In an attempt to double the profits of its main brand by 2015,
Danish beverages company Carlsberg A/S (CARL-A.KO) Tuesday said it
would revamp the branding, ingredients and distribution of its
Carlsberg lager, including a new range of packaging and a new
slogan.
Unveiling the revamp of a beer that has been brewed since 1847
and labelling virtually untouched since 1904, Carlsberg executives
were bullish the move would drive an increase in sales, targeting
drinkers with a new slogan: "That calls for a Carlsberg", which
replaces "Probably the best lager in the world."
However, corporate history is littered with expensive failed
re-branding exercises, including Coca-Cola Co.'s (KO) 1985 attempt
to relaunch its Coca-Cola brand with a new recipe and image and
British Airways' u-turn on removing the Union Jack from the tail
fins of its aircraft in the 1990s.
"It's the largest and most significant move by Carlsberg in my
time at the company," said Carlsberg Chief Executive Joergen Buhl
Rasmussen, who has been at the helm since 2007 and with the company
since 2006. "We have the company ambition to become the fastest
growing brewer in the world, and this is a means of achieving
that."
"This brand has so much potential, and we haven't been good
enough at exploiting this potential," the CEO added. "Although
international recognition is good, it is not enough. We want people
to know that Carlsberg beer stands for something - for heritage,
for quality, for great taste and for doing the right thing."
The Carlsberg brand is the brewer's best known brand, not least
due to its aggressive sponsoring of international soccer events and
teams, but sales of Carlsberg beer make up just 10% of the
company's total sales. It markets about 500 brands in 140 markets,
and makes most of its money selling local brews in individual
markets. Carlsberg, along with its other premium brands like
Tuborg, Kronenbourg and Elephant Beer, has only a moderate volume
footprint in individual markets.
Carlsberg's brand logo, virtually untouched since it was
designed by Danish Art Nouveau designer Thorvald Bindesboll in
1904, will retain much of the original design but has taken on a
much brighter hue of green, while the writing has changed from gold
to a gold-silver alloy color and the Danish Royal Crown has been
simplified. It will also always now carry the Brewer's Star, the
Hop Leaf and 'Copenhagen 1847' after the Danish capital where it
was first brewed.
The new graphics will be rolled out across the more than 140
markets where the pilsner-style beer is sold. A bottle embossed
with the Carlsberg name, already used in some markets, will become
standard for all markets.
Carlsberg will also brew the beer with a new strain of barley
developed by its own scientists. The Null-LOX barley will keep the
beer fresher for longer and provides better foaming
characteristics, Carlsberg claims. It will also be brewed using a
new fast-acting yeast strain.
The Danish brewer, the world's fourth-largest by volume behind
AB Inbev NV (BUD), SABMiller PLC (SAB.JO) and Heineken NV
(HEIA.AE), hopes the revamp will make its main brand a more
"premium" product and pull in new customers, accelerating sales
growth.
"The changes to both the brand proposition and the visual
identity will help to make the Carlsberg brand more consistent,
appealing and distinctive to its consumers in both its established
and newer markets," it said. It's new slogan "encourages consumers
'to step up and do the right thing', rewarding themselves with a
Carlsberg for their efforts," it added.
However, executives were evasive on targets. Rasmussen declined
to say how much the revamp will cost and wouldn't give a sales
target.
The CEO expects sales to increase due to the revamp, and
increased prices through making the beer more premium will more
than offset an increase in marketing costs, boosting profitability.
"But we are not giving out specific numbers," he said.
He stressed that none of the expected profit improvement will
come from cost cutting.
Tosten Ringberg, branding expert and professor of marketing at
Copenhagen School of Business thinks Carlsberg have a challenge in
making a uniform brand work across the company's diverse markets.
He's not yet seen the Carlsberg brand makeover, but said Carlsberg
had previously told him they had challenges settling on an
efficient global branding strategy.
"Successful branding is basically a fusion between understanding
consumer culture and psychology. It's a huge challenge to pinpoint
the common values and cultural markers between so many different
countries and cultures," Ringberg said.
"All I can say is that the success hinges on how well they've
done their homework, and how well they manage to identify a
universal cultural denominator that will overcome the cultural
differences of their markets."
Carlsberg and Tuborg are Denmark's biggest selling beers, but
first impressions on the streets of Copenhagen were mixed.
"The old one was more classic, traditional...a little
old-fashioned. This is more youthful. I like it, but it addresses a
younger target group. The new slogan may be a little bit too
difficult for that target group," said Anders Hempel, 19, a
self-employed IT entrepeneur.
"I think it looks like an orange juice bottle. It definitely
appears more refreshing, and not at all like a pilsner brew. The
slogan isn't that bad either, it's uses simple words that I think
will work and be understood in a large part of the world," said
children's clothing shop owner Helena Holm.
Graphic designer Bjoern Smalbro, 52, said: "It looks like a soda
pop. I don't like it at all. It must be a misunderstanding. And
'That calls for a Carlsberg' - I don't believe it. A reward-slogan
could work well, but the words don't fit well with Carlsberg.
They're never gonna double their profit with this."
-By Flemming Emil Hansen and Sven Grundberg, Dow Jones
Newswires; +46-8-5451-3098; sven.grundberg@dowjones.com
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