For the past six years the beer industry in Canada has suffered a decline. Consumption has levelled off because some former beer drinkers have switched to wine, and others have quit because of the new health consciousness. As a result, the business has staggered under an anemic annual growth rate of 1.7 per cent per capita since 1970. In response, bottlers in Saskatchewan, British Columbia and Alberta have launched a new marketing experiment that could rock the foundations of the demoralized brewing industry: the introduction of no-brandname beer. Said Herb England, vicepresident and general manager of the Prairie region of Labatt Brewing Co., the first major brewery to introduce the cut-rate, plainly packaged beer: “We are happy with the way it has been accepted so far. I am sure the other breweries are watching with great interest.”
Indeed, since December, when Labatt introduced generic beer in Saskatchewan—at $7.75 per 12-pack vs. $9.20 for well-known brands—no-brand-name
has captured 15 per cent of the market. In British Columbia the independently owned Prince George-based Old Fort Brewing Co. was the first Canadian brewery to introduce generic beer when it launched its $6.90 12-pack last April. It was an instant success. Old Fort, which previously enjoyed a three-percent share of the B.C. market with its other brands, soared to a 10-per-cent market share when it began stocking its brown cases of “Beer Beer”—as it is locally known—on B.C. liquor store shelves. Sales have levelled off to five per cent of the market, but there are now three more Old Fort generic options to choose from—malt beer, Beer II (a case of 24) and a light beer. Said Old Fort President William Sharpe: “We went into the market with nothing to lose. The experts said beer sales are all based on image. It took upstarts like ourselves to show them that they were wrong.”
Generic beer remains a western phenomenon because of free pricing in British Columbia, Alberta and Saskatchewan. Unlike Ontario and the Atlantic provinces, where beer prices are standardized, western companies sometimes discount their regular brands. Still, Labatt conducted six months of market surveys to decide whether Saskatchewanians were familiar with the no-brand-name concept before it launched the new product. The beer is a different recipe and tastes not unlike regular beers. Said England: “The savings come in cheaper packaging and lack of advertising.”
If the generic experiment has shown anything, it is that beer drinkers are willing to abandon their favorite brew for the sake of saving money. It has also demonstrated that they are willing to forgo fancy labels and lavish lifestyle beer commercials for the brown-paperbag approach to beer drinking. Said Edmund Jordan as he carried two cases of no-brand-name beer from the 4th Avenue liquor store in Vancouver: “None of these beers tastes much different anyway. So why not save a few bucks ?”
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