A Test of strength

Superstrength lagers make up nearly an eighth of the UK’s take-home lager trade, yet the brewers choose not to advertise them. These high-alcohol products achieve sales of 225m a year, using mainly direct mail and on-pack promotions.

In importance, they rival the alcopops sector, at its height, and also reflect some of its moral ambiguity.

The lagers, with a strength of up to nine per cent volume, are controversial – when off-licence owners in Winchester in southern England banned them from their shelves, local police said the move led to a drop in anti-social behaviour associated with open-air drinking.

They have been dubbed the “parkbench market” due to their popularity with serious drinkers, and maybe this is why brewers prefer not to make a noise about them. In short, superstrength is the lager that dare not speak its name.

The take-home superstrength market declined by four per cent last year, hit by retailers’ own brands and the general decline in lager sales. Attempts to bring brand values to the market have met with limited success.

So Whitbread has its work cut out for the relaunch of its superstrength brand Tungsten (MW February 12). Tungsten was first launched in 1995, one of the new products developed for Whitbread by Bartle Bogle Hegarty, the advertising agency for its Boddington’s brand. Other developments included the Tooheys lager brand.

An ad campaign for Tungsten was run on bus sides for the original launch, though there will be no advertising support for the relaunch, and it will use only below-the-line promotion.

Tungsten has struggled to create a strong brand identity in a market which has “become unfash- ionable due to its association with drunks in the street”, according to one insider. Like other products in the superstrength sector, Carlsberg Special Brew, Tennent’s Super and Kestrel Super, the marketers of Tungsten are walking a tight-rope.

After all, how do you promote a product when its unique selling point – that one swig can blow your head off – must be played down?

The drinks industry’s own body which promotes “responsible” marketing of alcohol, the Portman Group, warns that the brewers could be in danger of flouting its code in promoting the superstrengths’ usp.

“These brands need to be promoted for values other than just strength, or else they may contravene the code,” says Andrew Chevis, head of public affairs at the Portman Group. “The marketing of any alcoholic sector must not encourage excessive drinking,” he adds.

The launch of Tungsten was an attempt to bypass the low-rent image of the superstrengths by providing attractive packaging and a premium image. The product is made with the classy sounding “husk-free barley” which it is claimed may lead to a less serious hangover, an attempt to woo drinkers fearful of the after effects of a superstrength binge.

AC Nielsen figures provided by Whitbread show volumes sales for superstrengths to December 1997 were 415,000 barrels, a four per cent decline on the previous year’s figure of 433,850 barrels. This, in turn, was down three per cent from 1995, at 445,570 barrels.

However, Whitbread says the volume of Tungsten has grown. Sales to December 1997 were 7,740 barrels, up from the previous year’s 6,730.

But there’s no getting away from superstrengths’ tarnished brand image, says Damian Horner, business development director at agency Mustoe Merriman Herring Levy. “That’s one of the problems with the sector – there’s no positive image associated with these lagers, you link them with street drinkers.”

Other attempts to introduce new products in this sector include Carlsberg-Tetley’s test-launch of Steel Beer, a 6.7 per cent lager which was scrapped last year. It aimed to bridge the gap between the premium lagers and the superstrengths.

“Logically there’s a continuum of alcoholic strengths from Heineken through to Stella Artois then Steel to superstrength lager,” says Horner, who has worked on Lwenbräu. “But in reality they are different sectors with different palettes, different drinkers and different attitudes to the brands.”

Horner says that the taste factor is important and underestimated by the brewers: consumers have to be committed to drinking superstrengths. He predicts that relatively new brands with attractive packaging such as Tungsten are the only way the market can compete.

But giving a premium image without heavy advertising support is difficult. Bass has tried to give its Tennent’s Super brand a premium © image by launching an Ice version, but this has been scrapped as well.

Is it that these relatively new kids on the block don’t have the heritage and brand loyalty to compete with the big boys – Tennent’s Super and Carlsberg Special Brew?

Niall O’Keeffe, marketing controller for lagers at Carlsberg-Tetley, thinks this is the case with Tungsten. “It’s is one of those markets where it’s difficult to create a new brand successfully. New pretenders often find it hard to fight.”

He believes his own brand, Carlsberg Special Brew (nine per cent proof), benefits from a “huge amount of heritage and investment” and umbrella branding from the Carlsberg name.

But despite Carlsberg Special Brew’s share of the superstrength market – O’Keeffe claims it holds 30 per cent of the sector by volume – the brand is not heavily advertised. He prefers to use on-pack promotions to compile a database for direct mailshots. “We have three per cent of lager drinkers – advertising is expensive,” he adds.

The brand, which has a 96 per cent share of the on-trade superstrength market, was launched in the UK in 1974. “We positioned Special Brew as the original strong lager and the way the market has grown it’s impossible to deny that some is consumed on the streets,” O’Keeffe adds. “But if people want to get drunk and lay around park benches, they can do it more cost effectively than through buying Special Brew.”

He says alcopops and cider are cheaper alternatives for the heavy-duty drinker. “Special Brew doesn’t compete with alcopops – it competes with wines and spirits,” O’Keeffe claims. “The attack on the superstrength market has come from low-margin high-alcohol products affecting the volume equation. Retailers are entering the market with their own-label lines.”

Sainsbury’s is one such retailer, with its Sainsbury’s Superstrength Lager. The chain also stocks Tennent’s Super, Skol Super and Carlsberg Special Brew.

A spokeswoman for the company says: “With all our products we try to offer a choice. Then it’s up to customers to make their own choice about their drinking habits.”

As well as image, superstrengths have to contend with sheer practicalities. If tighter drink-driving laws come into force, one pint of superstrength in the pub will mean a ride home on the bus or the taxi.

“Superstrength will be restricted to non-drivers or people drinking at home,” says Horner. “It boils down to a conscious choice to drink superstrength; people won’t buy it by default.”

There is yet another image problem for the sector. Cash and carry outlets sell about 70 per cent of all superstrength lagers, mainly to independent retailers. And there is huge tax evasion across alcoholic drinks in the wholesale sector, particularly on superstrength lager.

Paperwork for export is being filled out, but the goods do not always find their way to Europe. Instead they are sold off the back of lorries to small independent retail outlets. Furthermore, there is beer which is exported and then finds its way back to the UK to be illicitly sold again.

The superstrengths are particularly badly hit, as they attract a higher tax rate than standard or premium lagers – duties rise by 0.5p per pint for each extra percentage point of alcoholic strength. This makes them even more attractive to tax dodgers intent on selling them illegally.

The Brewers & Licensed Retailers Association is calling on the Government to introduce a phased reduction in beer duty in the next Budget to help tackle the problem.

Figures in BLRA’s report, called Turning The Tide – Brewing and Pub Industry Submission to HM Treasury, dated January 1998, illustrate the scale of the phantom beer market.

In 1994 the report says that 322,000 hectolitres (100 litres) of beer were exported to France, but the French reported receiving only 148,000 hectolitres.

“There are Custom & Excise officers looking at this area, but it is a growing problem and they aren’t going to solve it,” says a spokeswoman from the BLRA. “Our beer market would have grown by 2.5 per cent over the past two years were it not for this.”

But Customs & Excise says it would cost the Treasury 5.5bn in revenue if excise duties were set at French levels – in effect it would have to raise income tax by 5p in the 1 to pay for it. With the present Government that move seems unlikely. “I would think that the division in beer is confined to superstrength and premium beers,” says Ray Steel, team leader of Impex in the South-east region, a Customs & Excise body set up to tackle loss of excise duty.

Customs & Excise will continue to mount investigations like a recent operation which unearthed goods worth more than 1m in unpaid duty. These included hundreds of pallets of beer and containers of spirits.

A number of men were arrested and are suspected of having run a “diversion fraud” racket – buying beer, spirits and wine from Bonded warehouses, claiming that the goods would be exported to the Continent. In fact customs officers believe they diverted the goods back onto the home market, evading the payment of duty to the Treasury.

Brewers would not comment on the illicit trade other than to say it is the responsibility of the wholesaler and the relevant law enforcement agencies. But the problem is forcing brewers of superstrengths to look at exclusive tie-ups with off-licence chains, cutting out some of the wholesalers which are giving their brands a bad name.

The relaunch of Tungsten could be hit if Whitbread restricts its distribution through the cash and carry sector. When asked if the relaunched Tungsten would bypass this sector, a Whitbread spokeswoman says: “That is still under review.”

So the superstrengths are fighting a double assault on their image, one from their association with street drinking, another through their illegal sale in the independent sector.

The decline in the superstrengths’ volume sales comes against a generally declining lager market. But premium brands such as Stella Artois are building sales with strong advertising and marketing budgets.

Attempts to give premium values to superstrength beers appear to have faltered. Brands could be left to wither away and the whole sector handed on a plate to the retailers’ own-label products. The brewers would avoid the moral spotlight which is burning into them following the alcopops furore.

But the hard-pressed brewers would lose out on a sizeable market, just when they need to sell all the beer they can.

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