Cott President Dave Nichol confidently predicts his Dave Nichol Personal Selection brand premium draft beer will launch as successfully as the President’s Choice brand did in 1992.
The pc brand quickly nabbed close to 3% of the Ontario beer market, and held on to that for about a year, before its sales levelled off at about 1% (or one million cases.)
The Dave Nichol beer is being brewed by Lakeport Brewing in Hamilton, the company that owns the original pc recipe, and which was brewing the product until early October when Labatt Breweries of Canada assumed the right to the brand (but not the original recipe.)
Labatt is now brewing a different beer under the pc brand, making for an interesting marketing battle: the pc recipe and the Dave Nichol name will be aligned against the pc brand and Labatt’s vast marketing arsenal.
The new Dave Nichol line includes a draft, a strong draft, a light draft and an ice draft, which has no corresponding pc product.
The product comes in cases of 12 only.
Nichol, who does not drink beer, said last week at a Toronto press conference he is confident consumers will be attracted to his name, and the taste to which they became accustomed in the former pc beer.
‘The thing that differentiates it is that I selected it,’ Nichol says. ‘It seemed to work before. Hopefully, it will work again.’
Nichol believes his high profile and previous affiliation with Loblaw’s President’s Choice line will influence the consumer.
‘There are a number of people out there who, because of the experience of President’s Choice, trust the products I’ve developed,’ he says.
Last week, Lakeport distributed about 150,000 cases of the new Personal Selection beer throughout Ontario.
William Sharpe, president and chief executive officer of Lakeport, also anticipates brisk sales.
In preparation, the brewery has been fitted with higher speed machinery, and is in the process of doubling its production capacity.
The $600,000 advertising program for the Nichol product launch was created in-house and costs roughly the same as the pc launch in December 1992.
The simple tv and radio spots, and newspaper ads will feature a 30-pound trimmer Nichol.
Posters at Brewers Retail outlets will also highlight Nichol’s involvement.
Packaging for the Dave Nichol brand is very like that of the pc brand, with similar colors and labelling.
The red pc logo has been replaced by a similarly stylized scrawl of Nichol’s inititials.
Thirty-five brands have entered the price beer category since the rogue pc brand first undercut the established breweries with a price of $12.50 for 12 beer, about $2 less than most.
The result was a significant loss of revenues for the industry as a whole.
‘I think a lot of the big national breweries brought this on themselves by bringing out so many brands and flavors over the last two or three years,’ Sharpe says.
‘It has kind of programmed the consumer to change – and we’re right there [to collect them,]’ he says.
The price segment accounts for 15% of the total beer market.
The price of the four members of the line will also be $12.50 for a case of 12.
But, if category competiton brings on a price war, Sharpe hinted the brewery will not necessarily keep its price frozen at that level.
‘We’ll stay competitive,’ he says. ‘We want to make a profit, but we want to be competitive at all times.’
Sharpe also says Lakeport is applying to sell the brand in Ontario liquor stores and expects to be given approval in about a month.
Over at Labatt, where the pc product it once cursed has been under full production since the end of October, there is confidence the brand will remain strong.
‘We have a heritage as a brewer, and all of our products are of unparalleled quality, with the acceptance of consumers worldwide,’ says Terry Zuk, director of public affairs at Labatt Breweries.
‘We believe our product will satisfy current pc customers,’ Zuk says.
He says Labatt has already tested its pc product, and is confident it will do well.
‘We will market pc as we do other products,’ Zuk says. ‘We will be aggressive, going after market share just like everybody else. ‘
On Tuesday of last week, the day the Dave Nichol brand was launched, Labatt ran a 2/3-page ad in The Toronto Star emphasizing pc’s premium ingredients and affordable prices ($11.80 to $13.00).
Bozell Palmer Bonner handles the pc ad account.
Zuk says Labatt will try to expand the product into other provinces in the future, but would not comment on when, or under what circumstances.
The Labatt-Loblaw partnership was established in September.
According to Paul Smith, Labatt’s director of communications, Loblaw was looking for a brewery with a heritage, technical expertise, and a national salesforce to help the brand grow beyond its current positioning in the Ontario market.
Smith says growth potential is an important element for both Labatt and Loblaw, but adds ‘at this point in time, we’re focussed on the Ontario market.’
At the launch of his beer last week, Nichol mentioned he is looking at spring water, Snapple-type fruit juices, and fruit cocktail as possible Cott products.
