CLOSE-UP: LIVE ISSUE/BEER ADVERTISING - Pressure intensifies as brewers raise the stakes. Kronenbourg 1664's review could be a sign of things to come, Jenny Watts reports

Beer advertising. Those two words are enough to send shivers down

most creatives' spines, for if there's one thing they thirst for, it's a

beer account. As far back as 1974 and CDP's "Refreshes the parts"

campaign for Heineken, through to WCRS's "Dambusters" epic for Carling

in 1989, the category has been known for producing innovative and

entertaining work.



The stakes, however, have never been higher, as lager advertising is big

business. According to Mintel, beer accounts for about 30 per cent of

all consumer spend on alcohol, with lager's volume share of the beer

market now reaching 60 per cent. Within this sector, premium beers are

busily stealing market share from other types of lager.



Unsurprisingly, this has sparked huge competition between lager brands,

all of which need to identify their positioning in the market. Scottish

Courage's decision last week to put its Kronenbourg 1664 brand out to

pitch reflected the importance of forging a bond between consumer and

product.



John Botia, the brands director of lagers at Scottish Courage, says that

the incumbent Rainey Kelly Campbell Roalfe/Y&R had failed to carve out a

distinctive position for the brand in the market or draw attention to

its unique heritage.



"We've got to be realistic," Botia admits. "People know Kronenbourg

exists and, in stature terms, we know they appreciate a brand with a

heritage. But we haven't cemented the point that Kronenbourg is France's

best beer."



Despite strong sales growth over the past four years, the brewer clearly

sees making this point as the key task in an increasingly competitive

market. The dramatic loss of market share suffered by Holsten Pils,

among bottled lagers, and Carlsberg, in the draught sector, show how

quickly an apparently strong position can be eroded if drinkers do not

identify clearly enough with the brand.



Kronenbourg, along with the rest of the premium lager market, also faces

stiff competition from premium packaged spirits. An influx of performing

animals - such as McCann-Erickson's dancing cat for Bacardi Breezer and

J. Walter Thompson's talking dog for Smirnoff - are helping the sector

slurp up a greater share of the beverages market as a whole.



In using comedy to make an impact on consumers, the alcopops are

stealing the traditional clothes of beer brands. It's a tried and tested

route to forming an emotional bond with viewers, with examples including

Stella Artois' "Reassuringly expensive", Carlsberg's "Probably the

best ...", Fosters' "Honorary Australians" and the much-vaunted

Budweiser "frogs and lizards" and "whassup?" ad campaigns.



Mintel suggests that volume sales in the lager market have grown by an

estimated 39 per cent between 1996 and 2001. This is partly a reflection

of price reductions in the market, and as advertising needs to draw

attention to this competitive pricing, above-the-line spend has

sometimes been ploughed into price-based promotional activity.



Despite this, the above-the-line spend continues to be heavyweight.

Research by Mintel has also shown that 58 per cent of lager consumers

prefer to buy a well-known brand. As a result, brewers are choosing to

focus on their core brands, with the biggest continuing to get bigger,

by both volume and value.



This trend is exacerbated by growing consolidation among the brewers

themselves. The main players in the market are Scottish Courage,

Interbrew, Carlsberg-Tetley, Anheuser-Busch and Holsten. In 2000, both

Whitbread and Bass pulled out of brewing, opting instead to sell their

operations to Interbrew, the Belgian brewer.



Scottish Courage's portfolio includes Fosters, Beck's, Kronenbourg and

Miller Genuine Draft. Interbrew, now the world's second-largest brewer,

boasts Stella Artois, Rolling Rock, Labatt's and Hoegaarden in its

line-up, as well as marketing Heineken.



Interbrew's interests also include the previous Bass brands Carling,

Tennent's and Grolsch, with Carling and Grolsch subject to sale.



Aside from the wave of consolidation, brands have also been riding a

shift in the way beer is purchased, with sales of bottled lager

increasing significantly. The canned lager sector's share of the market

is declining as brewers rush to make both domestic and imported beers

available in bottles. Mintel figures for last year show Budweiser

retaining its top position as the leading bottled lager brand by

sterling value - due in no small part to the much-loved "whassup?" and

"frogs and lizards" work.



Beck's, whose presence Scottish Courage wants to boost as a mainstream

lager, came in second. However, the ground behind it is being swiftly

swallowed up by Stella Artois, the most strongly branded of the premium

lagers, whose share increased the most in the three-year period between

1997 and 2000. With "hero's return", Lowe Lintas continued to play on

the brand's classic "Reassuringly expensive" theme. The latest spot

features a French bar owner denying a glass of cherished Stella to the

war hero who saved his son's life.



Holsten's position at number four looks tenuous. Its 2000 share was up

only slightly against the 1999 figure - a likely trigger for last year's

review when TBWA/London managed to cling on to the brand - and it is

believed that sales have suffered further lately. In an attempt to stem

the decline, the brand drafted in the actor Ray Winstone for an ad

campaign aimed at the 25- to 40-year-old audience, but there is no sign

of things picking up for the "daddy" of lagers.



Meanwhile, Miller Genuine Draft's recent campaign featuring the Fun

Lovin' Criminals - part of a marketing budget reputed to be worth £9 million - doubtless helped boost the lager's presence into fifth

place. Kronenbourg follows in sixth.



Against this profusion of eclectic bottled beers, a visibly branded bar

tap can stand out. And Carling once again tops the list of draught lager

brands, by value, according to Mintel. The Leith Agency's latest work

for Carling featured a man shipwrecked on an island enlisting the help

of an obliging crab to help chill his cans. As with other executions in

the campaign, the logo and tap design is planted firmly onscreen at the

end of the spot. Carling is followed by Fosters, which continues the "He

who thinks Australian" campaign, and then Stella Artois.



Carlsberg, whose most recent ads featured a lorry driver caught taking

the lager out of the country, comes in behind Stella and posts a

worryingly small increase of only 2 per cent over four years. It is

followed by Heineken, which also only records a small increase in share

and will be hoping for greater things from the caterwauling B-list

celebrities fronting this year's headline-grabbing ads through Lowe

Lintas. Next comes Kronenbourg which, despite Bostia's doubts, has

achieved by far the highest increase in brand share over the three-year

period.



The spend of the various UK brewers remains broadly in line with their

market share - with the exception of Anheuser-Busch, which is still

being heavily subsidised by its American parent. However, it will be

interesting to see how this changes next year.



One thing is clear. Despite stiff competition from other drinks, the

premium lager sector will continue its growth. While that theoretically

means a larger piece of the pie for all, the fate of Rainey Kelly's

Kronenbourg business shows that brands are under great pressure to

secure a positioning sooner rather than later. The high levels of

adspend and the intensity of the competition show no sign of

abating.



LEADING BOTTLED LAGER BRANDS

Brand Sales (pounds m) Sales (pounds m) Change (%)

1997 2000

Budweiser 266.0 360.0 35.3

Beck's 159.0 225.0 41.5

Stella Artois 67.0 180.0 168.7

Holsten Pils 122.0 138.0 13.1

Miller 35.0 88.0 151.4

Kronenbourg 33.0 80.0 142.4

Market Total 1,830.0 2,820.0 54.1

Source: BLRA/Mintel.

LEADING DRAUGHT LAGER BRANDS

Brand Sales (pounds m) Sales (pounds m) Change (%)

1997 2000

Carling 966.0 1,070.0 10.8

Fosters 670.0 770.0 14.9

Stella Artois 470.0 660.0 40.4

Carlsberg 510.0 520.0 2.0

Heineken 390.0 440.0 12.8

Kronenbourg 135.0 405.0 200.0

Market Total 5,154.0 5,535.0 7.4

Source: BLRA/Mintel.