E-Malt.com News article: UK: Scottish & Newcastle launches Foster’s Twist with £6 million campaign

This week the efforts of Tony Froggatt, chief executive of Scottish & Newcastle, will bear fruit with the launch of Foster’s Twist, a new bottled lager, via a £6 million nationwide marketing campaign, Sunday Herald posted August 20.

A lighter version of the Aussie beer, Foster’s Twist leverages S&N’s acquisition in March for £309 million in cash of all rights to the Foster’s brand in UK and Europe. That followed years of frustration over its lack of control.

It is also the Edinburgh-based brewer’s first extension of the brand. The last one, Foster’s Ice, was developed more than a decade ago by Courage Breweries before its takeover by S&N.

Depending on the success of Foster’s Twist, other derivative products are planned, say S&N sources.

At 4.5% alcohol by volume and made with citrus hops, Foster’s Twist is aimed at 22 to 28-year-olds. This pitches it directly against high-margin, bottled lagers such as the long-established Corona and new competitors such as Beck’s Green Lemon, a half-strength beer being trialled in outlets in Glasgow.

S&N first released the “easy-drinking” beer in early July to gauge reaction and has been encouraged by the response. According to Froggatt, Foster’s Twist has taken off faster than any new recent product.

An S&N spokesman adds: “We’ve got exciting listings with the big pub chains and with supermarkets. We’re looking to repeat the success of Foster’s Ice.”

Foster’s brand manager Phil McTeer says the strategy is to “drive category growth through product innovation and marketing investment”.

The beer will be sold in four-bottle packs for around £3.50. M&C Saatchi’s television campaign will pursue the same sun and beach theme of the successful Foster’s ads, presenting Foster’s Twist as the “laid back lager”.

S&N had been developing Foster’s Twist for 18 months, long before it bought the British and European rights to the brand from Australian owners Carlton and United Breweries. However, it accelerated the project after the acquisition went through to catch the late-summer market, when lager sales are strong.

The purchase of full control of the Foster’s brand in the UK and Europe was motivated in part by S&N’s difficulty in bringing new initiatives to market. Although S&N was responsible for 82% of Foster’s total worldwide sales by volume, sources say it was difficult to get agreement on them from Melbourne-based Carlton and United Brewers.

“You can’t respond to opportunities as quickly as you might if you don’t own the brand,” an S&N source explains. “Now we don’t have to go and fight [with Carlton and United Brewers].”

S&N has owned the licence to brew, package and market Foster’s here – but not full control – since 1995.

Under the brewer’s stewardship, the brand has done well, particularly in Britain where the introduction of Foster’s Superchilled at a temperature of 3˚C boosted volumes during the summer.

Over the past three years, sales by volume averaged 6% in Britain, Foster’s biggest market, and 15% in mainland Europe. In both cases sales beat the average increase in the overall beer market.

Another irksome aspect of S&N’s contract with Carlton and United was the obligation to pay annual royalties on sales, amounting in 2005 to £15 million.

Since taking full control, S&N has felt free to invest more heavily in a brand which last year accounted for 14% of total sales. It has, for instance, dramatically upped the marketing budget, far in excess of the contractual marketing spend when Foster’s was under Carlton and United’s control.

The Foster’s Twist campaign will push 2006 marketing spend on the brand to a record £50m.


23 August, 2006