Plotting a French revolution

Another new marketing strategy and a range of variants may not be as important to Kronenbourg’s fortunes as the performance of arch-rival Stella. By Catherine Turner

Scottish & Newcastle (S&N) is repositioning its flagship premium lager Kronenbourg 1664 as a drink to “savour” (MW last week) in an advertising campaign breaking this week.

Kronenbourg, France’s best-selling beer, was introduced to the UK in 1952 to celebrate Queen Elizabeth’s accession to the throne, but the lager brand has long since ceded its crown to Stella Artois.

S&N is hoping yet another shift in strategy will enable Kronenbourg to make headway in a sector dominated by Stella, with some observers claiming the latter’s star is on the wane. But Kronenbourg, the UK’s second-biggest premium selling lager, currently languishes well behind InBev’s Stella, which sells more than all the other UK premium lagers combined.

Mintel’s latest UK lager report, released last year, details the extent of the gap. It reads: “Kronenbourg, despite two new variants, has failed to keep pace with either Stella or Grolsch, both of which have been enjoying heavyweight support⦠Kronenbourg has been the casualty.”

S&N launched the brand’s third extension, white beer Kronenbourg Blanc, to take on speciality beer Hoegaarden in 2004. The range also includes Kronenbourg Premier Cru and the recently launched Cold Premier variants.

According to Mintel Kronenbourg 1664 was the on- and off-trade’s sixth-most valuable lager in 2004, worth &£505m with a 4.6% share of the market. Stella, the third-most valuable lager brand, behind lower-strength brands Carling and Foster’s, was worth &£1.59bn with a 14.6% share.

Stella’s seemingly unassailable lead is, says one advertising executive, the culmination of a “dream strategy”. He adds: “Kronenbourg has always struggled in comparison to Stella because the latter has been a mega-brand for such a long time.”

Stella’s “Reassuringly expensive” positioning and strapline gives the brand the veneer of being the “most premium” of all beers, but without such a premium price, the executive adds. “Yet people never thought Stella was cheap. The brand just grew and grew.”

And he suggests: “If you were to blind-taste test between Stella and Kronenbourg, then Kronenbourg would win because it tastes better.”

He believes that while Stella has showcased “charming” and consistently good advertising, backed by a great media strategy, Kronenbourg has struggled, flitting from one campaign strategy to the next.

Another senior advertising insider, who has worked on Kronenbourg, admits: “It has never really been the tremendous success it probably could have been. One of the few constants with Kronenbourg is that nobody has quite cracked it.”

A third source is particularly scathing of the recent “A great year for beer” TV work. “It is about as uninvolving as any beer campaign that I’ve ever seen,” he states. He questions whether the new campaign, urging drinkers to “Sit. Savour. 1664” will work, believing the strategy is more fitting for stout or bitter. He thinks Kronenbourg should make more of its superior flavour and pursue a “with food” strategy that has worked well for the brand’s variants in other markets.

Yet there are signs that the S&N brand is beginning to fare well in a fading sector, particularly as Stella stumbles. In the UK, the beginnings of a backlash have begun, with “discerning drinkers” shying away. Stella’s enormous popularity is starting to suffer from a “chav” image, according to one drinks marketer.

Meanwhile, in a market where premium lagers are losing share and lustre, “me too” brand Kronenbourg can continue to improve. “There is a bit of a backlash beginning against Stella and Kronenbourg may now be holding up better than before. It was always the poor relation to Stella,” says a drinks industry analyst.

Internal S&N figures also reveal more than a glimmer of hope, with the brand growing 2.5% in the year to date, against this time last year. The improvement has been driven predominantly by an off-trade growth of 8.8%, while the premium lager market is down 1% against last year overall, and 3.3% down for the on-trade sector.

As another industry insider points out: “All premium lagers are struggling. Consumers have moved away from it. The alcoholic drinks market is cyclical and people move on from what the previous generation has been drinking.”

When the market turns full circle, S&N will be hoping that Kronenbourg is no mere pretender to the throne.

Facts and figures

⢠Kronenbourg 1664 has a marketing budget of &£10m

⢠UK consumers drink more than 500,000 pints of Kronenbourg 1664 a day

⢠Kronenbourg sales have risen 2.5% compared to the same period last year, driven by off-trade growth of 8.8%

⢠Kronenbourg 1664 was the sixth-most valuable lager for the on- and off-trade in 2004, worth &£505m with a 4.6% market share (Mintel)

⢠Kronenbourg has an 11.7% market share, with 14.4% of on-trade and 9.7% of off-trade, in the premium lager category (ACNielsen)