Bruers Bright: on tap only

It’s an interesting strategy to launch an on-premise brand only. But it makes sense in view of the fact that the two major off-premise chains are competing with each other on price. Major brands get discounted so frequently that brewers have to focus on the on-premise (30 percent of total beer sales, says Foster’s beer unit CUB) if they want to save their bottom lines.

Pacific Beverages stirred up the on-premise market earlier this year with the release of Peroni on tap, installing the distinctive fonts in pubs and clubs and offering other lucrative incentives to get access. Now they would like to go one better with Bruers Bright.

CUB and Lion Nathan National Foods are unlikely to step back from the challenge.

At an investors’ day in October 2010, CUB announced that it expects beer volumes to drop 4 to 5 percent in the six months to December 2010. These declines could crimp CUB’s EBIT growth by about 6 percent, analysts say. Pricing growth, the driver of the beer economic engine, is expected to moderate and not exceed the Consumer Price Index.

Therefore, CUB will have to better manage its portfolio. Unfortunately, CUB has far too many “traditional regular brands” (VB, Carlton Draught) which are declining at 4 percent annually while it has too few brands in the categories which are capturing market growth. These growth categories include “new style regulars” (dry, low carb and flavoured beers), growing at 17 percent per annum, craft beers, growing at 32 percent and “premium international beers”, growing at 15 percent.

What is more CUB will now have to come up with its own “bright” beer, should Bruers Bright and XXXX Summer Bright Lager catch on with consumers.