Bass must keep creative spirit

Economies of scale and distribution, certainly; Bass getting back on top, probably; marketing – negligible by comparison. Such is the conventional view of the forces driving Bass’ takeover of Carlsberg-Tetley. Like all saloon-bar wisdom, it misses the less obvious. The short- and medium-term cost savings in such a deal are undeniable but, in the longer run, brand marketing will do much to determine its success.

Of course, there is no obvious brand synergy of the sort that characterised the Scottish & Newcastle “merger” with Courage. S&N could immediately capitalise on complementary but under-invested national lager and beer brands like Fosters and John Smith’s. Bass will find no such handy windfall; quite the contrary in fact.

But the underlying marketing logic of the deal is compelling all the same. Like all brewers, Bass has found itself on the defensive; and in areas where it was particularly strong – distribution and retail. Long-term decline of the on-trade was compounded by the effects of the Beer Orders, which bit into its powerful and compliant estate. The waxing power of the supermarkets and lure of cheap duty-free booze has further weakened Bass’ traditional strengths. To put matters into perspective, pubs tied to brewers accounted for 43 per cent of UK consumption in 1989; today the figure is 27 per cent.

The net result has been an increasing emphasis upon the marketing of premium brands. This is really Whitbread country, but Bass has made surprisingly successful inroads. Surprisingly, because Bass was best known for its standard brands, like Carling Black Label, and hardly at all for the quality of its new product development.

Yet the transformation has been remarkable, despite Bass’ outwardly conservative demeanour. Under marketing director Seamus McBride, brought in from Colgate Palmolive in early 1994, Bass has witnessed a veritable cascade of npd projects. Most of these were failures. This scarcely matters, because the successes include the hybrid beer Caffrey’s and the alcopop Hooper’s Hooch, which outsold all expectations.

And there has been uncharacteristic innovation in other areas too. Bass’ home delivery scheme, judged in one light, was rather naive and had to be withdrawn when wholesale customers complained. But it showed Bass was prepared to probe – and was looking for ways around the retailer.

There is a danger this energy may be dissipated in the wake of a successful C-T takeover. True, there are conspicuous brand opportunities, like Tetley’s bitter. But, once the OFT has pontificated, a formidable task awaits the marketing department at the merged company – the winnowing of superfluous brands. Bass’ task will be to ensure this does not get in the way of creative marketing, which is vital to the brewer’s continuing success.

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