Carlsberg's marketing is under pressure after it loses taste in Europe
Carlsberg’s latest marketing push is under pressure to drive higher revenues for the Danish brewer after it reported a dip in the second quarter that has also forced it to review its strategy.
The business was particularly affected in Western Europe with UK volumes declining by 6 per cent after facing tough comparisons with last year’s favourable weather and World Cup activations. Revenue fell by 2 per cent to £1.01bn from £1.03bn in premium markets, this despite a hiked up investment in marketing activity which has yet to bear fruit.
Carlsberg will be pinning hopes on its newly revived ‘If Carlsberg Did…’ tagline which made a return after a four-year hiatus in the wake of a more reactive ad strategy to capitalise on opportunities for user-generated content and internet memes.
It will also look to its “biggest ever” season of football sponsorship around the Premier League and Euro 2016 championship, with plans to ramp up its football focused ad strategy over the next year to ensure the brand is seen as the beer of choice for fans of the sport.
Speaking on a conference call with investors this morning Carlsberg’s new chief executive Cees ‘t Hart, said the brewer is facing a “heightened sense of urgency” to execute cost saving initiatives it announced at the beginning of the year.
“We must step up further to achieve the full potential of the group,” he said. “To do so, we have initiated a process of revising the group’s strategy to re-establish and further strengthen our financial flexibility”.
When asked if the Carlsberg brand is in need of increased investment so that it becomes “front of mind” for consumers, ‘t Hart was evasive and replied, “I always want to have more support for brands but I think we should come back on that… I need to develop my view on allocating levels [of support]”.
In the UK Carlsberg said its commercial focus now is to up volume and value market share through continued development of its local power brands, further roll-out of our international premium brands, innovations and premiumisation efforts.
Last month, Carlsberg revealed that it had invested in 150 .beer website domains in an attempt to highlight the premium attributes of its flagship brand and tell stories that “positively impact” the image of beer rather than focusing on the brand.
Overall revenue fell from £1.81bn to £1.78bn largely blamed on Carlsberg’s misadventures in Russia where revenue tumbled by 19 per cent attributed to poor economic conditions in the country.
The world’s fourth-largest brewer issued a profit warning for 2015 and said underlying operating profits are expected to fall slightly this year against a previous forecast of a mid- to high-single-digit rise.