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Labatt Blue Essay

2677 words - 11 pages

Labatt Blue
Canadian Beer Market
As of the end of 2002, Labatt Breweries controlled 43.3% of the Canadian beer market, making it the number two brewer in the country behind Molson, which has a market share of 45 percent. Microbreweries and imported premium beers account for the remaining market share. Major brands tend to focus on 9 to 24-year-old males, and as a result may be missing opportunities by not addressing different demographics and the product benefits of beer. However, targeting 19 to 24-yearolds does encourage early brand adoption. According to Robe Guenette, a former beer executive at Molson, “Brand choices in beer are made early in life. If you get a younger drinker early, ...view middle of the document...

While that campaign was in progress Molson Canadian launched its “I am Canadian” campaign. The launch commercial featured an average guy named Joe bellowing out how Canadians are different from Americans. Called “The Rant” the commercial garnered all kinds of publicity and effectively re-launched the Canadian brand. The battle between Blue and Canadian was in full swing! So intense is the battle that both brands claim leadership. One brand has 13% the other has 12%. It depends on which company is releasing the information. In recent years sales promotions have also played a role in brand success. In package giveaways during the peak summer season were used as a means to build brand loyalty but they proved costly. Many drinkers would switch brands temporarily simply to get the premium, only to revert back to their regular brand when the premium deal ended. This past summer price wars were the name of the game. Smaller brewers such as Lakeport Beverages, Sleeman’s and Mikes Hard Lemonade were offering 24-packs as low as $24.00 (regular price is $32.00). Molson and Labatt responded with their beer-for-a-buck and 24for-24 deals, offering discounts on holiday weekends. Price discounting by smaller competitors and questionable marketing and marketing communications strategies for both Blue and Canadian has resulted in declines in market share in the past year.

Labatt Blue
Labatt Blue was first brewed in 1951. Blue’s clean, refreshing taste is a classic lager that is light in colour with a slight hop aroma, good balance, fruity character and a slightly sweet taste. Labatt Blue sales have been sagging in recent years. As the leading brand within the company, it is not meeting expectations. A press release dated May 29, 2003 summed up the plight of Blue. John Brock, the new CEO of Interbrew SA, the parent company of Labatt Brewing Co. Ltd., said that turning around Labatt Blue is a top priority and they would give the “critically important” brand a major marketing push in the summer of 2003. The new marketing push is designed to stop the market share from sliding further. The multi-faceted marketing effort included media advertising, packaging innovations, promotions, and event sponsorships. To highlight the importance of Blue, consider that it is Labatt’s top-selling beer in Canada, and Canada is the biggest source of revenue for Belgian-based Interbrew. It is important to turn things around. Blue is also sold in the United States and ranks as the number 3 imported beer there. The good news for Interbrew is that many of its other brands in Canada are gaining share, including its global flagship, Stella Artois. Beck’s, another global brand and Canadian brands Alexander Keith’s and Kokanee, are also enjoying sales gains. The bad news is that all four brands combined aren’t as big as Blue. The problem that Blue faces is three-fold. First, there is intense competitive pressure from Molson Canadian. Second, premium import brands and craft beers are...

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