just the Answer - Anheuser-Busch InBev UK president, Stuart MacFarlane
Stuart MacFarlane became president of Anheuser-Busch InBev's UK arm in 2008
Following news that Anheuser-Busch InBev is to launch a cider under its Stella Artois brand in the UK, just-drinks thought it was high time we caught up with the brewer's UK president. Here, just-drinks' deputy editor, Chris Mercer, quizzes Stuart MacFarlane on Stella Cidre, the Stella brand's rehabilitation process and the brewer's UK business in general.
just-drinks: What makes you confident of being able to take on established players in the cider category?
Stuart MacFarlane: When you're the nation's favourite alcohol brand, consumers have raised expectations of everything. We've worked hard to make sure that our cider is significantly ahead of the industry benchmark. It's crisp and refreshing but not overly sweet. You would expect us to raise the quality benchmark of cider. It was important that we had a cider that performed better than our competitors, both in core cider and premium cider.
j-d: Isn't there a risk that you will cannibalise sales of your lager brands?
SM: You know, when we launched Beck's Vier I was asked that question, when we launched Stella Black I was asked that question, when we launched Stella 4% I was asked that question. The cannibalisation of Stella 4% is only around 4% to 5%. I'm very happy to have 95-96% of sales on that brand that are incremental.
Stella Cidre can be the flywheel for cider category growth. We will bring more premium drinkers into cider than any other brands can do, because they don't transcend other categories like Stella does. The Stella Artois brand can do what none of the other brands can do. This is game-changing, we are the first beer brand to move into cider.
j-d: Why are you launching it now?
SM: Well, it's taken us just over a year to develop it. Our consumers told us the time was right and the cider category is still growing by between 5% and 10% year-on-year.
j-d: Who are you targeting? Are you looking to extend the Stella brand to more women, for example?
SM: No, women are not a particular target. We're targeting premium drinks consumers from 20-somethings and upwards. We're less concerned about different demographics.
j-d: In terms of pricing and positioning, where will Stella Cidre sit in relation to other ciders?
SM: We are very focused on the premium end in both the on- and off-trade. Bottles will be the primary format, rather than draught. In the off-trade, it's up to retailers to set the pricing, but we expect to be priced competitively with the other big brands in the category.
Stuart MacFarlane, president of Anheuser-Busch InBev UK
It's very important to us that this can be premium and accessible. Premium brands like your Aspalls and Westons are never going to be totally accessible everywhere in the country, but we can do that. We want it to be available for consumers to share over a meal in a restaurant or a gastropub, as well as in the boozers - the community pubs.
j-d: It's three years since you took over as president of A-B InBev UK, at a time when Stella Artois had experienced problems. How do you perceive Stella's reputation today?
SM: Three years ago a lot was perceived to be wrong with the brand. But, in fact, 95% of our brand was right. Our job was to accentuate those positives. Obviously things were written about certain names given to the brand, names which, by the way, I find offensive, truly offensive. Stella is a quality brand and it remains the biggest selling alcohol brand in the UK.
j-d: What specifically have you done to reinvigorate the brand?
SM: We went back to basics. We've emphasised the quality of the brand and made sure that we accentuated the positives, including aspects such as eco-marketing.
As a company, we are leading innovation in drinks. Actually, I could argue that A-B InBev is leading innovation in the entire FMCG sector. We've launched Beck's Vier, Stella 4% and Stella Black. Beck's Vier was awarded the most successful launch in the on-trade, Stella 4% was the most successful launch in the off-trade. Anheuser-Busch InBev has grown volumes in the UK over the last three years and Stella Artois has been growing share.
j-d: As well as innovation and focusing on quality, have you sought to reduce the amount of Stella Artois sold at discount in the off-trade?
SM: We don't have control over pricing in the retailers, it's their job to set the prices. It's our job to make sure we've got the right quality. Many, many consumers have reappraised the brand.
j-d: A-B InBev has a reputation for cutting costs, some might say ruthlessly. How have you balanced that against building brands?
SM: I sell beer for a living, it's the best job in the world. A-B InBev is the biggest brewer in the world and I have Beck's, Budweiser and Stella. Yes, we have been cutting costs, but we are good at cost cutting and top-line growth. We are good at both. That's what makes us a better beer company than the others.
j-d: Do you still intend to close the Stag Brewery near London?
SM: The brewery was originally supposed to close last year, but we said a year ago that we would keep it open an extra year. Basically, we were brewing too much Budweiser to close it. We'll update on our plans in May.
j-d: So, has Budweiser's momentum continued in the UK, albeit from a low base?
SM: Up to the end of the third quarter of last year, it was storming. I can't comment on its more recent performance, because the company is in a close period [ahead of full-year and fourth quarter results announcement].
j-d: We've just seen that beer sales shrank again in the UK last year. What's your assessment of the UK beer market going into 2011?
SM: We are way too pessimistic in our industry. There are opportunities in beer and opportunities in cider. If more companies sought to find opportunities and to innovate more, they'd be more optimistic. I urge the people in our industry to find that opportunity. Other brewers need to start acting more like FMCG companies.
The number one problem that we face is the Government and the unfair tax burden on the industry. If there's anything I could change, it would be the Government's approach to our industry.
For just-drinks comment on the Stella Cidre launch, click here.
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