heat of the afternoon sun. Just as we get to talking about perfect serves, a bartender plonks down a pint of Carlsberg Pilsner, but Gaunt isn’t happy and points out that the glassware is filthy, which is causing large bubbles to form in the drink.
The pint, served in the brand’s new chalice, is taken away by the bartender who returns with what he believes is a better pint. But no. Not only is the new glass dirty like the first one, it is also the wrong brand. Needless to say, Gaunt sends this one away and no further attempts to deliver a fresh pint are made.
Apart from being slightly funny, it is important to mention the kerfuffle because the bartender didn’t understand why the pint had been refused twice. It is the basics of pouring and serving a pint that can make or break a customer’s experience in a pub, Gaunt points out.
Particularly after Carlsberg’s rebrand and reformulation, backed by a significant marketing campaign, it is vital when punters get their pint of Pilsner that it is served correctly.
Last year, when the lager was just Carlsberg, the brand’s on-trade volume sales dipped by 13.1% to 1,036,724 hectolitres (hl), while its value had plummeted by 12% to £558.5m, according to The Morning Advertiser’s Drinks List: Top Brands to Stock 2019, which ranked the beer the third best-selling lager in the on-trade.
Since the reformulation, though, sales have improved and “we’ve seen ROS jump 12% for more than one of our national customers, while many of our independent partners have seen sales double”, Gaunt says. “But we’re seeing sales increase across the board, which is fantastic.”
Perceptions around quality
While we’re yet to see any hard figures showcasing a wider sales jump, Gaunt adds perceptions around quality have grown eight percentage points since the relaunch.
“Carlsberg has been in a tough place for a number of years and we needed to do something about it and be honest about it, and we’ve actually had a positive response as a result.
“We’re trying to force reappraisal and it’s unfortunate I couldn’t land it here [in this pub], but the quality of the brew and the quality of the glass is getting a fantastic response.”
The new campaign promoting Pilsner focused on the fact the old brew “probably wasn’t the best beer”, using tongue-in-cheek adverts to get the message out there. It was a risky move that appears to have paid off, with few or no customers venting about the fact Carlsberg’s previous brew was also purported to be the best.
I went to the Chop House in Manchester and I think that is an outstanding pub. They’ve got outside areas and can seat 100, the food is great and the drinks are great too. It’s probably my favourite pub of what I’ve visited recently.
According to Gaunt, he is unaware of anyone complaining about being misled or feeling like Carlsberg was laughing at them for selling what it now deemed and inferior product. “I’ve not really heard that [people complaining],” he says.
“There’s been talk about the honesty of it and that’s the feedback we’re getting from customers about it. It’s honest and bold.”
For the next five years, Carlsberg will focus on driving the sales of the new Pilsner further. This means there won’t be other significant launches or refurbishments, however, Gaunt lets slip we could see something from Carlsberg’s Poretti brand soon.
“Carlsberg Pilsner is pretty big business and it is now in the standard plus category. It was in the standard, but we’ve repositioned it into standard plus and it’s in most outlets with a mainstream lager offering.
“For me, there’s plenty to go at from within the thousands of outlets in the UK. Carlsberg is within 18,000 to 20,000 outlets and there are plenty of places left to go despite that.
‘Not in a position to share’
“Certainly on Poretti we’ve got plans that we’re not in a position to share yet in terms of how we can expand that in the UK,” he says.
“It would be ambitious to say the plans are going to be as big as those behind the Pilsner rebrand, as Poretti is about 30,000hl.
“So for me, yes Poretti has a role to play and we are working on what we do with it, but I can’t share any more at this stage.”
It is refreshing to see a brewer like Carlsberg refocus on a core lager in the UK, especially since over the past few years the mainstream lager category has struggled to significantly boost sales.
With that, many businesses would be tempted to refocus on a growth area, rather than pump more money into a declining sector, but Carlsberg believes the lager category has a long and successful future ahead of it – after all, it is the largest beer segment in the UK on-trade.
What is a Vice-President of on-trade
Some 22 years ago I started my career at Carlsberg as my first job straight out of uni and spent a few years working for Carslberg.
Then I moved out to join Cadbury and spent 18 years in various roles across sales, customer marketing and all sorts of channels primarily at Cadbury.
I rejoined Carlsberg about two-and-a-half years ago to head up national accounts across all channels.
My role encompasses everything in the on-trade.
“If we can get the quality right, then lager has a place to play. Craft has done a great job of re-energising the market in terms of bringing in some broader tastes and experiences,” explains Gaunt.
“But there is always a place for a good quality pint of lager, otherwise we wouldn’t have invested in the Pilsner.”
With the product bedding into the market new management structure in place, clearly Carlsberg is expecting big things in its future.
Momen left the business in a good place, says Gaunt, but he believes incoming managing director Tomasz Blawat, who is joining the UK from Carlsberg Poland, where he’s headed the brand for six years, is likely to further strengthen the UK arm of the business.
“Julian left things in a good state,” he says “I don’t see that the new MD will need to do a 180-degree change. It’s about evolving and building, and a lot of the things Julian put in place are still our focus, like Carlsberg Pilsner, which is the name above our door.”