Images of the Australian outback, baked by burning sun and populated by hardened Aussie farmers who wouldn’t give a XXXX for anything else are instantly recognisable as the advertising campaigns for Castlemaine XXXX, despite the fact that some of them date back to the 1980s. In fact, so striking is the advertising that it still registers one of the highest recall rates by consumers in the sector.
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And yet this is a brand that has been in steady decline – perhaps even freefall – for the best part of a decade, losing out to rivals such as Carlsberg, Heineken, Carling Black Label and, most galling of all, Foster’s.
Launched in the UK in 1984 by Allied Breweries, it became part of the Carlsberg-Tetley portfolio in 1993. In 1995, it held the number four spot in the UK lager market. Today XXXX has slipped to number five in the standard lager category in the on-trade and number six in the take home market. The fall in volume share is more alarming.
However, Interbrew UK, acquired the rights to this fading lager at the end of last year from producer Lion Nathan, in order to plug the gap in the standard lager sector left by Heineken’s decision to pull its Cold Filter brand, which Interbrew distributed, out of the UK market.
The Aussie choice
Despite the success of Stella Artois, which has gone some way to transcending the barrier between premium and standard brands, there was never any question of Interbrew ignoring the standard category, once Heineken withdrew its brand from the portfolio.
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By GlobalDataThe standard market in the UK is worth close to £5 billion a year and makes up a third of all beer sales. “Stella is growing at 15% but we want to be a major UK drinks supplier so it is important for us to be in the standard category,” says Castlemaine XXXX marketing manager Matthew King. Interbrew UK was an important player in the category, with Heineken Cold Filter selling in the region of 1m barrels a year. But it is attempting to replace it with a brand, Castlemaine XXXX, which sells a paltry 150,000 barrels. As King says: “This is a big task for us.”
Interbrew had been conscious for some time that Heineken was likely to pull out of its distribution arrangement for Cold Filter and therefore had plenty of time to come up with an alternative brand for the bottom end of the market. Having looked within its own, extensive portfolio, both in the UK – where it tested a new launch altogether in the Midlands called GB – and internationally, it decided to go outside its own fold.
The official XXXX launch under the Interbrew flag came early this month – as Carlsberg-Tetley’s contract ran out. And it is being backed by a £9m marketing programme, which includes new advertising and a packaging overhaul. According to King this makes the brand the most heavily supported lager in the UK, in terms of pounds per barrel sold.
The significant marketing package is a reflection of the work that needs to be done to resurrect Castlemaine in a highly competitive market and to achieve the company’s ambitious goals. “Our objective for Castelmaine XXXX is to re-establish it as a mainstream standard lager and to ensure that both customers and consumers see the brand as a credible offering,” says King.
In real terms, he adds afterwards, this will mean tripling or quadrupling the brand’s volumes in the space of a year.
In a flat market, with well-established brands such as Carling and Carlsberg, this will be no mean feat. However, the goals and the sum of the money being invested are also testament to the faith the group has in a brand which, it believes, still has an important part to play in the UK lager market.
Its hopes lie in the belief that Castlemaine has faltered because of a portfolio clash at Carlsberg-Tetley with that group’s eponymous flagship brand, rather than because of anything inherently wrong with XXXX. Indeed its argument goes further, suggesting the brand’s credentials are so strong that they still hold a strong resonance in the market, despite the steep fall in sales and under-investment.
Interbrew UK believes that it was the rapid decline in marketing investment over recent years which caused the “freefall” decline in both take home and on-trade sales. “There is no doubt the brand has been neglected in recent years and this has been a major factor in its recent performance,” says King. “But the brand’s underlying strengths have allowed it to survive a decade of neglect. The brand has shown real resilience; it shouldn’t have the consumer affinity and awareness it does have.
“We believe that Castlemaine XXXX has the branded credentials to become a major player in the standard lager sector once again,” King adds. “We are re-launching the brand with a programme that will revitalise its image, boost awareness and update its consumer appeal in the months ahead.”
Apart from a repackaging, this programme will include an advertising campaign due to be launched in the spring by ad agency Mother, which will play on the theme of XXXX as the authentic Australian lager. The group is also aiming to update the lager’s image, which it says was too “ladish” in the past, with a more contemporary feel.
Interbrew is now looking for some rapid increases in the distribution levels of Castlemaine, which have begun well thanks to the company’s track record in lager, King explains. However, with Heineken poised to re-enter the UK with Amstel at the standard end and a revamped Heineken to challenge Stella, and Coors keen to build on its new purchase, Carling, 2003 looks set to be quite a battle for market share.
