Lager. Did we jump or were we pushed?

Posted on December 13, 2009 by
Lager-market-share-1960s

Lager's market share rose rapidly as brewers spent money on production capacity and advertising (Source: The Economist)

At the end of November 1969, the British Labour government generously allowed a price increase of  ‘not more than 2d a pint’ to the brewing industry. There was little rejoicing among brewers; first because they had asked for double and second because the 2d increase was split two to one in favour of the retailers.

The Prices and Incomes Board was the main instrument of the government’s prices and incomes policy to rein-in inflation, but it was also one of the factors that helped spur the growth of lager.

British brewers at the end of the sixties were growing and consolidating. By 1969 the cost of brewing and retailing a pint had risen by over 15%, according to The Economist. At the same, time while beer volumes had risen by round 1% to 2% a year, it wasn’t enough to cover the capital needs for an industry that was rationalising production, refurbishing pubs and expanding overseas.

Brewers were concentrating on cutting costs by brewing centrally, distributing nationally and backing this with massive advertising campaigns. The number of breweries in the UK had fallen from 6,200 independently owned and managed breweries to 200. But the consolidation of ownership meant that these breweries were managed by only 100 different companies.

Keg beer and lager fitted the centralisation plans of the breweries perfectly. They were both pasteurised and easier to brew than draught beer and were ideal for the new outlets, such as clubs, that didn’t have the dedicated facilities to handle hand-pulled beers. They were also ideal for canning, which was slowly replacing bottled beer.

Lager was big business

Many reasons  have been given for the spectacular growth of lager during the seventies and eighties: a change in taste for post-industrial office workers who couldn’t ‘handle’ draught beers, and a series of hot summers are the most popular. They include elements of truth, but underlying them all was that lager was good business for the brewers.

Why? Because they earned more money on lager (and keg) than on draught. During 1969, lager sales grew by 30%. Although they only took 5% of the entire market, a quick look at the Scottish market, where lager had its British stronghold, showed a 20% market share.

Prices per pint were higher than bitter by around 6d, and more was sold outside of the pubs and so the brewers were free to charge what they wanted.  Add to this a slightly lower excise duty and all the benefits of modern rationalised production and it isn’t hard to see why in the few years up to the end of the decade £20 million was spent on building facilities for lager alone and £3 million was spent on advertising keg, lager and canned beers.

At the same time, the number of draught beers was reduced, with The Economist commenting darkly that by the mid-70s it would be impossible to buy draught beer.

With the resources thrown at lager and keg by breweries in search of better profits (between 1966 and 1969 profits grew by only 17% compared with 40% for the rest of industry), is it any wonder that the UK became a nation of lager drinkers?

Posted in Advertising, Beer, Brewing history, Marketing, UK lager | 1 Comment

Lager frustrations solved – for now

Posted on November 13, 2009 by
Uk lager market shares, 1959-1969

UK lager market shares, 1959-1969

Writing about beer from a business perspective is both fascinating and frustrating. Its pretty easy to spot that the fascinating part is reading about how beer and beer markets (and marketing) developed. The frustrating part is finding the necessary proof to back up all the fascinating parts. It wouldn’t be wrong to compare it to sitting in a pub and hearing a mildly drunken mixture of facts and opinion – only to wake up the next day and wonder which bit is which and who said it.

Which is why I’m particularly pleased this morning to present a primary source for the claim that lager made up around 1% of the UK beer market at the end of the 1950s and shows the relation to the other types of beers. The figure is widely quoted, but it has been tricky to find a named, authoritative source. And here it is.

 

Posted in Lager | 2 Comments

Don’t drink and ride

Posted on October 22, 2009 by

At the moment I’m digging through classic lager ads on the basis of a theory about how advertising of lager has gradually progressed from product quality and nutritional claims to more lifestyle-based, social affirmation. It was all going very nicely and then Lamot happened. A bloke in armour riding on a tiger panther. What on earth was all that about. I’d rather be Hemeling…

Posted in Advertising, Beer, Brands, Lager | Tagged

How Heineken reached the parts other lagers couldn’t reach

Posted on October 19, 2009 by

Some of the best lager advertising ever was the product of one of the UK’s best copywriters – who without an idea in his head fled the country with one word and the threat of a firing if he didn’t come back with a campaign.

The lager was Heineken, the copywriter was Terry Lovelock.  Lovelock was one of the leading copywriters at the CDP Agency and was given the challenging task of creating a TV campaign to sell Dutch  lager to bitter-drinking Britons. His brief, normally pages and pages of background on the market, consumers, competitors and product positioning, consisted of just one word – Refreshment.

At the time, the early 70s, lager had grown rapidly from the early 60s to reach around 10% of the total beer market. But it wasn’t what you might call mass market. It was still a bit special – fashionable, exclusive. In the US the slogan was ” if you run out of champagne, order Heineken”. Hardly refreshment.

Lovelock and his art director Vernon Howe stared at his word for eight weeks without the shred of a reasonable idea between them. The rest of the office began to pop by just to see how it was going. But it wasn’t. In desperation, Lovelock decided to try new surroundings and grabbed the agency car and driver and headed for  Marrakesh. On his way to Heathrow Airport the voice of Frank Lowe, the equally legendary head of the agency came over the intercom and told Lovelock to come back with a campaign or don’t come back at all.

Lovelock was now desperate. He walked around Morocco with pen and paper in hand searching for the idea. Lovelock said that, “At the back of my mind, there was a thought that if booze causes some strange metamorphoses, it must be possible to explain its effects ion the body in a fun way”.  One evening Terry went to be around midnight, notepad nearby. At 3am he woke from a dreamless sleep and sat upright. He grabbed the notepad and wrote two lines. ‘Heineken refreshes the parts other beers cannot reach’ and Heineken is now refreshing all parts’. This is exactly what happened. He blamed it on a mixture of desperation and mental incubation. The following morning he wrote two scripts, one including a Charleston dance competition where the knees weren’t working due to lack of refreshment.

Source: Inside CDP

He came back with several scripts including the first to be filmed  - policemen being refreshed after a hard day on their beat that became a UK advertising classic. And not only in TV ads, in print ads as well, for nearly thirty years.

The ad, like many of the others, featured the voice over of Dane Victor Borge. A Dane advertising a Dutch lager? Why not Carlsberg? Well, that’s another story…

Posted in Advertising, Brands, Heineken, Imported lager, Lager | Tagged | 2 Comments

Classic 80s lager ad – Holsten Pils

Posted on October 12, 2009 by

1979 commercial for Holsten Pils Lager

In the late 19th Century Holsten Brauerei first began trading in the UK when they purchased a brewery in Wandsworth, London. Holsten Pils was first imported into the UK in 1952 thus creating the premium packaged lager market. In 1979 the first of many award winning TV ad campaigns was launched starring Donald Pleasence. In the mid-1980s Holsten became the UK’s number one selling premium packaged lager. (source: www.wikipedia.org)

Thanks to http://www.retrotvads.com/

Posted in Advertising, Beer, Imported lager | 1 Comment

Rice in lager gets an image overhaul in the LA Times

Posted on October 3, 2009 by
Uhhm, Ill have a nice cold glass of rat poison, please.

Uhhm, I'll have a nice cold glass of rat poison, please.

For years ‘industrial’ lager has ben ridiculed for adding rice and corn as adjuncts to provide extra sugar for fermenting. The beer purists locked into Reinheitsgebot have accused brewers of cheapening the brew, watering it down for commercial gain, and generally being evil. All-malt is the best seems to be the general opinion.

But this week there was a story in the LA Times that describes how some craft brewers are experimenting with rice and corn ales. The horror! Well, not really, the Times’ story is nicely balanced piece describing how rice can be used for giving flavour, rather than taking it away.

“Yes, rice gives beer a light body,” says Brian Dunn, owner and brewer at Great Divide Brewing Co. in Denver. In 2007, the brewery released Samurai, an unfiltered rice and barley ale, to retail outlets. “But it’s also crisp and refreshing, and has a little fruity character that really comes through.”

Also quoted is Maureen Ogle, author of Ambitious Brew, a book exploring the history of brewing in the US, who says  “Craft brewers treat rice almost as if it’s rat poison.”

According to Ogle, the anti-rice sentiment is traceable to the early craft brewing revival in the 1980s. “It was all about, ‘We’re only using four ingredients, we’re not like those industrial brewers making watered-down, cheap beer by using adjuncts like rice.’

“The mythology is that these giant beer makers began adding rice and corn to their beer after World War II to water it down, but that’s simply not true,” she adds.

The American brewing industry was built in the late 19th century by first-generation German American immigrants such as Adolphus Busch, Adolph Coors and Frederick Miller. Although these men, craft brewers themselves, initially re-created the full-bodied beers of their homeland, many Americans had not developed a taste for the malt-heavy style.

“They needed a domestic ingredient that would make the beers more effervescent, bubbly and lighter,” Ogle says. “Rice and corn did that — it was a desired flavor, not inexpensive filler.”

Posted in Beer, Brewing, ingredients, Lager loathing, US lager

The debt lager owes to Guinness

Posted on September 30, 2009 by
Guinness led the consortium to launch Harp lager

Guinness led the consortium to launch Harp lager

Lager and ‘container draught’  (later developing the slightly catchier name of ‘keg’) were the two great opportunities for British brewers in the early 1960s. They had been the fastest growing elements of the British beer industry, but it was the creation of draught lager that finally gave lager the mass-market breakthrough it had attempted for nearly 100 years.

At the start of the decade, lager and draught each accounted for no more than 3% of the total beer market. Lager had been brewed on a regular basis in the UK since at least 1879 and draught had been developed by Watney Mann before the Second World War and developed after by Flowers’ under the ‘Keg’ brand name.

In 1950, slightly fewer than 100,000 barrels of lager were drunk, most of them imported. By 1959 and the introduction of Skol by Ind Coope, the total had risen to 500,000. By 1960, 550,000. During this time total beer consumption was stagnant and the brewers knew that if they couldn’t  shift total consumption, they would have to try and shift consumption patterns.

It was Harp, brewed by a consortium of four brewers headed by Guinness, that began the major shift in consumption away from cask-conditioned ales. Guinness began development of its new lager in the late 1950s with the purchase of The Great Northern Brewery in Dundalk. The German brewer, Dr. Herman Muendar, was not overly impressed by the brewery and described it as “like an alchemists’ kitchen”

Harp lager was first brewed in June 1960 and quickly saw success first in Ireland and then a year later in North West England and then national. By 1962 it was the second biggest brand – neck and neck with Carlsberg – but still behind Skol. It was brewed in the UK by Scottish & Newcastle, Mitchell & Butler and Courage.

Initially Harp lager was bottled and did reasonably well, but it was the launch of Harp on draught in 1965 that saw sales really take off. According to brewing historian Martyn Cornell Harp wasn’t the first keg lager, but it was the first one to solve the problem of overfrothing, helping lager elbow its way into the UK.

From the 2% share of the beer market in the early sixties, lager grew to just under 10% by 1971, topping 50% by 1989. Ironically, this was also the year that Harp dropped out of the Top 10 beer brands in the UK. Just 10 years later, seven of the top ten beers in the UK were lagers.

Posted in Beer, Brands, Brewing history, Harp, Lager, UK lager