St Peter's at the golden gate

Thursday 29th January 1998 00:00

by Andrew Sangster

The success of a beer brand depends on a myriad of factors. Price is, of course, crucial but its effect can be the opposite of what you might expect. Take Stella Artois as an example. This brand, owned by the Belgian company Interbrew, is a mass-market commodity beer in its home country. But over here, where it is brewed, marketed and distributed under licence by Whitbread, the beer is a premium brand. The catchline for the advertising is "Reassuringly expensive".

The message seems to be that if you tell consumers your product is the best and you charge a high enough price, they seem to believe you. It is a great irony in the UK beer market that the best products, cask ales, command the lowest prices. Cask beer requires far more effort to produce and look after than lager. And yet, per pint, it is considerably cheaper.

The cheapest cask beers tend to be those produced by either regional brewers or tiny micros. These brews are lovingly hand-crafted and yet retail for the least amount of cash. The impact of this pricing policy is to encourage brewers to build sales of their lager brands, particularly at the premium end.

At Beer Brands 97, a conference held at the end of last year in the Landmark Hotel, London, City analyst Andrew Holland gave estimates of the profitability for different beer types. The figures, from broker ABN Amro Hoare Govett, show that premium lager makes £12 profit per barrel for the brewer compared with just £5 per barrel for standard ale, on average. That means premium lager is 140% more profitable than standard ale.

No wonder lager sales are growing.

At the same conference, however, John Murphy, of fledgeling outfit St Peter's Brewery, argued that the future could yet be ripe for ale. Murphy has moved into brewing after a successful career setting up the branding consultancy, Interbrand. This business now has a fee income of £60m a year, so Murphy presumably knows a thing or two about brands.

Unlike other countries such as the USA or the Netherlands, the UK does not have an international "power" beer brand. In the USA it is Bud and in Holland it is Heineken but in the UK there is no dominant beer. Murphy believes the opportunity is there to create an international brand of English beer and hopes to do so with St Peter's.

He shipped his first beer less than a year ago after founding the company in 1995. The main drive will be on Golden Ale, which uses lager malts to appeal to an international audience.

The brewery claims the combination of English Halcyon malts together with the lager malts give a light ale that is similar in character to a full-bodied Czech lager.

All the beers - there are currently nine different bottled ales - focus on the single St Peter's brand; an approach he describes as more like Kellogg's than Budweiser. And all the beers use his unique oval-shaped bottle which is based on an antique bottle from the USA.

l Beer of the month: St Peter's Brewery Golden Ale 4.7% abv. £13.10 plus VAT per case of 12 x 500ml bottles. Tel: 01956 782322. n


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