Beerlines

Insights on beer marketing & PR by a beer-war vet

19 September

VB and Alan Bond: big lessons in taking beer consumers for granted

‘We put the consumer first.’

Any trust which mainstream beer consumers held for this claim, and the big brewers that made it has, too often, been shaken.

This post highlights two big lessons from both of Australia’s major brewers.

One is recent concerning VB. The other is from the 1980s but still provides relevant learnings in how not to treat loyal beer consumers. It concerns Alan Bond and his Bond Brewing empire.

Alan who? 
Fair question. The lesson however comes from what his Bond Corporation did to the three major state breweries it took over. They made up over half the national beer market and are now owned by LION, Australia’s largest brewer.

Bond Brewing corporate stainless steel replaces the Castlemaine Perkins sign

There are two great articles in Australia’s Beer and Brewer magazine which cover this fascinating and calamitous period in Australian brewing : one by ex-Four Corners journalist Paul Barry and the other by leading beer writer Matt Kirkegaard, editor of Australian Brews News.

A band-aid approach to trust
High-profile and public ‘whoops: we got it wrong’ flip-flops might help restore some trust. In the end though, loyal consumers still think they were taken for granted and ask ‘when will it happen again?’

The silver lining to these marketing and PR blunders is some big lessons for small brewers in what not to do in building and maintaining consumer trust.

Trust is hard to develop; easily lost; and unforgivingly hard to patch up. Band-aids only go so far.

If consumers really are your number one priority then you must live and breathe that focus 100%:  honestly, openly and transparently. Otherwise – especially in our increasingly networked market – your ‘trust’ credentials will be probed and found wanting.

Here are the two classic case studies in taking Australian beer consumer trust for granted:

VB’s apology letter in the press

VB: stuffing the golden goose
This brand’s recent reversal of its alcohol content and advertising begs the question: “why, when you have the biggest most successful beer brand in the land would you stuff around with it?”

The answer of course is profit. Increasing profit is sensible: diminishing your major brand and pissing off consumers in the process is not.

Clearly the consumer did not come first.

New owners SAB-Miller are to be applauded for slamming on the marketing brakes and throwing VB into reverse. Regardless, the brand now faces a hard-earned path to recovering consumer support and lost market share.

Bond Brewing: board room egos
This classic corporate repositioning blunder seriously overlooked the consumer. Ego was a very dirty word as it turned out for Bond Corporation.

XXXX: jumps from Brisbane to Perth

Consumers wanted to avoid the fact their XXXX, Tooheys or Swan beer was owned by Bond Corporation.

But ‘we know best’ said Bond Corporation rubbing the ‘B word’ into consumers’ faces at every turn: including putting a Perth WA corporate address on all beer labels and pulling down the Castlemaine Perkins Limited sign at the XXXX brewery and replacing it with a monstrous stainless steel Bond Brewing logo.

That was too much for consumers: some actually thought the brewing shifted to Western Australia!

Power Brewing popped up to exploit this corporate hubris quickly taking 20% of the Queensland market away from XXXX with a very cheeky ‘Sorry Bondy’ campaign.

Whether the shift is as drastic as this or simply changing your company name from ‘Breweries’ to ‘Beverages’, it’s a wise move to check with consumers first.

Cheers!

PS: Thanks to Rob Greenaway and Mike Bannenberg for sourcing the label. I should have kept one!

Full disclosure:I was directly involved in the PR for the Bond Brewing repositioning and in the alcohol reductions at CUB which preceded VB’s.

  • How much, in your opinion of the VB thing (original change, not the retraction) has to do with marketing just wanting to do something?

    It’s difficult looking after a big established, tradtional (yet still profitable) brand, marketers tend to want to put their stamp on things, fiddle with something, because standing in front of your boss saying ‘I didn’t do anything new and sales dropped 0.1%” is less appealing that saying – Well sales dropped 0.1% but I tried strategies A,B and C to stop the decline.’

    • beerlines

      Thanks Leon. I’ve had a number of emails and calls from ex-CUB execs who confirm your suspicion. A number said exactly that – “they just wanted to do stuff!” “Mistaking activity for progress,” is one quote that sticks.

      A few callers extolled the virtues of much earlier CUB marketing directors who allowed absolutely NO fiddling with the brand. I agree with that discipline up to a point. Being at XXXX during the late 80s and early 90s, I saw VB’s softly-softly, low commercial no hoopla or sponsorship approach effectively undermine XXXX and infiltrate Queensland. Lion Nathan ran around modernising XXXX and sponsoring everthing in response. That just made if worse for XXXX as loyal drinkers said WTF? You’d think XXXX’s radical response (mirrored by Tooheys and West End and Swan/Emu Export) would have been a good lesson for VB a few years later.

      That said: at the time there was a view that VB advertising could be refreshed. But clearly that thinking went too far.

      Fortunately CUB got taken over by brewers. SAB-Miller have got strong beer brand marketing creds which they appear to be applying well. May it continue.

      Cheers!

    • PK

      The great skill of marketing is knowing when to act or not as the case may be, there have been far too many young marketers that have come through wanting to carve their initials into the brand. The brand belongs to the consumer, marketers you are at best the janitor… clean polish and keep the brand pristine…. or else

  • BEEMAC

    Could Leon be the Leon who worked in the industry for a short period.
    Not only was it marketing types doing ‘shit’ for the sake of doing ‘shit’, it was marketing types who knew diddly squat about beer consumers and the beer market in general.
    I could go on but I won’t bore you Parky.

  • No I’m not the Leon who works in the Beer Industry. Nor am I the Sammartino who worked at CUB (although he is a cousin).

    I am a Leon who work’s the media/advertising industry though

    • beerlines

      Thanks Leon. Unless they are spam or offensive I approve the comment. Happy Friday! What about a beer?