Plotting the perfect murder
By Ian Fraser
Published: The Sunday Herald
Date: January 25th, 2004
Image courtesy of The Drum
Freed from restrictions north of the Border, brewing giant Coors is challenging the big two beer suppliers in Scotland, writes Ian Fraser
Coors Brewers has stated its intention of smashing the “duopoly” which for many years has dominated Scotland’s beer market and achieve a 10% share within two years through innovative distribution and heavyweight marketing for its “laddish” Carling brand.
The brand – acquired by Colorado-based Adolph Coors in December 2001 from Belgium-based Interbrew as part of a (pounds) 1.2 billion deal – was until 2002 restricted to England and Wales, where it is the market leader. The one time lager lout’s favourite had been deliberately kept out of Scotland by Interbrew and former owners Bass, both of whom preferred to focus on the more established Tennent’s brand north of the Border.
However, now that the two brands are in different hands, a battle is erupting for the hearts and minds of Scottish publicans and beer drinkers. The latest figures on a “moving annual total” basis to December 27 suggest that Coors is on track to achieve its ambitious goals, which may be causing varying degrees of consternation at Interbrew and at Scotland’s number two player, Scottish Brewers, owned by Edinburgh- based Scottish & Newcastle.
The Nielsen Scantrack figures show that the Coors’s stable of beer brands – which also include Coors Fine Light, Grolsch and Caffrey’s – have boosted their share of overall beer sales in Scottish grocery multiples to 6.4% for the year to December. This means a 49% surge on the previous 12-month period, albeit from a low base.
By contrast, the Scan Track figures show Scottish Courage, which has been beset by supply chain problems in recent months, has seen its overall share of the grocery sector fell 7.6%, from 34.6% to 29.7%, with sharp falls for both Miller Pilsner and Miller Genuine Draft. Last week, however, Scottish Courage insisted it had put most of its supply chain problems behind it, and that market shares were recovering.
The company said improved service levels had enabled Foster’s, Kronenbourg, John Smith’s and Strongbow to put in good performances over Christmas.
John Dunsmore, Scottish Courage’s managing director, said: “The difficult period of disruption caused by the introduction of the new supply chain is over.” Interbrew, which owns the UK’s leading premier lager brand, Stella Artois, in addition to Tennent’s appears to be holding up better to the onslaught from Coors. The Leuven-based giant boosted its Scottish share in outlets including Tesco, Sainsbury’s, Asda, Safeway and Somerfield from 35% to 38.5%, a near 19% increase.
Overall Interbrew has a near 50% share of the total Scottish market, boosted by the success of its “Icelandic women” and “murdered pints” TV commercials for Tennent’s. Despite the arrival of Carling on its home turf, Tennent’s last week said it had increased its stranglehold of the on-trade (meaning pubs and other licensed premises) to 50.1% in November, according to Nielsen figures.
Even so Paul Miller, managing director of Coors Brewers in Scotland, says he is cheered by the latest set of figures. He told the Sunday Herald: “There is a duopoly in the Scottish market, with Tennent’s and Scottish Courage having more than 70% between them. Our primary goal is to tackle that.
“It seems ironic that the competition authorities were so keen to see a fourth player in the UK market but that they are happy to allow just two in Scotland. We have a five-year plan which includes making Coors a serious player in Scotland.”
However Pat Duffy, editor of Scottish Licensed Trade News questioned whether the Nielsen figures are as robust as some brewers maintain. “Different beer companies are contesting some of these figures. We’ve seen some eyebrow- raising stuff year-on-year.”
Carling boosted its chances of converting regular Tennent’s drinkers with its three-year shirt sponsorship deal with both Old Firm sides which kicked off in May 2002. The £12 million deal was reinforced over Christmas with a couple of “sensible drinking” television commercials featuring Celtic manager Martin O’Neill and Rangers manager Alex McLeish.
These act to counterbalance the more laddish campaigns put together by The Leith Agency, showing a man licking the carpet clean as his girlfriend spills beer from her can.
Miller said: “We are the only really serious challenger to the duopoly here. I see it as an exciting challenge, which should be good both for consumers and the trade”.
“Under a duopoly, pubs are prepared to settle for a certain standard of service. We are able to bring something else to the party and provide pubs with a positive choice.”
Miller – who spent 10 years with Grand Metropolitan subsidiary International Distillers & Vintners – cites innovations such as Carling Extra Cold, which makes it possible for hostelries to serve Carling 4C cooler, than through conventional taps. He also mentions branded glassware and fast-pour dispensers that are capable of delivering one pint of Carling in six seconds. These are popular with busy outlets such as JD Wetherspoon’s Counting House in Glasgow.
Coors has also installed multi-dispense units at the SECC which can pour six pints at a time. “We broke all records when the Rolling Stones were in town,” Miller added.
Miller seems delighted that Carling has exceeded its target of being in 1000 pubs by the end of 2003. He says it reached 1040 by that date. Of those Miller says that over 80% are selling Carling Extra Cold. Average sales are 121 gallons per month per outlet.
Duffy said: “They are ahead of schedule in terms of the Carling presence in Scottish bar tops. You can’t argue with that.
“Providing technical support to the independent sector will be key in improving that position.”
The brewer is also increasing the focus on music sponsorship to attract a slightly more cultivated type of drinker – and because of its decision to end sponsorship of England’s Premier League. The total UK annual marketing budget for Carling is £80m, of which Miller said around £20m goes on the music sponsorship programme. Last year Coors was behind the £3m revamp of the former New Bedford cinema on Glasgow’s southside which was renamed Carling Academy.
Another brand in Coors’s UK armoury is its eponymous US brew, Coors Fine Light. Although due to the emphasis on pulling Carling up by the boot straps north of Hadrian’s Wall, this will receive proportionately less marketing support than in England and Wales. Miller sees CFL as more of a niche brand and it is currently sold only in “leading-edge style bars” such as Edinburgh’s Opal Lounge and Glasgow’s The Cube.
“We’re out to get consumers when they are young,” said Miller. The target age group are 18 to 25-year-olds. “It is less bitter than something like Becks, so you can ‘session’ on it.”
However, Coors does face a struggle to escape from aspects of its past. The company was found guilty of racial discrimination at its breweries in the 1960s and during the following two decades Coors faced boycotts from liberal groups because of allegations it was contravening labour and environmental laws and that the Coors family was bankrolling right-wing fundamentalists in the US.
Miller said: “That is in the past and has resulted in confusion between the company and what certain individuals within the Coors family did with trust money.
“It relates to a situation 25 to 30 years ago, but has been stirred up by mischief makers on the net. We’ve spent a lot of time talking to students to explain the true position. That is not an issue now although it does rear its ugly head from time to time.”
CATCH UP:
Adolph Coors bought England’s biggest selling lager brand, Carling, in December 2001. The deal pushed Coors to number two in the UK beer market. With around 20% of the market it lags Scottish & Newcastle but is ahead of Interbrew (17%) and Carlsberg Tetley (14%). The company is playing catch up in Scotland however. Copyright 2004 SMG Sunday Newspapers Ltd
Short URL: https://www.ianfraser.org/?p=848
Posted by Ian Fraser
on Jan 25 2004. Filed under Article Library.
You can follow any responses to this entry through the RSS 2.0.
You can leave a response or trackback to this entry