Home' Brewers Guardian Digital Magazine : November 2014 Contents About those icebergs
Things aren’t jolly, collectively, in the shrinking
European on-trade. SABMiller estimates that
in 2008 the continent’s pubs and restaurants
accounted for 36% of market value. By 2013 this
figure had dropped to 29%. Further decline is
forecast, to 26%, by 2018.
This diminishment engenders two difficulties.
Firstly, there are better margins to be garnered in
the on-trade; secondly, if you’re launching a beer it
is, traditionally, where you want to introduce your
new born excitements to the world.
SABMiller Europe has a range of initiatives to
bolster the on-trade. Some of the work pairs beer
with food – for example, a beer and tapas offer
in the Canary Islands that encourages drinkers
to move from bar to bar during the evening. And
there’s something similar on offer in Italy, matching
beer with pizza.
The most interesting initiative, one that will have
resonance for cask ale enthusiasts in Britain,
is unfurling in the Czech Republic – Plzensky
Prazdroj is giving bars something unique that
can’t be duplicated in the off-trade. Market leader
Gambrinus is now available only in unpasteurised
form, offering those out for a night something
fresher tasting, something that can’t be found in
a supermarket, something that would be worth
paying a premium.
There’s more in a similar vein – the use of ‘tank
beer’, with large tanks installed at pubs and bars
and fresh, unpasteurised beer delivered from
the brewery gates direct to said pub or bar. It’s
something that’s being developed in Britain at the
moment, with a handful of select outlets in London
receiving tanker deliveries of Pilsner Urquell from
the Czech Republic.
Clark notes that SABMiller is on the lookout for
entrepreneurs intent on providing their customers
with memorable experiences. “Identifying those sorts
of entrepreneurs in the on-premise and partnering
with them I think is a real skill that is incredibly
important for the business as we go forward.”
And then there’s the on-trade, where key accounts
– supermarkets – are becoming increasingly
important. Some markets, like the Netherlands,
already have eighty-plus per cent of sales
accounted for by key accounts; the consolidation
process eastern Europe lags behind western
countries but it is accelerating across the board.
Clark notes that there is no “one size fits all” when
it comes to working with key accounts – they have
slightly different strategies added to which there
are slightly different relationships with SABMiller’s
operating companies. But underlying all this is the
seemingly irresistible urge amongst multiples to use
beer brands to drive footfall and basket sizes.
“I think one of the key things is to work with
customers about how they can grow value from
beer through expanding the category into other
specialities and the range of offerings rather than
just piling high and selling cheap,” said Clark. “And
I think that sort of evolution ... we are seeing that
across different customers. But everybody moves at
their own pace and it’s like two steps forwards, one
step back as well sometimes.”
Picking the priorities
By now in the interview we’ve gone around the
houses – flavour development/NPD, creating new
occasions, beer and women, premiumisation and
brand extensions, creating on- and off-trade value.
Clark is asked to rank all these factors: what matters
most, in essence.
She offers a fulsome reply. “I keep coming back to
it, you have got to make sure your core lager is well
presented and well executed because it is just such
a big part of the portfolio. If you don’t keep your core
mainstream fresh and interesting – that has to be
the number one thing.
“But as [former chairman of SABMiller Beverages
South Africa] Norman Adami always says, it’s not
just an ‘and/or’, it’s an ‘and/and.’ So we’ve got to do
that and I think we’ve got to look at expanding into
the new categories and social occasions.
“And the other thing you’ve got to do whether it’s
the core or it’s the innovations is the relentless
focus on execution. It doesn’t matter how clever
you are at marketing or branding unless it’s well
presented on shelf and available in the pack size
that the consumer wants when they want it – then
everything else is lost.”
The underlying question, returning to the original
analyst scepticism, is simply: will this work? Is
SABMiller sufficiently fleet of foot to return Europe
to growth? Throughout the discussion Clark is asked
variations on this question; the answer is to ask
again in three to five years, matching the medium-
term financial targets.
So it’s too soon to say; securing European fortunes
are a work in progress. Of course there will be
quarterly report cards in the form of financial results
but the underlying efforts to alter the top line
won’t be so evident. This is a story that needs to be
followed up – in the meantime, its best wishes to
Sue Clark & Co. There’s lots going on that suggests
that success may be within their grasp.
Visit the SABMiller website
Click here to watch
I think one of the key things is to work
with customers about how they can grow
value from beer through expanding the
category into other specialities and the
range of offerings rather than just piling
high and selling cheap
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