Insight - Foster's Group revamps VB in beer market shift
Foster's Group will significantly raise its spend on Victoria Bitter in 2010 as part of a three-year plan to adapt the iconic brand to a rapidly changing Australian beer market.
Foster's will spend close to AUD30m (US$27.8m) on Victoria Bitter (VB) in the next year, VB Group marketing director Paul Donaldson confirmed to just-drinks today (15 January).
Funds will be spent on advertising, packaging and new products as the group embarks on a three-year plan to adapt the VB brand to a new generation of Australian beer drinkers.
VB has seen market share fall by around 5% to 15-16% in the last few years. "Our ambition over the next three years is to stabilise that and put it back into growth," said Donaldson.
VB remains one of the best selling beers across Australia, but younger men and women have prompted a rapid shift in market demand in recent years by switching to lighter styles of beer and, in particular, to low-carb beers.
Competition on the market has also risen with growing interest from foreign players. Japan's Kirin Holdings last year acquired full control of domestic brewer Lion Nathan, while SABMiller has increased its presence in the market with premium beers such as Peroni Nastro Azzurro.
"We've seen a really systematic shift in a beer market that was relatively stable for 20 to 40 years." said Donaldson. "We've seen a 10-fold rise in beers in the last ten years."
He added: "We still have an incredibly important group of loyal VB drinkers. The challenge is how do we get the next generation."
VB's Pure Blonde beer has gone some way to bridging the gap, rising to become one of Australia's most popular beers after launching just five years ago.
Brand extensions and packaging revamps will play a large part in further rebuilding the VB brand image. The group has launched a low-carb beer and also a lime-flavoured variety.
On the marketing side, VB is in the initial stage of working on a new advertising campaign, expected to be launched later in the year, while Donaldson said the group has been buoyed by the success of its "pop-up bar" initiative: a portable bar that consumers can win via an on-pack promotion.
VB is part of Foster's Carlton & United Breweries (CUB) Australian beer arm, which has performed relatively well over the last year after being structurally separated from the group's struggling wine division.
CUB's half-year performance was in-line with expectations, Foster's said in a trading update in December.
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