SABMiller plans to re-launch Foster’s to revive fortunes
Bangalore: SABMiller India Ltd plans to re-launch its Foster’s beer label to revive the fortunes of the first successful international beer brand in India and drive the company’s growth in the country, according to three people familiar with the matter.
SABMiller plans to announce the re-launch of Foster’s later this month, the people cited above said, requesting anonymity.
SABMiller India, which also owns brands such as Haywards, Miller High Life and Knock Out beer, has created a new marketing campaign to promote the re-launch that will do away with the Art of Chilling tag and the famous Australian for beer tag that Foster’s is known for in India, said one of the three people who has seen the campaign.
The company did not respond to an email seeking comment.
Foster’s was launched in India in the late 1990s and went on to become the first successful international beer brand and the second-largest mild beer after United Breweries Ltd’s Kingfisher. SABMiller acquired Foster’s India’s operations in 2006 and launched Foster’s Strong as it sought to get a higher share of strong beer sales, which account for nearly 85% of all beer sales in India. However, Foster’s Strong barely made a dent in the share of United Breweries’ Kingfisher. Even the original Foster’s mild beer has lost its sheen and sales in the past five years, losing ground to rivals such as Kingfisher, Tuborg and Budweiser.
Foster’s Strong will be renamed Foster’s Gold, while the mild beer will have new packaging, the people cited above said. Mild beer refers to a brew with 5% alcohol content while strong beer contains 8% alcohol.
“The company surveyed consumers and found out that some people had a problem with the taste, so Foster’s Gold will have a less bitter brew,” one of the people said.
Foster’s fortunes reflect those of its owner in India.
The move to re-launch Foster’s is part of SABMiller’s strategy to revive growth and recover market share from the market leader United Breweries as well as newer rivals Carlsberg and Anheuser-Busch InBev, which own Tuborg and Budweiser, respectively. Though SABMiller is India’s second largest brewer, generating sales of Rs.3,348.75 crore for the year ended March 2013, the company has consistently lost out to these rivals in the past four to five years.
Last year, volume growth in beer sales was the lowest in at least a decade, with brewers reporting a sales increase of roughly 1-2%, according to data from industry executives. In the first nine months of the last financial year, SABMiller’s published numbers show its volumes dropped while price increases pushed up sales to less than 1%.
SABMiller has also changed its senior management team in India over the past 18 months. It named Grant Liversage as India managing director last June, replacing Paolo Lanzarotti; Darioush Afzali replaced Derek Jones as marketing head in October 2012.
“The brand (Foster’s) has lost some sheen,” said Raghu Vishwanath, managing director at brand consultancy Vertebrand Management Consulting. “SABMiller needs to do something innovative, not on the product and marketing sides, something that can re-energize the category like what they did with their first campaign.”