STELLA ARTOIS

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STELLA ARTOIS

• Strategy Marketing Management

MBA (Full Time) 1999/2000
Presentation Team J. Currie, D. McCloskey, F.
McCusker, R. McIlrath, K.Y. Tan
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Contents

• Trends in the Beer Markets Internationally
• Competitor Analysis
• Segmentation of Beers
• Interbrew
• Stella Artois
• Future Developments

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Trends in the Beer MarketInternationally
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World beer consumption (Millions of Hectolitres,
1997)
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World beer consumption (Millions of Hectolitres,
1997)
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Top 10 breweries world-wide in x 000HL (1997)

• Brewery Country 000HL
• Anheuser-Bush USA 121.3
• Heineken NLands 78.8
• Millar USA 52.9
• SAB S Africa 43.0
• CC Brahma Brazil 41.3
• Interbrew Belgium 36.8
• Carlsberg Denmark 33.7
• Grupo Modelo Mexico 30.0
• Kirin Japan 29.2
• Fosters Australia 28.7
• Source Impact Databank Sept 1998

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Competitor Analysis
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Competitive EnvironmentRanking of major brewers

• Vol in Mio HL 1992 1998 world
  share company
• Anheuseer-Busch 105 130 10.0
• Heineken 46 79 6.0
• Brahma-Antartica 42 61 4.7
• Miller 62 56 4.3
• Interbrew 15 48 3.7
• SAB (vol.97) 26 42 3.2
• Carlsberg 18 35 2.7
• Danone 26 30 2.3
• Fosters 31 30 2.3
• Kirin (vol.97) 35 29 2.2
• Total world 1148 1306 100

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Competitive EnvironmentRanking of main
international beer brands

• Vol in Mio HLs 1995 1998 RMS /-
• Bud 75.0 83.0 4.25 10.6
• Miller 20.5 19.5 0.23 -04.8
• Heineken 17.0 19.4 0.23 14.1
• Corona 15.0 19.2 0.23 28.0
• Amstel 9.5 9.9 0.11 04.2
• Carlsberg 8.5 9.4 0.11 10.5
• Guinness 8.0 8.8 0.10 10.0
• Kronenbourg 7.5 7.5 0.09
  0.0
• Fosters 6.0 7.0 0.08 16.6
• Stella Artois 4.0 5.8 0.06
  45.0
• Becks 4.5 4.2 0.05 -06.6

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Competitive EnvironmentMain international beer
brands Share home country in total sales

• 1998
• Bud 90.4
• Miller 95.0
• Heineken 19.5
• Corona 75.0
• Amstel 21.9
• Carlsberg 12.9
• Guinness 25.0
• Kronenbourg 74.4
• Fosters 20.2
• Stella Artois 15.8
• Becks 42.2

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Competitive EnvironmentGlobal Trends

• Concentration in the beer category will continue
• The consumer becomes more and more a world
  consumer
• Barriers to worldwide information will drop
• Consumers will demand more choice, variety and
  sophistication
• Lager market will develop towards premium and
  price brands
• International premium brands will dominate the
  sector
• International premium brands will profit from
  international support and brand globalisation

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Segmentation of Beers
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Segmentation of Beer

• Lager Drinker
• Premium Lager
• Thirst-quenching Specialties
• Accessibile Taste Specialities
• Highly developed Taste Specialities

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Segmentation of Beer

• Bigger subdivision within categories
• Rise of new segments on top of base segment
  lagers
• Greater sophistication of the beer market
• Growth of easy to drink/stronger Specialities
  recruiting from Lager/Premium Lager segments

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Interbrew
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Financial Performance1998

• Interbrew is in a strong financial position to
  expand
• 13.5 Operating Profit as of Turnover
• 1.35 Debt/Equity Ratio
• 4.8 Interest Cover

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Financial Performance1998/97

• Total Sales Increased by 2 million HL or 11.1
• Turnover increased by 8 million BEF
• or 7.3
• Cash Flow improved by 1 million BEF
• or 5.5
• Net Profit increased by 2 million BEF
• or 43.7

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Interbrew in the world (1998)

• 38.6 million HL/ 52.9 million HL
• 16.727 employees
• 2nd largest brewery group in Europe
• 4th largest brewer in the world
• Figures, not including minority shareholdings
• Figures, including proportionally minority
  shareholdings (98 volumes) and latest
  acquisitions in Russia

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Interbrews operationsBrewing operations
(07/1999) in

• Belgium 4
• Netherlands 3
• France 1
• Hungary 1
• Croatia 1
• Romania 2
• Bulgaria 4
• Ukraine 1

• Montenegro 1
• China 2
• USA 1
• Canada 9
• Russia 8
• Dominican
• Republic 1
• South Korea 2

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The international brand portfolio
ORIGIN

• Stella Artois Premium lager beer segment Belgium
• Hoegaarden White beer segment Belgium
• Leffe Abbey beer segment Belgium
• Belle-Vue Lambic beer segment Belgium
• Labatt Blue North American lager segment Canada
• Labatt Ice Premium Ice beer segment Canada
• Rolling Rock Premium American lager segment
  U.S.A.
• Complementary range

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Strategic objectives

• Build a leadership position for its brands in the
  major market segments and develop Stella Artois
  as its international flagship brand.
• Continue investing in both mature and emerging
  markets through a combination of organic and
  external expansion
• Concentrate on achieving operational excellence
  in all aspects of the business

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Interbrew Position worldwide (1998)

• Market Leader
• No 2
• No 3
• Specialty beer segment

• Belgium 56
• Canada 46
• Bulgaria 41
• Croatia 35
• Mexico 46
• Korea 35
• Hungary 26
• Netherlands 15
• USA 13
• Luxemburg 25
• Romania 10
• France 9
• Ukraine 8
• Yugoslavia 7

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Stella Artois
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Marketing objectives

• To become one of the leading global premium beers
• To obtain a volume of 10 million HI within 10
  years
• To be among the top 3 brands of the
  premium-segment in any country where the brand is
  marketed

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Competitive EnvironmentWorld Sales Profile
Stella Artois 1998 top 10 countries

• (Mio HL)
• UK 2815 48.3
• Belgium 1180 20.3
• France 1110 19.1
• Italy 166 2.9
• Croatia 120 2.1
• Hungary 84 1.4
• Romania 60 1.0
• Sweden 27 0.5
• East-Malaysia 24 0.4
• New Zealand 11 0.2
• Australia 11 0.1
• Others 213 3.7
• Total World 5821 100

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Competitive EnvironmentSales of Stella Artois
world-wide
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Brand StrategyMarketing mix highlights

• Global recipe objective
• Position Stella Artois at premium level,
• Premium pricing
• Distribution initially through the most
  selective on-trade outlets
• Develop bottle sales first to have a fresh beer
  quality and brand presence
• Develop draught if quality and rotation is
  guaranteed
• OnlyAdvertising support to be organised on a
  global level
• Promotional support to be in line with the
  advertising Campaign reinforcing the brand
  positioning

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The ProductTechnical Description

• A bottom-ferrmented lager beer
• Stella Artois has 11.8 degree Plato
• Stella Artois is a 5.2 alcohol by volume beer, a
  competent character
• CO2 saturation 5.0g CO2/L, an easy digestible
  drink
• Colour 6.5 EBC, a crystal clear golden hue
• Bitterness 26 EBU, pleasantly bitter
• Head retention up to 130 seconds a classic
  Belgian foamy head
• One international Stella Artois recipe
• Some slight deviations could be justified to
  increase taste differentiation, and assure
  adaptation to local market situation)

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Brand PositioningConsumer benefits

• Rational benefits
• High classic European quality lager, with
  distinctive taste, full flavour yet refreshing
• Emotional benefits
• Noble traditions
• European quality
• Heritage, Crafmanship

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Brand StrategyKey success factors

• A motivated partner. Important place in portfolio
• Product quality
• Premium pricing
• Highly selective on-trade distribution
• High quality service (focus on draught, right
  temperature, branded glassware). Staff-training
  or brand-champion
• Premium image (promotion and advertising)
• Consistent building of brand equity and long term
  advertising development
• Spill-over of success from UK (mainly) in native
  speaking English countries

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International Positioning

• Stella Artois is the Classic European Beer with
  Noble Traditions

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International Positioning

• Brand Character
• Premium, special character, yet accessible
• The beer with classic European taste and style
• Mysticism
• Timeless, authentic, with a touch of modernity
• International stature

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International Positioning

• The product
• Bottom fermented lager
• Alcohol 5.2 vol.
• Distinctive taste pleasantly bitter
• Characteristics
• A brewing process that spares no expense to
  produce the best
• Best quality barley
• Carefully selected hops
• Fermentation constantly monitored
• Brewed by people who care and who have a long
  standing brewing heritage
• Traditional floor malting unique in Europe

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International Positioning

• Target Market
• People who enjoy beer
• Men 21-45 years old, classes A/B
• When they thirst for a beer, they want only the
  best
• Open minded

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International Positioning

• Advertising tone of Voice
• Sophistication
• Authenticity, tradition, yet touch of modernity
• Timeless
• Premium, quality
• Special, yet accessible
• Mysticism
• Sense of humour
• Freshness
• Honesty
• European

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Advertising Promotion

• Advertising strategy
• To establish Stella Artois as the reference of
  the premium lager beer segment world-wide
• To create a unique culture, mythology and tone of
  voice around Stella Artois in a distinctive,
  non-traditional manner
• Usage of a global international advertising
  campaign
• A positioning that crosses borders

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International Positioning

• Pricing strategy
• Premium Price its quality and excellence fully
  justify a premium price
• Minimum same price as top international brands
  e.g. Heineken, Carlsberg
• 25 above national brands, 50-60 above B-Brands

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International Positioning

• Packaging
• Super premium design
• Reflects Tradition - Quality Intrinsic beer
  values Europe
• One way 33cl Bottle is the flagship article
• Available in
• Respects the integrity and identity of the brand
• Coherent and consistent implementation world-wide

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International Positioning

• Distribution
• On-premise
• Achieve a high level of quality distribution
• Be the ambassador of Belgian Beer culture
  (draught ritual, branded glasses, Belgian Beer
  Cafes)
• Induce product trial through tastings, samplings
  and promotions
• Off-premise
• Introduce selectively, guaranteeing respect for
  identity and product quality
• Induce product trial and repeat buying through
  merchandising tastings, samplings and promotions

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Future Developments
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Joint ventures, minority participations and
direct export

• Joint Ventures
• Vegana (Dominican Republic)
• Oriental Brewery (Korea)
• Sun Interbrew (Russia-Ukraine)
• Minority Participations
• Diekirch (Luxemburg)
• Femsa (Mexico)
• Direct export to over 80 countries worldwide

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Licenses

• Licensed production of Stella Artois 3.0 Mio HI
• UK (Whitbred)
• Sweden (Spendrups)
• Italy (Heineken)
• Australia (CSB)
• Licensed production of Labatt brands 0.5 Mio HI
• UK (Whitbred)
• Italy (Heineken)

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Observations

• Interbrew is a relatively small player in the
  market, but growing rapidly
• Stella Artois is the chosen flagship Competing in
  Premium Segment
• Growth through expansion and strategic alliances
• Carefully choosen international markets (eg
  Russia)
• Quality maintained through strict control of
  brand and marketing mix issues

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STELLA ARTOIS

• Strategy Marketing Management

MBA (Full Time) 1999/2000
Presentation Team J. Currie, D. McCloskey, F.
McCusker, R. McIlrath, K.Y. Tan