Lager brand Stella Artois is in intensive care as owner Inbev attempts to revive UK sales and restore its premium image. A new brand doctor is arriving from Germany to take charge of the Belgian patient (MW last week).
Inbev has appointed German marketing chief Andreas Hilger to fill the same position in the UK, taking over from Devin Kelly who is departing for his native US. Hilger takes up the post next month and his priority will be to halt the steep decline in sales suffered by Inbev’s number-one UK profit-maker: Stella Artois.
He faces a massive and complex task. The whole beer market is stalling as people switch to alternative drinks. But some say Stella is declining 10% each year, though it is still the UK’s number one “premium” lager.
Stella is a Jekyll and Hyde brand. Its upmarket, sophisticated brand image is at odds with its public reputation as a cheap, high-strength beer swilled in vast quantities by young men. The advertising may be chic and classy, suggesting elegant soirees and art house cinema, but the brand has become linked to alcohol-fuelled violence and has been given the sobriquet “wife beater”. One judge recently said that “Stella” was a word he heard all too often in his courtroom when dealing with drunken young men.
Meanwhile, the “Reassuringly Expensive” advertising slogan has been undermined by discount promotions of the brand through supermarkets and off-licences.
Inbev has unveiled a number of steps to shift people’s perceptions of Stella. It is trying to make Stella unattractive to certain undesirable consumers and focus on quality and heritage. The first move was to relaunch the brand as part of the Artois family, featuring the 4% ABV Peetermans Artois along with the bottled premium Artois Bock, a 6.2% version. It dropped the Reassuringly Expensive ad slogan in favour of “pass on something good” in a campaign launched last year. While Stella’s ads have been produced by Lowe for nearly 20 years, Inbev is working with Robin Wight, chairman of WCRS, on ideas for the brand.
Another move has been the introduction of Artois-branded, stemmed chalice glasses in pubs. The reasoning is that heavy-drinking young men will tend not to order lager served in such “feminine” glasses, preferring the traditional pint glass.
A spokesman for Inbev says talk of Stella’s decline has been greatly exaggerated and adds: “Our focus is on building on the successes we had in 2007 while giving Andreas Hilger, our new marketing director, the support and time to get under the skin of the brand and improve his understanding of a very tough UK beer market.”
Some believe the current strategy will restore the brand’s premium image. Adrian Goldthorpe, business strategy director at Futurebrand, which has worked with Inbev, says: “It has been such a phenomenally successful brand for so long as the only premium lager of note, and it is significantly bigger than its nearest competitors. It has looked at evolving the brand with more heritage and origin. It needs to retain its premium status, but it is mass premium as opposed to niche premium.”
He adds that the big issue is off-trade promotions. “Retailers refuse to stock the product at full price and when they do, they put a competitor alongside offering a discount.”
However, some believe that Inbev has been the architect of Stella’s downfall by distributing it too heavily and thus allowing its premium values to become eroded. One rival says: “Stella’s advertising is nice but in every other way it positions itself as a downmarket session lager to be drunk in volume. A few lovely ads have failed to address the fact that people don’t want to be seen sloshing down gallons of Stella: they’ve moved on to things like Inbev’s other brand Beck’s Vier (a 4% ABV lager).”
He says Stella marketers have sacrificed the premium position in favour of high-volume sales, but now these are in decline. “I don’t think they have managed it brilliantly; they have been greedy and swilled back too many pints of money.”
Meanwhile, another observer says it is the job of Inbev marketers to ensure retailers do not indulge in discounting of the brand. The whole point of being brand leader is that it gives you power to dictate terms to retailers. “No one is interested in shooting the goose that lays the golden egg. I suspect the brand isn’t entirely without complicity in the process of selling at a discount,” he says.
He thinks Stella has been run from a 15-year point of view and has made huge profits for its brand owners during that time. He says: “It has been a fantastic success, but was it worth blowing up the brand for that incredible success? It should be run from a 30- to 50-year point of view.”
When it was introduced in the UK in the early 1970s, Stella grew slowly. Its real success came in the aspirational 1980s as more pubs in the Whitbread estate began stocking it and people warmed to its premium positioning. But introducing a 5.2% lager into a culture where people were used to knocking back four or five pints of much weaker beer, say 3.4%, appeared to contribute to drunkenness. Stella confused the term “premium” with being high strength. The new breed of “premium” lagers were blamed for creating an army of “lager louts”.
One source claims Heineken knew the potential dangers of introducing its high-strength version into the UK’s pint-swilling culture, so stuck with its weaker version through the 1980s and 1990s. It eventually axed the weak 3.4% version in 2003 and launched its international 5% beer.
Stella is not alone in suffering from a brand personality disorder. Brand schizophrenia is seen among some of the world’s most famous marques from BMW to Burberry and Hackett to Fred Perry. They have taken their niche position to the mass market and some have suffered.
Brand owners talk about their marques being “hijacked” by undesirable consumers, such as “chavs” – working class youth – who took to wearing Burberry caps and Hackett polo shirts, denting the premium images of these brands.
But this is to deny the brands’ own complicity in the process. It stems from a contradictory desire to be both upmarket and premium with prices to match but also wanting sales volumes that rival the cheapest mass-market products. This is a profitable strategy in the short term but invariably destroys brand values. It is easy to make a mess of mass premiumisation.
As Stella seeks to return to its premium roots, it probably needs to sell lower volumes. One source believes Inbev could switch resources behind Beck’s Vier and leave Stella on the back burner, wait for the negative perceptions about the brand to die away then step up the marketing again. But for Inbev, which depends on Stella for a huge proportion of its UK profits, this could be a painful process.