The spectacular success this summer of ice beer products has confirmed in the most dramatic terms something that Canadian beer marketers already knew from previous experiences in the genuine draft and dry beer categories.
Consumers are thirsting for products with true difference that also deliver on quality.
But even Molson Breweries and Labatt Breweries of Canada, the brewers behind the products, are a little taken aback by how well ice beers have done.
From a standing start this spring to the end of the summer, ice beers have captured more than 10% of the national market.
And it occurred during a time of unprecedented uncertainty in the domestic beer business.
New marketing fronts are opening up all across the industry, from the pending introduction of u.s. beers into mainstream sales, to other issues unknown to recent generations of Canadian brewers such as variable pricing and the growing challenge from microbreweries and the suppliers of home brewing equipment.
It is understandable under these circumstances that the normally hot competitive spirits of Molson and Labatt executives get fired up another degree when it comes to the ice beer category.
In the latest development, Labatt is seeking an injunction to stop Molson from saying its ice products are ‘ice-brewed,’ claiming ‘ice-brewed’ is a term coined by Labatt in reference to its exclusive brewing process.
Molson counters that Labatt is simply trying to distract consumer attention from the success of its ice products with this court action and that the term ‘ice-brewed’ is generic.
Labatt has been saying from the outset that it has the only real ice beer, based on a new ice-brewing process. Thus the advertising platform ‘If it’s not ice-brewed it’s not ice beer.’
Molson says it, too, has a unique ice beer product and that the process used to brew it is also new and a natural roll-out from its cold-filtered draft brewing.
Labatt chose to market ice as a stand-alone product called Labatt Ice Beer, while Molson launched its ice initially under the Canadian label and later as an extension of Black Label (Black Ice) and, thirdly, as part of a recently introduced Carling family.
Both breweries claim to have a slight edge in ice beer share. Molson would not discuss market share figures, but the brewery says when Labatt announced recently that it had sold its five millionth case of Labatt Ice, Molson ice beer products were outselling Labatt by 20%.
Labatt says that at the end of July, Labatt Ice had achieved a 5.7% share of the national market. Some observers call it a dead heat.
As lawyers fight out this latest legal skirmish, marketers on both sides are focussing their attention on the advertising messages that will likely determine the next shift in ice beer market share.
At the centre of this story is Alexander Godunov, the tough-talking former Russian ballet dancer whose aggressive manner as the Labatt Ice Beer spokesman in many way typifies the larger marketing struggle.
Molson thinks the Godunov performance goes too far, that it is irritating consumers and while he may have been effective during the brand’s launch phase, for the long term Molson believes that Alexander just is not good enough.
Gene Lewis, Molson vice-president of business development, predicts Labatt will get rid of Godunov.
‘I look at the Labatt ice campaign as the Andrew Dice Clay of beer advertising,’ Lewis says.
‘It may be funny to some, but he [Godunov] just goes too far,’ he says.
‘The greater achievement is to be entertaining and get your message across, rather than just being in your face, because in-your-face makes you wonder how long it will last.’
Molson predicts that if Labatt abandons Godunov, the brewery will likely turn to its technology story about ice beer as its strategic platform.
So Molson has launched a new commercial pool that makes light of beer-making technology. The commercials rely heavily on state-of-the-art post-production and computer production technology to create a spoofed 1930s newsreel feel.
In one spot, we see molecules floating in space before cutting to an awkward-looking scientist who discusses beer-making with mock seriousness.
Another commercial picks up the theme while showing ’50s-era partyers in the background while playing on the scientific terms ‘inertia’ and ‘bodies in motion.’
Lewis says the advertising is intended to maintain the fun positioning of the Canadian brand personality.
‘Maybe we have taken things too seriously,’ Lewis says.
‘Ice beer as some kind of war is taking it too far,’ he says. ‘Beer is still a social thing. It’s all about having fun with your friends. This (the new spots) helps increase the separation between us and Labatt’s.’
Labatt executives are not impressed with the new Molson tv campaign.
‘It won’t work and it will be off the air in a few months,’ predicts Glen Cavanagh, Labatt’s director of business development and the person who spearheaded the launch of Labatt Ice Beer.
Cavanagh says he does not understand what the advertising is trying to say and he does not believe consumers will even notice it.
When asked whether Labatt plans to continue using Godunov as its Ice Beer spokesman, Cavanagh says no decision has been made.
He concedes that some people have found his performance irritating, but Cavanagh points out: ‘I don’t believe he is being irritating to our target audience.’
Even so, Cavanagh also points out that those who focus on Godunov himself – and whether people like him or not – are missing the point and the real story behind the success of Ice Beer.
In fact, he says Godunov and his consistent, high-impact message has translated directly into brand personality.
‘The personality is one of confidence, huge credibility and masculinity,’ Cavanagh says.
‘He is independent, intelligent and there’s also a kind of mystery about him,’ he says. ‘He is also very persuasive. It’s certainly been enough to give us dominance in our segment.’
Cavanagh says that Labatt tried a new creative execution that incorporated film footage of short vignettes that played with the ice motif.
These sequences, which could be described as more conventional to the beer genre, were built around a brief appearance by Godunov.
Consumers reacted quickly and emphatically to the 60-second commercial.
‘They said it was interesting and sociable, but it wasn’t what they liked about Labatt Ice,’ Cavanagh says. ‘They said it was like everybody else.
‘We discovered that Labatt Ice had a very strong and distinctive brand personality and imagery that was solidly entrenched,’ he says.
Cavanagh says Labatt decided to shelve the entire campaign because of the harm it might have done to that image.
As to which of the two big breweries are winning in the overall battle for market share, Labatt says the facts speak for themselves.
Recent industry figures show that Labatt has picked up about 1.5% in national corporate share over the past year to a position of 43% of the domestic beer market, while Molson’s corporate share has shrunk during the same period by about the same percentage to just under 50%.
