Retrospective: Labatt celebrates 150 years: New brands fuel growth: Labatt has come a long way from its original three brands ­ Ale, Stout and Porter

Retrospective: Labatt celebrates 150 years: New brands fuel growth: Labatt has come a long way from its original three brands ­ Ale, Stout and Porter

 

Attempting to condense 150 years of a company’s marketing and advertising history down to a handful of newspaper pages is a bit like trying to cram the Northwest Territories into Prince Edward Island ­ try as you might, you’re just not going to get it all in.

And when the company is Labatt Breweries of Canada, one of the country’s most prolific advertisers, the task becomes even more monumental.

But here at Strategy, we like nothing if not a hearty challenge.

Though much detail has necessarily been left out of this historical look back at Labatt, the essential story that emerges is one of a company that owes its success to sound strategic thinking, sensitivity to consumer demands and a willingness to take risks and aggressively exploit marketing opportunities as they present themselves.

Cheers.

 

When John Labatt Brewery began making and selling beer 150 years ago, it had only three brands to offer its clientele: Ale, Stout and Porter.

Today the company offers more than 40 national and regional brands.

A turning point in the brewery’s history took place in 1863 when John Labatt Jr., son of the company’s founder, returned from a brewing apprenticeship in Wheeling, West Virginia with a recipe for India Pale Ale, a milder-tasting brew that would appeal to a wider range of the population.

ipa ended up being Labatt’s top-selling brand for nearly a century after it was introduced. In fact, it wasn’t until the introduction of Labatt’s 50th Golden Anniversary Ale (50) in 1950 and Labatt’s Pilsener (Blue) in 1951, that ipa began to lose steam as Labatt’s most popular libation.

Throughout the 1950s and 1960s, the position of top-selling beer in Canada jockeyed between Labatt’s 50 and Blue. (Although it had been nick-named ‘Blue’ early on by Winnipeg Blue Bombers football fans, Pilsener’s name wasn’t officially changed until 1968.)

Thanks to Canada’s growing preference for lighter-tasting lagers over ales, however, Blue eventually unseated 50 as the country’s favorite beer around 1979. Labatt 50 continued to remain a strong seller in Quebec, where beer drinkers had a lasting disposition for ale.

Although Labatt did introduce a handful of new beers after Blue’s launch in 1951 (Velvet Cream Stout, 1958; Gold Keg, 1963; Bock, 1965; SKOL International, 1966; Cool Spring, 1972; and Special Lite in 1978), it didn’t enjoy any huge new brand successes until 1980 when it brought Budweiser into Canada.

Brewed in Canada under licence from Anheuser-Busch of St. Louis, Mo., Budweiser quickly became one of the best selling beers in the country, and demonstrated to Labatt that one of the best ways to build market share was to expand its label roster.

Thus, following Budweiser’s introduction were major launches in 1983 for John Labatt Classic and Blue Light, Twist Shandy in 1985 and .5 in 1986.

In 1992, Labatt enjoyed its most successful new product launch ever with the introduction of Genuine Draft, a cold-filtered beer that grabbed a six per cent share of the Ontario market within 12 weeks of hitting Brewer’s Retail shelves.

The following year, Labatt delighted in an even more successful brand initiation with Labatt Ice, a patented formula brew, which gained a 10% national share by the end of its first summer.

The Ice launch was backed by a massive advertising campaign created by Scali McCabe Sloves, featuring well-known Russian ballet dancer and actor Alexander Godunov, who stated in the tv spots for the new product: ‘If it’s not ice-brewed, it’s not ice beer.’

According to former agency personnel, the campaign execution was significantly altered at the last minute to combat a perceived competitive threat from Molson, which was set to hit the market with its own version of ice beer at the same time.

The resulting publicity surrounding the Ice beer wars helped drive Labatt’s overall market share to an all-time high of 44% in 1993.

Since then, Labatt has introduced Maximum Ice, a higher-alcohol content version of the main Ice brand; Wildcat, a family of value-priced beers; John Labatt Classic Wheat, a new entry in the premium beer category; Copper, a darker ale that was selected by consumers in 1995′s monumental ‘X – Y’ marketing campaign, but which failed to generate much post-campaign interest; and Select, a lower calorie beer. It has also expanded distribution of Kokanee, a regional brand from b.c. into the all-important Ontario market.

According to Bruce Elliot, Labatt’s vice-president of marketing and sales from 1992 to 1995 and currently president of Labatt’s Atlantic operations, the slate of new brand launches during his tenure was the result of the brewery’s new commitment to market research.

‘We ultimately spent a lot more time trying to understand the consumer and slicing and dicing the marketplace to come up with more personalities for our brands,’ he says.

Discovering that ‘consumers were hungry for new products,’ Labatt felt the time was right to develop a ‘portfolio of brands,’ Elliot says. ‘It’s how we regained momentum in the marketplace.’

The situation in today’s market is somewhat different, says Elliot, suggesting that consumers are less interested in trying new beer products, and that they may, in fact, be returning to traditional brands such as Blue or many of the regional brands available across Canada.

Thanks to strong brand equity and unique positioning, he says, brands such as Blue Star in Newfoundland, Keith’s India Pale Ale, Schooner, and Oland’s Export in Nova Scotia, and Columbia Brewing Company-produced Kootenay Mountain Ales in b.c. ­ all ultimately owned by Labatt (see historical overview, p. 19) ­ are seeing an upsurge in sales.

‘A lot of people are evolving back to strong core brands,’ he says. ‘It’s the retro thing.’