The beverage business blog from James Wilmore
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Storm brewing over price of Heineken at the Olympics
31 May 2012 15:18
Us Brits love a good whinge. And when it comes to the price of beer, we’re world class.
The media knows this and has picked up on the fact that a bottle of 330ml Heineken will cost GBP4.20 at this summer’s Olympics. Or as the good old Daily Mail pointed out GBP7.23 a pint. Admittedly, for those that argue beer is a democratic drink, partly because of its price, this isn’t very democratic.
A spokesman for Heineken gave us this statement: "Whilst we would expect pricing for a premium beer such as Heineken to be comparable with prices at other prestigious sporting or events venues, we have no control over retail pricing which is a matter for LOCOG and their catering partners."
So, over to Olympic organisers, LOCOG. Paul Deighton, chief exec said the prices were “comparable to other major sporting events”. He added: “We believe that our prices are more than comparable to those found at other major sporting events, which because of their temporary nature are often more expensive than the high street.”
Oh well. At least at that price, it might deter binge drinking - another obsession among parts of the UK national media...
LIWF 2012: 'Cocooning' now a necessity for many drinkers
25 May 2012 17:09
'Cocooning' - staying at home to drink - is now a neccesity for many in Western Europe due to the economic climate, rather than a lifestyle choice like it was in the 1990s.
That was one of a number of nuggets that emerged from a Euromonitor briefing at the London International Wine Fair this week.
It was also revealed that Germany tops the charts, when it comes to consumption of private label wines. Around 45% of wine now sold in Germay is private label, according to latest figures. Apparently this is down to the high number of Aldi and Lidl stores in the country.
To download a full copy of the presentation, click here
LIWF 2012: Where was the fun of the fair?
25 May 2012 13:05
What's eating the grape industry?
I'd had a heads-up what the mood might be at the London International Wine Fair (LIWF) this week after being summoned to an unprecedented pre-event briefing by the organisers, where the broad message was: ignore all the carping, it's going to be brilliant! Was it brilliant? I'll leave you to make your own minds up.
But what struck me was a general air of despondence – particularly in the seminars. I'm told this is not a new thing. The only man who seemed vaguely chirpy was Dan Jago of Tesco. But then he would - he works for Tesco. (The story about his dad inventing Bailey's got an airing.)
He did have a moan though about the lack of innovation in the wine industry at the moment – in the product itself and marketing. At the same seminar, this was contrasted with the runaway success of Scottish craft brewer BrewDog.
Propelled by a razorsharp PR firm, Manifest, the Fraserburgh brewer is taking a relatively niche product to the masses in a fun and social media-savvy way. (Although many industry hacks I speak to have long grown weary of their guerilla-publicity tactics.)
Can a wine brand do a BrewDog? The general feeling was it was too much of a risk. But as Jago noted: “There's a lot of wines inhabiting a narrow flavour space”.
Slightly rich, some might think, as he went on to talk about the success of Tesco's Simply range, launched last summer, which includes Simply Sauvignon Blanc, Simply Muscadet... you get the idea. But with private label proving increasingly popular in these straightened times (45% of wine now bought in Germany is private label), these kind of products will be around for a while yet.
Another point, raised by writer Jamie Goode, was that consumers often feel confused by the “wall of wine” in a store.
And, as a first-timer walking around LIWF, this point resonated for me. So, though not aimed at Joe and Josephine Public, the fair would surely do itself no favours if, as occassionally mooted, it did allow non-trade folk in. Plus, some exhibitors, I understand, would hang their corkscrews up, never to return.
Lastly, I appreciate it's a place to do business for most, but was left thinking, where was the fun of the fair?
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Coors cools on support for minimum pricing
24 May 2012 10:19
Amongst the usual gnashing of teeth over minimum pricing recently, it was interesting to note the slight shift in position of Molson Coors on the issue.
Previously the brewer has stood out from many of its drinks industry peers by supporting the idea, at least "in principle".
But after the announcement from the Scottish government it was planning a 50p minimum unit – 5p more than its bid two years ago – Coors released this statement:
“We believe the proposed level of 50p per unit is out of proportion with the Scottish government’s 'targeted policy” commitment to address alcohol harm, however we welcome their commitment to review its impact.”
It also noted that “around 70% of all beer prices would increase in price in the Scottish off-trade”.
So what prompted this shift? Is it the shock that as it stands, the company could potentially take a hit on volume sales with a 50p minimum. But surely this would have been worked out before? Coors has also witnessed a form of minimum pricing in its home country, Canada.
Or perhaps it was Coors' UK CEO and president, Mark Hunter's brief time as chairman of UK trade body, the British Beer & Pub Association, that changed minds?
The BBPA has always faced a major dilemma over its stance on minimum pricing, counting the likes of Diageo - vehemently opposed to the mechanism - among its membership. If minimum pricing is successful, the BBPA's great fear is that it may encourage the government to use duty to control price further.
A number of its pub-owning members favour the policy, like Fuller's, but few speak publicly on the issue.
One pub company that has always backed minimum pricing, Greene King, left the BBPA in 2010, possibly due to the trade body's inability to support this position.
Consumer group CAMRA, which boasts around 140,000 members, is also very much in favour of a floor unit price, as it thinks it will encourage drinkers back to the beleagured pub trade.
Supporters of the move no doubt welcome the fact parts of the UK trade appears split on the issue, weakening the lobbying effort against it.
Minimum pricing in Scotland appears to be a done deal, but there is still years of debate left over whether it will arrive in England and Wales.
Whether Coors' shift will persuade others the idea is a bad one remains to be seen.
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Beery future for Coca-Cola Amatil?
16 May 2012 13:48
I spy some interesting manoeuvring by Coca-Cola Amatil (CCA).
Earlier today (16 May) the group announced that it has signed distribution deals with three major brewers – Grupo Modelo, Carlsberg and Molson Coors – to distribute their brands in some of the markets CCA is currently allowed to sell beer in, Papua New Guinea, Fiji and the Pacific Islands.
The company will have to wait until the end of next year before it can once again start to sell and distribute beer in its home market of Australia. CCA group MD Terry Davis suggested to reporters in Sydney yesterday that Foster's Fiji Bitter would be one product that it will sell there.
But, the agreements with Modelo, Carlsberg and Coors offers CCA an opportunity to become a major player in the Australian beer market.
With Davis only predicting slim volume growth of 1% to 2% in its Australian soft drinks and spirits business in the first half of 2012, the idea of bringing more beer brands to the market could prove attractive.
Although CCA may want to take into consideration that beer consumption in Australia is at a 65-year low.
Diageo's "dirty trick" brews up a Twitter storm
10 May 2012 11:51
One of BrewDog's understated PR 'episodes'
There really is nowhere to hide on Twitter. Particularly when you're a global corporation and you've been caught with your pants down, metaphorically speaking, by a notoriously PR-savvy independent brewer.
Step forward Diageo, the latest giant to feel the wrath of Tweeters.
Late yesterday, the company's name was trending – and not for the kind of reasons it would hope.
It came after maverick Scottish brewer BrewDog accused the drinks firm of intervening to stop them winning 'Bar Operator of the Year' at an awards ceremony in Scotland.
Apparently BrewDog got the judges' vote, but a (probably now former) representative of Diageo, sponsors of the awards, intervened to stop the brewer bagging the title.
Diageo has since owned up, offering this mea culpa:
“There was a serious misjudgement by Diageo staff at the awards dinner on Sunday evening in relation to the Bar Operator of the Year Award, which does not reflect in anyway Diageo’s corporate values and behaviour.
“We would like to apologise unreservedly to BrewDog and to the British Institute of Innkeeping for this error of judgement and we will be contacting both organisations imminently to express our regret for this unfortunate incident.”
Bad timing as well, as Diageo CEO Paul Walsh this week addressed the Ethical Corporation's Responsible Business Summit.
From our sources, we understand it is likely the Diageo representative involved went 'rogue' on the night and the incident points more to a personal grudge, rather than company-wide ill-feeling towards Brewdog. The Scottish brewer produces some fine craft beers, but nothing that would obviously worry Diageo.
Strangely though, the whole hoo-ha, while no doubt gutting for the staff at Brewdog's shortlisted bar, has been a PR win for the indie brewer.
As someone going under the name Flat Caps Coffee tweeted earlier : “Diageo do @brewdog a MASSIVE PR favour! Prob better than winning the award would have”.
While earlier, BrewDog lamented the fact on its official Twitter feed that Diageo was trending instead of their company name.
It's a funny old game.
The end of the traditional TV ad?
28 Mar 2012 11:46
What value is left in traditional TV advertising? Not much, if you believe the chief financial officer of one of the world's most advertised brands.
“The 30-second spot on television is no longer the way to do it. If you are like me, most of the TV you watch is recorded and then you skip over the ads.”
These are the words of Gary Fanyard, the Coca-Cola Co's CFO, speaking at last week's CAGE conference in London. Pretty strong stuff. But, Coca-Cola still sees opportunities in TV ads – it's just choosing its moments.
“The things you don't skip are the shows you want to watch because you want to talk about them the next day at work,” he added, “or things like the Super Bowl and the Academy Awards. These are the events we want to do a lot of advertising with, through tie-ins.”
Of course, like any right-thinking company these days, Coca-Cola is also using social media as part of its marketing armoury. Fanyard said one interesting aspect with things like Twitter was that consumers feel like they "own the brands", when they're talking about them online.
But, UK drinks producers, it appears, still believe in the power of the traditional TV commercial. Last week, brewer Greene King unveiled details of a new GBP4m campaign based on a new ad that will run across multiple channels next month, backed by online activity.
And Irn-Bru producer AG Barr also still sees value in the concept. Barr chief executive Roger White told me over lunch this week: “We still believe traditional marketing works, but you have to blend that with a digital perspective.”
So, not quite time to say 'cut' on the TV ad just yet.