The move past India Pale Ale tries to broaden a very narrow niche
With the major beer producers seeing flat sales and craft breweries taking an increasing share of revenue, Alexander Keith’s is hopping to it.
The Labatt Breweries brand has introduced two new ales that pay homage to the backbone of beer – the hop. Hops are the ingredients that provide beer with its bitterness, taste and aroma.
The new Alexander Keith’s Hop Series is comprised of Alexander Keith’s Cascade Hop Ale and Alexander Keith’s Hallertauer Hop Ale. The hops are sourced from the U.S. Pacific Northwest and Germany respectively.
The new single-hop ales are available across the country in several configurations, including six-bottle packs, mixer 12-packs and 473ml cans. Both products are being sold at a “slight premium” to the flagship Alexander Keith’s India Pale Ale product, said brand manager Mike Bascom.
In development for a year, the new beers were selected from approximately five or six hops that were narrowed down through customer research and consultation with the Labatt brew masters, said Bascom. The Hop Series will cater to beer drinkers 25+ who are seeking a different beer experience, he said.
“We expect that everyone from core drinkers to micro-drinkers are going to find this one appealing,” said Bascom.
Labatt is supporting the product launch with traditional above-the-line marketing including a 30-second TV spot debuting next month, out-of-home, digital and print advertising.
While the TV spot is still being developed, Bascom said it is “disruptive” and “very different” to standard beer ads. The spot will showcase hops and their role in the brewing process.
The company is also using the beer’s packaging as a “canvas” to educate consumers about single-hop ales. The packs will describe the flavour profiles drinkers can expect to encounter, the origins of the hops and serving tips.
“We’re using the packaging to catch consumers’ attention, but it’s also a critical educational tool,” said Bascom. “It’s an innovative way of using packaging that I don’t think anyone has really done to the extent we are.”
Both the advertising and packaging were developed by Toronto agency Red Urban, with UM Canada handling media.
Labatt is also supporting the product launch with a national sampling program featuring its brew-masters and “beer ambassadors” who will educate consumers about hops and invite them to taste the two new brews. The sampling program was developed by Mosaic.
The new single-hop products reflect an increased consumer appetite for more flavourful beers that has contributed to the rapid growth of the craft beer category in recent years, said Bascom.
In an August 2012 report entitled “Good Time for a Beer?” BMO Nesbitt Burns said that the North American beer market is in the midst of a “structural shift,” characterized by changing tastes and fiercer competition.
While beer sales in Canada are flat, the report noted that craft beers and specialty imports are a “dynamic source” of competition to major beer producers such as Labatt.
While the report did not provide Canadian-specific numbers, it said that the number of craft breweries in the U.S. went from 269 in 1999 to more than 1,600 by 2010. While the craft beer segment’s market share is less than 6% (5.7%) it earns nearly 10% of total industry revenues, said the report.
Bascom said that because single-hop ales tend to be more bitter than standard beers, they appeal to only a small segment of drinkers. “A lot of the stuff that’s out there today is not approachable,” he said. “There are very few people that really like it.”
The Alexander Keith’s Hop Series uses a technique known as “dry hopping” – in which fresh hops are added during the maturation phase – for a “hop-forward” flavour that’s less bitter than standard single-hop ales, said Bascom.
“It’s a great way to satisfy the needs of our beer drinkers who are looking for more variety, but still provide them with a beer that’s approachable,” he said.
In a recent post on his blog OnBeer.org, Edmonton-based beer writer Jason Foster said that corporate brewers like Labatt are “actively trying to mix into the flavourful end of the beer market” as it gains in popularity.
Noting that most beer drinkers tend to prefer lighter, sweeter beer, Foster called hops “the last frontier” in beer exploration, but predicted that tastes would eventually catch up to their intention to sample more flavourful beers. “I see this as the latest admission by the corporate brewers that they are on the wrong side of the market,” he wrote.
