Stella Artois and the Virtue of Consistency

Synopsis

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1. The business issue The business issue for Stella Artois is that of relevance – or more accurately irrelevance – which has raised its head at two key points in the brand’s history. The first instance of irrelevance came at the brand’s launch in 1976: it was too strong, exorbitantly expensive, and discordant with British beer tastes. The difficulties in driving sales of this product were huge. Radically, Stella Artois marketing took these disadvantages of strength and price and turned them to its advantage, using them to create the Reassuringly Expensive Stella Artois brand we know today. This worked well, until the sweeping changes in British society at the end of the 1980s threatened to make a brand based on expense and exclusivity irrelevant once again. In the early 90s Stella Artois was losing market share and volume. Its rapid growth during the previous decade had demonstrated the potential value of the emergent premium lager market. The number of new entrants hungry for a slice of the pie meant that Stella Artois’s position as market leader was jeopardised. The brand seemed to be stuck in the greed-is-good era of the 80s, while times had changed and consumers had moved on. Reassuringly Expensive now seemed entirely inappropriate, and it looked as though a relaunch or repositioning would be necessary in order for the brand to grow further.

2. The solution Had consistency and product focus been rejected, along with the Reassuringly Expensive positioning, Stella Artois’s story might have been very different. The vital strategic breakthrough came in a subtle shift in the message the brand communicated, a shift that took account of the changing times while remaining true to Stella Artois’s heritage of consistent focus on a quality product. The message changed from:

“Stella Artois is expensive because it is good quality”

to:

“Stella Artois is worth paying more for (… so it must be good quality)” This crucial difference meant that, whilst retaining its focus on the product, marketing would no longer talk explicitly about what makes Stella Artois good quality, allowing consumers to work that out for themselves. This revised message was encapsulated in the brand proposition:

“Stella Artois is the lager of supreme quality and worth.”

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This positioning has underpinned every piece of strategic thinking and every marketing brief for Stella Artois since 1990, and has generated remarkable results.

3. The business result Stella Artois was returned to volume growth, within a market in decline over recent years. It has become the most widely-drunk beer brand in Britain, and is today the only beer brand growing penetration. (Source: Alcovision) By volume, Stella Artois is now the largest premium lager brand, and the third largest lager brand, selling over 3,495 million barrels in 2003. (Source: Nielsen) Stella Artois is the largest beer brand by value, with annual sales of £1,400 million to July 2003. (Source: Nielsen) In the on-trade Stella Artois is now the fourth largest lager brand by volume, behind the more widely-distributed standard lagers. In the off-trade, where consumers have a free choice of all brands, it is the largest brand with a volume market share of 15.5%, a clear 5% points ahead of closest competitor Carling, a standard lager. (Source: Nielsen). This success is attributable to the strength of consumers’ sense of affinity with, and desire for, the brand.

• Consumers believe Stella Artois to be a “quality” brand, which is “worth paying more for”. The advertising – which is the most salient in the market – enhances this image of the brand, growing Stella Artois’s lead over competitors on these measures

• These are the right values to promote: more people claim to be involved with the Stella Artois brand than any other beer brand (Source: Hall & Partners)

• This involvement drives sales: consumers with Stella Artois as their favourite or preferred beer (53%) account for the majority of Stella Artois’ volume (93%) (Source: Alcovision)

4. The single most important piece of learning

Consistent focus on the product has been central to Stella Artois’s success. At each key point in its history – 1976 when the brand launched, and 1990 when it looked for a while as though it would have to relaunch – Stella Artois refused to compromise on its positioning. Crucially, it remained true to itself, rather than bending to what consumers and the market seemed to dictate. This is manifested in the prestigious, aloof, expensive Stella Artois brand that dominates the UK beer market today. Marketing consistency based upon an unfashionable devotion to the product has made Stella Artois the UK’s most desired beer - Reassuringly Expensive for beer drinkers and reassuringly profitable for retailers and publicans. 767 words

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Stella Artois and the Virtue of Consistency

A submission to the Marketing Society Awards 2004

Marketing Achievement (K)

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Introduction Stella Artois is a remarkable success story. From unpromising beginnings its off-trade sales alone now make it the 4th largest grocery brand in the country. Add the on-trade and Stella Artois is worth over £1,400 million a year, selling 33 pints a second.1 This paper documents marketing’s role in Stella Artois’s success, beginning in 1976, but focussing on the second decade of the brand’s UK history. There are many reasons for this success. At the forefront is a marketing approach of consistency - across all elements of the marketing mix, and sustained throughout the brand’s lifetime. This is remarkable in a marketing world where change is the only constant. This consistent approach is born out of Stella Artois’s product-focussed positioning. Unchanged for more than 20 years, this positioning centres on a product which itself refuses to be compromised and, in the face of competitor product reformulation in pursuit of consumer approval, remains true to itself. 2 This strategy has proved extraordinarily effective in generating consumer desire for the brand. Refusing to be dictated to by short-term faddish ‘insight’, Stella Artois exploits a truth of human nature more fundamental, more powerful and ultimately more profitable than the focus group-generated ‘consumer insights’ that have gained currency amongst marketers anxious for success. This truth is that human beings always desire more than they have, both materially and personally. Stella Artois’s marketing has consistently made its product the focus of this deep desire.

1 Nielsen 2 A note on the product Stella Artois is a premium strength continental lager, first brewed under license in the UK in 1976. At launch it was stronger than other lagers which sacrificed their original formulation and were uniquely tailored to bitter-bred British tastes at 3.2-4.3% ABV. Today this doesn’t seem problematic. But a decade earlier Heineken had been forced to reformulate their brew for the UK market from 5.0% to 3.4% ABV, and by 1976 tastes still hadn’t changed. Further, Stella Artois’s price was exorbitant versus standard lager – more than twice the price.

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Building a brand – the early years 1976 – 1990 In 1976 Stella Artois was advertised only in quality press, targeting a niche product at a niche, upmarket audience. Focussing squarely on the product, it didn’t attempt to mirror consumers’ lives, but said simply that Stella Artois was expensive because it was produced with the finest ingredients and the longest brewing process. In 1982 Reassuringly Expensive became the brand’s end-line, and the campaign directly challenged consumers to afford the precious brew - perfect for the brash, materialistic spirit of the Thatcherite 80s. Unfaltering repetition of this Reassuringly Expensive mantra, and unswerving focus on the product, transformed Stella Artois from a nice-tasting, expensive pint into the Reassuringly Expensive lager.

Fig.1 Press Advertisement from 1986

Between 1976 and 1989 sales grew rapidly, increasing by over 500% to 500,000 barrels a year. Then growth faltered. Stella Artois had demonstrated how lucrative the premium lager sector was, and new brands were being launched at a frightening rate, peaking in 1990 at three a month.3 The stock market crash of 1988 and Thatcher’s resignation in 1990 finally destroyed the ‘greed is good’ philosophy that had supported the brand’s positioning so well. Stella Artois began to lose share, and volume, dropping 20,000 barrels in a single year.4 Stella Artois marketing faced its biggest challenge to date.

3 Whitbread 4 Whitbread 1989-1990

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1990: time to start again? As growth plateaued in 1990 the marketing objectives were simple, but not straightforward:

• Reassert the strength and distinctiveness of the Stella Artois brand • Return Stella Artois to volume growth • Protect Stella Artois’s position as market leader

It was the consumer who needed to be won over, so a standard marketing solution was tempting. The temptation was to renounce our heritage and follow the lead of other lagers, repositioning in accordance with consumers’ lives and preoccupations. This would mean rejecting the now incongruous and possibly off-putting Reassuringly Expensive positioning, which had worked by challenging rather than courting the consumer. But reinvigoration was vital, and Reassuringly Expensive seemed to stand in its way. Anyway the Reassuringly Expensive positioning was 15 years old. Surely it was high time for a repositioning?

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Not throwing the baby out with the bathwater Had consistency and product focus been rejected, along with the Reassuringly Expensive positioning, Stella Artois’s story might have been very different. A vital strategic breakthrough came in a subtle shift in the message the brand communicated - through each element of its marketing mix - that took account of the changing times while remaining true to Stella Artois’s heritage. The message changed from:

Stella Artois is expensive…because it is good quality

to:

Stella Artois is worth paying more for (…so it must be good quality) This crucial difference meant that marketing would no longer talk explicitly about what makes Stella Artois good quality, allowing consumers to work that out for themselves. This revised message was encapsulated in the brand proposition:

“Stella Artois is a lager of supreme quality and worth” This simple phrase has underpinned every piece of strategic thinking and every marketing brief for Stella Artois since 1990. We will now examine how this sustained focus on the product enabled Stella Artois to be consistent throughout its marketing activities, looking first at the product, then its placement, and finally its promotion.

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Product consistency a) Lager Stella Artois was set apart from other lagers from the outset, refusing to compromise by conforming to consumer tastes and market rates. While other lagers have reformulated, or diversified into light/ ice/ low alcohol varieties, the Stella Artois product has remained consistent. b) Packaging The packaging has, of course, evolved over time. But the mandate on the design brief has not changed: all packaging must be of supreme quality and worth. Rather than courting consumers by modernising, Stella Artois packaging becomes ever more exclusive. Embossing on the can was introduced in 2001, increasing its “quality-expensive” image relative to other cans from 2% to 23%.5 The outer box was re-designed in 2003 along the model of Champagne packaging; largely white, it stands distinct from other lager packs.

Fig.2 Secondary packaging Fig. 3 The embossed can c) Glassware The Stella Artois pint glass was introduced in 2001 to reinforce Stella Artois’s image in the real world by ensuring the lager of supreme quality and worth is served appropriately. It is the 9th most stolen item from pubs; within 12 months of launch, 66% of UK households possessed at least one glass.

Fig.4 The pint glass

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Product consistency The design brief employed the supreme quality and worth mantra mandating a quality glass, worthy of being filled with a lager of supreme quality and worth. Hence the logo is embossed rather than printed to avoid degradation with use; its shape and weight are determined by concern for optimum delivery of the beer itself. Consequently it can’t be stacked, upsetting the trade, but demonstrating Stella Artois’s unswerving prioritisation of its product.

In 2002 a ‘free glass with six bottles’ promotion sold 900k glasses. In 2003, a not insignificant outlay of £10 was required to secure a glass. This time 1.4m glasses were despatched, improving key brand image measures amongst users: “worth paying more for” moved from 72% to 83% post use and “high quality” from 82% to 90%.6 d) Draught barrel After 5 years development the Stella Artois Draught Barrel was launched in 2003, using high specification technology to ensure that the lager is served in optimum condition in the home, consistent with the brand’s supreme quality and worth positioning. The Draught Barrel has sold 4.5 million pints through the off-trade in its first year of launch, at a 37% premium to the average off-trade Stella Artois price point, and brought in new buyers, with over 40% of purchasers new to the beer category.7

Fig.4 The draught barrel

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Placement Stella Artois is the most widely distributed lager in the on-trade. It has grown ahead of competitors and is now in 52% of all pubs, driven by strong growth in draught, as below:8

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Stella Artois Foster's CarlingSource : CGA Qtr 3 September 2003.

Fig. 5 Draught lager distribution December 1996 to August 2003

Behind this distribution growth is the On-Trade Quality Programme, an initiative designed to ensure Stella Artois is always served in a manner commensurate with a lager of supreme quality and worth. The programme has so far been rolled out to 70% of its outlets where trained staff ensure Stella Artois is always served in a clean branded glass, at the right temperature and with the correct head. These outlets command a 10p premium per pint, and see 6% greater ROS than pubs without the Programme.9

8 CGA Qtr 3 September 2003 9 IUK

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Promotion This section discusses three areas of promotion: TV advertising (creative and media), sponsorship, and price promotion in the off-trade. a) Above the line: consistent TV advertising i) Creative Advertising played an important role in reinvigorating the brand in 1990, giving it a revised, coherent and effective identity for new premium lager drinkers, without alienating existing drinkers. The campaign that began then, and continues today, is as radical as it is successful. The differences between Stella Artois commercials and the lager norm are obvious: Stella Artois ads are not famous for beautiful women. Nor do they make use of flash cars and cool bars (although we did once stretch to a cart and a donkey). The dialogue is in French, which limits the scope for gags lads can play back in the pub on a Friday night. It’s a very different kind of lager advertising. Fundamentally, the product is elevated above the drinker, placed on a pedestal and revered beyond all logic – to the point where the drinker will do anything to get his hands on it. Amidst the foreign jabbering and the subtle narrative, the supreme quality and worth product is the one certainty of the drama. The consumer feels proud and flattered to understand the narrative despite the film’s opacity, and its perceived appeal to someone more sophisticated. The campaign began in 1991 with Jacques. A French flower-grower first exchanges a bunch of carnations for a sandwich, and then his entire day’s haul for a Stella Artois. The transaction and worth-equation are straightforward.

Fig. 6 Still from Jacques (1990) Fig. 7 Still from Devil’s Island (2003)

12 years on, the consumer knows what role Stella Artois will play in each ad (the object of uncontrollable desire), enabling grander, subtler tales to be spun around this constant. In the most recent execution Devil’s Island, an inmate on a prison ship fortuitously comes into possession of a bottle of Stella Artois, and attacks a guard so he will be put into solitary confinement to drink his beer in peace. The worth-equation here is less concrete – it occurs over an indefinite time scale, nothing of monetary value changes hands. Absurdly, light and liberty are sacrificed for a bottle of beer. Yet the

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Promotion consumer delights in the advertising’s increasingly fanciful assertions of worth, each successive execution proving more effective than the last at building desire for Stella Artois. The benefits of a consistent, long-running campaign are evidenced in steady spontaneous awareness growth. The contrast with Budweiser, which has aired eight different campaigns over the same period, is marked.10

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BudweiserCarlingCarlsbergFostersGrolschKronenbourg 1664Stella/Stella ArtoisLinear (Budweiser)Linear (Stella/Stella Artois)

Fig. 8 Spontaneous advertising awareness 1998-2003

This correlates with sustained salience levels over the last four years, in the face competitor fluctuation in response to new campaigns.11

Average Top Box Ad Salience over time- "It really stands out as different from other advertising"

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Fig. 9 Ad Salience October 1999 to October 2003

10 Hall & Partners 11 Hall & Partners

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Promotion The advertising is also the most involving in the category, with Stella Artois scoring 67% (vs. Carling 65%, Budweiser 55%, Fosters 53%, Grolsch 48%, Heineken 46% and K1664 39%).12 Qualitative research attributes this to the peculiar nature of the creative:

“The advertising is admirably different from the frenetic weirdness of the competition. It has great stand-out against its rivals, which all tend to plough the same furrow”13

The hierarchy of spontaneous impressions of the latest four executions also demonstrates the consistency of the message and consumer take-out14:

Last orders Returning Hero Good Doctor Devil's Island People would do anything for it/Irresistible

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Fig. 10 Consumer take-out of recent Stella Artois TV commercials

Consumers are conscious that the overall Quality message (intrinsically linked with “desire”, as shown above) is constant:

“None of the other beers could do quality so convincingly because Stella has been saying it for as long as I can remember and anyway it’s true.” 15

Econometric modelling in 2000 proved that every £1 spent on advertising generates a direct uplift of 30,000 barrels or £12.60 of additional revenue for Interbrew UK, and a further £3 through increased distribution.16

12 Hall & Partners 13 Graham Hall, qualitative advertising evaluation 1993 14 Hall & Partners 15 Male respondent, Justin Kent Research 1999 16 MMD

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ii) Media Consistency Demonstrating strategic consistency once again, Stella Artois advertising has only ever appeared in media deemed appropriate for a lager of supreme quality and worth. The 80s Reassuringly Expensive print campaign was almost exclusively confined to the pages of the Sunday Times Magazine. This was the only suitable magazine for colour double page spreads, and the Stella Artois brand would settle for nothing less than this most extravagant of sizes. When volume targets necessitated the move to TV to reach a wider audience, a similar demand for quality prevailed: Stella Artois commercials are a minimum of 60” long, with extended 70”, 90” or 100” versions running in the most up-market programming. This discipline has enabled the creative to work effectively on a modest spend, relative to the competition17:

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BudweiserStella ArtoisCarlingFostersGrolschK1664

Fig .11 Lager market TVR spend MAT to Jan 2003

Quantity of ratings is sacrificed to quality of impact: media buying centres on film - a more premium viewing environment, synergistic with a filmic campaign. Only certain films are deemed worthy; often mass-audience blockbusters are ignored in favour of late night avant-garde showings on Channel 4 - a smaller audience, but a more appropriate medium. Despite its huge reach, Stella Artois ads never appear in football. A large proportion of the media budget is spent in cinema, the environment where the filmic quality of the commercials works best.

17 MMS

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Promotion b) Sponsorship consistency Unlike the many and varied partnerships built, then dismissed, by other brands, in 25 years Stella Artois has run only two sponsorships: i) Film Stella Artois has sponsored films on Channel 4 since 1997. This makes it one of the longest-running TV sponsorships and is, in a “beer‘n’sport” world, unique. Consistent with the Stella Artois brand, the cultish films shown on Channel 4 are somewhat highbrow, niche and consequently deeply aspirational. The sponsorship idents are similar in tone and feel to the advertising, thus benefiting from and adding to the brand affinity it generates.

Fig .12 Stills from Channel 4 sponsorship idents

Consumers appreciate and respect these 5 and 10 second films, which reinforce and elevate their relationship with the brand:

“A lot of thought has gone into it, I just know it’s Stella” “It’s all about quality” “They’ve got their own way of sponsoring that’s unique.”18

18 SPA qualitative research July 2003

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Promotion

ii) Tennis The same relationship exists with the Stella Artois Tennis Championships. This event, held in the run up to Wimbledon at the Queen’s Club every year since 1978, epitomises the ‘supreme quality and worth’ of tennis. An invitation-only event, it regularly draws the top male players in the world, a capacity crowd with disproportionate numbers of film stars, and is covered extensively on BBC1 and BBC2. Association with such an exclusive event helps Stella Artois maintain the paradox of the brand – perceived exclusivity despite virtual ubiquity.

Fig .13 The Stella Artois Grass Court Championships logo

Fig .14 Coverage of the Stella Artois Championships from BBCi19

19 http://news.bbc.co.uk/sport1/hi/tennis/2992384.stm

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Promotion c) Below the line: promotion in the off-trade Appropriately for a Reassuringly Expensive brand, Stella Artois runs relatively few, and only value-added, promotions itself. This is evidenced by the glasses promotion, which was advertised in a very different way to most retail promotions – barely mentioning the deal in 2002, and then not mentioning it at all in 2003 so as to retain exclusivity: Fig .15 Glass advertising 2002 Fig. 16 Glass Advertising 2003 However, as a sure-fire footfall driver, retailers love to promote Stella Artois. It is the most discounted grocery brand:20

Stella Artois Budweiser K1664 Carling Fosters 1999 107 99 79 57 65 2000 200 121 91 121 79 2001 195 102 105 105 79 Total 502 322 275 283 223

Fig .17 Numbers of promotions in multiples 1999-2001

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Promotion Frequency of promotion doesn’t impair effectiveness:

• Modelling shows Stella Artois promotions generate a 4-weekly penetration gain of 2.8%, 1.6% points greater than gains generated by the second most successful brand, Carling.21

The reverence in which Stella Artois is held (high brand preference and high position in brand repertoire) means that when it is on promotion, its promotions are seen as better value than its competitors:

• Only when Carling is promoted on BOGOF – generally recognised as the best deal by consumers – will they prefer it over Stella Artois, on which they might only save 25%, or get 3 for 222

Consistent communication of the supreme quality and worth positioning across all other elements of the marketing mix protects Stella Artois’s brand image from potential damage by these promotions. Overturning received marketing wisdom, econometric modelling has proven that promoting Stella Artois in the off-trade does not only generate short-term sales uplifts. Without eroding brand image it increases long-term penetration: it allows people who desire Stella Artois but cannot afford it at the normal price point to buy, thus making an abstract brand relationship more concrete.23

21 Scantrack 22 Research International 23 Hall & Partners

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Sales success There is not space here to give a full account of Stella Artois’s success. To begin to do it justice requires it to be put into list form:

• Within a market where beer penetration has declined from 31% in June 2001 to 28.9% in June 2003, Stella Artois is the only lager brand to have grown penetration, to become the most widely-drunk brand in the UK24

Y/E June 2001 Y/E June 2003Stella Artois 18.00% 21.80%Fosters 18.30% 16.70%Carling 16.40% 15.40%Budweiser 9.60% 7.90%K1664 5.00% 5.40%

Fig .18 Lager penetration changes 2001-2003 • Between 1996 and 2003, Stella Artois has seen volume growth of 217%,

compared to premium lager category growth of 66% over the same period25

• In 1976, Stella Artois sold 9,814 barrels. It is now the third biggest lager brand, and the largest premium lager brand, selling 3,495 million barrels in 200326

• This gives Stella Artois an 8.9% share of the total beer market, over three times

more than its 1996 share of 2.2% (compared to a share increase of less than double for 1st and 2nd place brands, Carling and Fosters)27

• This is not just a case of a smaller brand growing more quickly than larger brands.

Over the same period Stella Artois has almost doubled its share of the premium lager market from 20% in 1996 to 38% in 2003, stealing share from its nearest premium competitor Budweiser, whose share dropped from 12% in 1996 to 7% in 200328

• In the on trade, Stella Artois volume has increased to move it from fifth to fourth

largest lager brand between 1996 and 2003, and increasing its lead over premium lagers29

• In the off-trade Stella Artois is now the largest lager brand with a volume share

of 15.5%, a clear 5 % points ahead of the closest competitor Carling30 24 Alcovision 25 Nielsen 26 Nielsen 27 Nielsen 28 Nielsen 29 Nielsen 30 Nielsen

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Sales Success

• Stella Artois is a top four grocery brand, behind Coca-Cola, Walkers and Muller, having moved up from 34th in six years31

• In value terms, Stella Artois’s growth has been still more remarkable, growing

from £849m in 1998 to £1,400 million in July 200332

• This value growth has been driven by the off-trade, where Stella Artois is the largest beer brand with 17.2% value share of the total market, and growing33

31 Nielsen 32 Nielsen 33 Nielsen

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The fruits of consistency and desire These business results could not have been achieved without consistent communication of the supreme quality and worth positioning across Stella Artois’s marketing mix. This has built a brand that consumers believe is “better quality” and “worth paying more for” (WPMF) than other lager brands. Belief that Stella Artois is WPMF drives behavioural commitment to the brand. A claimed commitment score of 66% compares to 39% for those who don’t believe it is WPMF.34 The 53% of drinkers who claim that Stella Artois is their favourite or preferred beer account for 98% of Stella Artois’s volume.35

But people don’t just ‘buy’ the brand. They feel affinity with it – more so than with competitor lager brands. As measured on a brand involvement scale, Stella Artois scores 63% involvement (vs. Budweiser & Carling 58%, Fosters 57%, Carlsberg 51%, Grolsch 44% and 1664 43%). Where consumers have the additional touch-point of the advertising, or in other words, where they’re exposed to another strand of Stella Artois’s marketing consistency, this brand involvement increases to 80%.36 The 2004 FHM Bloke Awards testify to this: Stella Artois has just been voted “Favourite Beer” by 2 million readers! This desire for the brand doesn’t just work directly on consumers to drive sales. It produces an additional increment via its positive effect on distribution: consumers desire it so publicans want it – and have named it their Desert Island Beer for the last three years37:

“Stella’s great. They all ask for it by name and they stick to it. If I took it out now I’d have a complete scrum on my hands!”38

“It just sells itself really. That’s the power of the brand.”39

34 Hall & Partners 35 Alcovision 36 Hall & Partners 37 The Publican annual survey 38 Arthur Smith, Landlord, Anchor and Hope, Kent 39 Zoe Beavis, Interbrew sales rep

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Summary Marketing consistency based upon an unfashionable devotion to the product has made Stella Artois the UK’s most desired beer - Reassuringly Expensive for beer drinkers and reassuringly profitable for retailers and publicans. Consistent devotion to the product as the lager of supreme quality and worth has ensured that all innovation has been focussed, and therefore successful: from the media strategy, through the groundbreaking sponsorship of the Queen’s Club Tennis, to the introduction of the branded pint glass and Draught Barrel. Because it is consistent, Stella Artois’s marketing is efficient, and has to devote less resource to media and promotions than more changeable competitors. This consistent product focus presents a challenge to consumers, who have to work hard to relate to the brand, and therefore invest more in it. It becomes valuable to them, and therefore valuable to the trade, evidenced not least by the brand’s enduring success as a promotional tool. For one beer brand at least, consistency is the greatest virtue. 3492 words

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