Has arrogance led to last orders for Stella?

It’s time for Inbev to cry into its pint of Stella Artois again. Just when it was hoping that the newly launched diluted version – with its strength reduced from 5.2% to 5% – will help restake its claim to being the ultimate premium lager, students across the country decide to no longer savour the reassuringly expensive drink.

P17_SonooAfter being delisted by the venerable National Union of Students, the most popular student pint is no longer available at most student union bars because the “NUS won’t buy it”.

For a brand that has been in intensive care for over five years, and has been stuck with the moniker “wife beater” to such an extent that its new avatar, the weaker 4% Stella has already got the nickname “child-beater”, Stella Artois has become a great case study on how to destroy a brand, not helped, of course, by its furious rants every time Stella manages to fall from grace. Remember its furious response when Young’s Pub Company decided to delist the brand? “Young’s will regret its decision in the long run because no other beer brand is investing so much money to make sure that Stella Artois remains the number one premium choice for consumers.”

But was it greed, arrogance or delusion on the part of the company which led it to forget its brand management prowess and concentrate purely on getting the distribution right so that it could sit back and rake in the profits? For too long, before the Belgium’s Interbrew merger with the Brazilian brewer AmBev in 2004, the brand failed to change its beautifully crafted, “reassuringly expensive” strategy, while its reputation continued to get bludgeoned on the back of heavy discounting in the off-trade. Also, it seems that at the heart of Stella’s problem is that because it continued to be the UK’s most popular lager for almost two decades, it was arrogant enough to somehow fail to take the time to look around at what the competition was up to. So rival Carlsberg came up trumps, when it dethroned Stella earlier this year as the most popular lager in the off-trade for the first time in 18 years.

The $11.5bn (£6.5bn) deal between the Belgians and the Brazilians to create Inbev meant that it became even less focused on trying to integrate a business, which now had Interbrew founding families and AmBev’s controlling shareholders calling the shots, operating the new company under a 20-year management deal.

But, under the newly installed UK president Stuart MacFarlane, the business has been fighting back. He launched the biggest advertising burst for the beer brand since 2004, was responsible for the 4% launch and the diluted 5% one as well. But will these measures, including the Stella-branded Zeppelin airship over London, be enough to stem the spiralling downfall?Perhaps for a brand that has lost its sheen because of the “Burberry effect” – having been dragged through the lager-and-blood-stained gutters – the ultimate price to pay will be to cut back on its distribution. But it has waited too long in the fear that it will have to pay the price of profit – a hangover, some say, from AmBev’s strict financial discipline practice.

At the rate the brand is being thrown out of pubs, it could inevitably spell last orders for Stella Artois.


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