Losing its cool

Caffrey’s Irish Ale was launched five years ago as “Cool, calm Caffrey’s”, but next week it will be repositioned as the complete opposite, with a new advertising campaign carrying the strapline “A Storm Brewing”.

“Storm brewing” could be oddly prophetic if Bass gets this wrong. Caffrey’s is Bass’ most successful new product launch in years. To reposition it is a huge gamble with what is one of the brewer’s best brand properties.

The 8m TV and radio blitz, developed by new ad agency Roose & Partners, is designed to propel Caffrey’s out of the hybrid ale category it created and into the premium lager market, where it will compete against brands such as Budweiser, Kronenbourg 1664, Beck’s and Stella Artois.

As part of the move, Caffrey’s is to jettison all of its ersatz Irish links which gave it such a send off when it first launched. And as the change in straplines suggests, the brand’s personality is shifting from a reflective to a high energy proposition.

For Bass Brewers, Caffrey’s owner, the reason behind the about-face is simple. It is a drive to find new drinkers in the fastest growing segment of the beer market, as Caffrey’s existing sales begin to stagnate.

But there are serious doubts among observers about whether the repositioning will work. Some believe it is an experiment motivated less by what Caffrey’s is capable of achieving and more by problems within Bass’ broader beer portfolio – specifically the lack of a dynamic premium lager.

“It is almost an admission that there is something wrong with Bass’ portfolio,” says Stuart Forshaw, drinks analyst with Charterhouse Securities. “It is a pretty good sign that Caffrey’s decline is more serious than first imagined. It is also an admission that Carling Premier is not doing quite as well as thought.”

Caffrey’s was the first hybrid ale on the market when it was launched in 1994. A cross between bitter and stout, it was marketed as a creamy, “contemporary” Irish Ale that would appeal to lager, ale and stout drinkers. The brand enjoyed almost instant success, prompting the launch of a series of copycat competitors from all of the UK’s major brewers.

Caffrey’s annual sales are now estimated at about 220m. But it is widely believed the brand’s growth has flattened, with some reports suggesting it may be declining by up to ten per cent. Bass remains cryptic about Caffrey’s exact figures, although it is clear the company is making less money from the brand. In the off-trade, it was recently forced to lower Caffrey’s four-pack price, from 5.49 to 4.99, following pressure from retailers and competition.

Mark Keeley, trading controller at Spar’s Central Office, comments: “To be honest, unless Bass did something with Caffrey’s, I’m not sure what would have happened to it. It was being traded on price.”

The decision by Bass to target Caffrey’s at the premium lager market makes economic sense. In 1998, premium ales accounted for an estimated nine per cent of total beer volumes, while premium lagers made up about 23 per cent. Since 1989, the premium lager sector has grown by seven per cent, while the premium ale sector has climbed just one per cent.

However, the question is whether Caffrey’s is an appropriate brand for the broader premium beer market. Bass is convinced it is. After extensive research, the company believes that about 80 per cent of existing Caffrey’s drinkers have a repertoire of premium lager brands they select from. Blind taste tests with 200 premium beer drinkers have also found that Caffrey’s gets a higher overall opinion rating than Stella Artois. Tests have also shown people do not categorise the brand as either an ale or a lager, but simply Caffrey’s.

Mark Hunter, Bass’ marketing director, argues Caffrey’s is drunk in two situations – quiet moments, such as a weekend lunch, and “high energy” occasions such as a Friday night. Previous advertising such as the “Strong Words, Softly Spoken” campaign developed by Caffrey’s launch agency WCRS, focused too much on the low-energy occasions. The new advertising is designed to address this. It uses the beer’s stormy appearance when poured as a way of presenting it as a fashionable, energising brand.

Entry into the premium market also requires the ditching of the Irish Ale tag, which has associations with Sunday afternoon lounge drinking. Hunter says: ” The danger is that Caffrey’s could become a brand leader in a one-brand Irish Ale category. Lagers don’t specify that they are lagers. Why should ales? It is limiting. Being reflective and Irish is not a benefit.”

That seems to have been the view taken by owners of other brands, such as Guinness and Murphy’s, who have also begun to move away from their Irish heritage as they seek younger drinkers. For Caffrey’s, dropping its Irishness will also distance the brand from its hybrid ale competition, although there are rumours others may follow its example.

Caffrey’s assault on the premium market does resolve at least one conundrum for the brand. With 4.8 per cent alcohol by volume, Caffrey’s is far stronger than any session ale, yet it has been drunk as if it were one by many consumers. The new move will at least put it in the company of brands with a similar alcoholic strength.

But there are several factors heavily stacked against Caffrey’s success as a premium beer. This market is dominated by light, continental lagers with strong brand heritage. Caffrey’s is an ale with a thoroughly dubious heritage and, from now on, a muted origin.

One City analyst says: “I think it’s the wrong move. It is the wrong product basically. Caffrey’s is trying to play the lager wannabe.”

Keeley also has reservations: “There is a point of difference with Caffrey’s. It is an alternative to ale, lager and cider. I think there are some premium lager drinkers who already buy Caffrey’s because it’s cold. We will support the initiative. But I wouldn’t hang my hat on premium lager drinkers. I’m not sure Bass will steal percentage points using that approach.”

The fear among market observers is that Bass is trying to use Caffrey’s to make up for the deficiencies in its existing portfolio of premium beers. The company handles Grolsch lager through a joint venture with the brand’s Dutch parent company. But Grolsch had its heyday in the Eighties.

Bass launched Carling Premier as another premium alternative in 1996 and then a premium packaged lager, Carling Rock, last year. The jury is still out on the success of these products. Some fear they simply confuse existing Carling drinkers.

The new move is either an act of desperation or a shrewd way for Bass to cover all bases in the premium market. Carling Premier provides standard lager drinkers with a route upmarket. Grolsch provides European heritage, while Caffrey’s provides an alternative to premium lager that no one else is offering.

Whatever the motivation, there is no denying the repositioning of Caffrey’s is a risky experiment. To some extent, Bass is trying to turn Caffrey’s into a beer for all people. In doing so it risks reminding consumers how little the brand actually stands for. But then, no one expected Caffrey’s to be a hit the first time round, when it created a new sector. If it is successful this time, it will be the first ale to compete head on with premium lagers.

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