Stella Artois is the top-selling beer brand in the UK off-trade and appears to have achieved this through the unlikely combination of upmarket advertising and discount pricing. Olly Wehring spoke with Jon Woods, director of sales for grocery retail at Stella's owners, Interbrew UK, to learn more.
Being all things to all men is the epitome of an unattainable goal and in brand marketing surely a particularly unrealistic one. But there is something of this in the positioning of Stella Artois. In television and press advertising, the beer cocks a snook at bargain-hunters, using the tagline "Reassuringly Expensive", while the brand is also the sole sponsor of the UK's second-most prestigious men's tennis tournament at Queen's Club in London. And yet, walk into almost any off-licence on any British high street, and six cans of Stella will be available for only £5, the same price as Kronenbourg, Foster's or Carling.
In spite of this apparent contradiction, or maybe even because of it, Stella Artois is the top-selling beer in the off-trade in the UK, selling more than double the amount, in value, of the second-placed beer last year. So how has this contradiction appeared to work in Stella Artois's favour?
"The issue of pricing comes up quite regularly between us and customers and journalists," says Jon Woods, director of sales for grocery retail at Interbrew UK, the owners of Stella Artois. "If there were evidence that price discounting was having a bad effect on the brand, then we would be concerned, but we don't have any such evidence." In any event, Interbrew's figures suggest that the brand is less subject to discounting than its rivals. According to Interbrew, in the 12 months to May 2004, the average price per litre in the UK off-trade of Carlsberg was £1.29, while Foster's reached £1.38 per litre. But Stella Artois was standing tall at £1.75 per litre. Nevertheless, one could surely argue that price discounting per se goes rather against the grain for a brand which markets itself as "reassuringly expensive".
There is a school of thought that advertising Stella Artois as being expensive, then selling the product at discounted prices in so many off-licences and, more prominently, in multiple chain grocers runs the risk of devaluing the brand in the eyes of the public. But Woods points out that this is an area where the supplier has limited power. "It's part of retailers' strategy to drive footfall," he says. "We promote the brand with retailers, there's no doubt about that, but there is, as most people know, very limited legal scope for us to influence the prices retailers set Stella Artois at."
So while the pricing issue for Stella Artois is of concern to Interbrew, the company has little room to act. And with Euro 2004 in full swing, the company is keen to capitalise on what should be easy-pickings for brewers. "Beer as a category is used by retailers to drive footfall for retailers in the UK during football events and at Christmas," notes Woods. "For the entire category, Euro 2004 is very important. The World Cup in 2002 saw a bigger lift in sales than Euro 2000, and yet the World Cup in Japan and South Korea took place on a totally different time zone to the UK." Indeed, the matches in 2002 were broadcast in the mornings in the UK.
"This summer, hopefully we will have the perfect scenario," says Woods. "Last year, the UK had excellent weather, the year before that we had the World Cup. With good weather and a major football tournament at a reasonable hour, that's a major combination." Woods also has an interesting theory about Stella Artois during the World Cup in 2002. "We got the impression that a lot of Stella Artois was being bought and not consumed at the time. So far this year, however, it would appear that consumers are drinking it at the same rate that they are buying it."
International football tournaments aside, the brand has been busy elsewhere. "I think the best way to push Stella Artois is to tie the brand in with things that consumers are interested in," Woods says. "We've recently had a tie-in with Stella Artois bottles and Quentin Tarantino films in Sainsburys. Hopefully we will do more of this kind of thing in the future. In the last four years, we've also been linking Stella Artois with pre-packed curries in Asda. I think there's a lot to go on in this area."
Going forward, Woods can only see one real threat to Stella Artois' dominance of the UK off-trade, and it is an issue he feels the brand is already handling perfectly well. "We've got to get our forecasting right in order to pre-empt supply issues," Woods warns. "With the weather and the football, there's a lot to think about. Last summer, the hot weather caught out some retailers and suppliers. Our success in this area hinges on the need to keep the frequency of communications high between ourselves and the retailers."
According to Woods, the success of the brand in the past hangs on the consistency of the message sent out to consumers. "We've used the same advertising campaign for 24 years with Stella Artois," he says, "and that campaign has carried great resonance with consumers."
In the last 12 months, Stella Artois has grown by 15%, with the brand racking up £455m in take-home sales, and appears to have founded its dominant position on the impossible combination of upmarket positioning and discount pricing. "The UK retail market is a very competitive one for both retailers and brewers," Woods concludes. "This kind of competition has driven strong performance and has brought out the best in us." Now that's reassuring for Stella Artois.
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