Heineken to spend £100m on 2014 ad campaigns

28 February, 2014

Heineken is spending £100 million on marketing a wide range of new and existing brands in 2014 as it embarks on its “biggest innovation year ever”.

The innovations include new variants of Strongbow, Bulmers, Fosters and Desperados, along with a new range of fruit cider from New Zealand. 

The drinks giant said Strongbow Dark Fruit was the second largest new FMCG product launch in 2013 – after Cadbury’s Creations – as annual sales hit £21 million (IRI to 7/12/13).

It is now launching Strongbow Citrus Edge, which is available from March, and Heineken has earmarked £5 million for an ad campaign for Dark Fruit and Citrus Edge.

“We need to make sure cider has a healthy core proposition but we can’t afford to miss out on the opportunity of fruit cider and the potential it has with younger consumers,” said category and trade marketing director Craig Clarkson.

He said that world cider – driven by Rekorderlig, Kopparberg and Savanna Dry – now accounts for 11% of the cider market, so Heineken is launching a range from New Zealand called Old Mout Cider that will be priced in line with brands like Rekorderlig.

Old Mout takes its name from the Moutere Valley in New Zealand, and it is the bestselling brand in the southern hemisphere nation.

Heineken owns the brand and is launching it in the UK with a new set of liquid under three variants – kiwi and lime, passionfruit and apple, and summer berries.

This range is targeted at affluent young adults and will benefit from a £3 million ad budget.

Another new launch is Desperados Verde – a variant of the existing brand that comes with the same tequila flavour but with an added twist of lime and mint.

The original Desperados is 5.9% abv, but Verde weighs in a 4.7%. Heineken said Desperados is now worth £22.3 million and is driving a £30 million spirit beers category that also includes the likes of Dead Crow and Cuvana, and added that Desperados and Desperados Verde would enjoy a £6 million ad campaign in 2014.

A key focus for Heineken in 2014 is building up what it calls the “moderation category” of 2% abv to 3.9% abv beers and ciders.

It said it currently accounts for 1% of the beer and cider market and is worth £47 million (IRI to 4/1/14) but that if they can grow it to 5% it would become a £300 million category,

Clarkson pointed out that in Australia it accounts for 15% of beer and cider sales, so a 5% share in the UK is achievable.

Foster’s Radler, the 2% abv blend of beer and lemon launched last year, is already the market leader and worth £9 million, according to Heineken.

Clarkson said: “We need to develop a moderation bay in supermarkets and a section in convenience stores so consumers don’t have to look in the Carling, Carlsberg and Foster’s sections for lighter beers.”

Radler has a new alcohol-free variant and a lime and ginger variant. All three will be backed by a £6 million ad spend.

The convenience channel makes up 35% of Radler sales, and Clarkson said: “Convenience retailers need to make the most of innovation as it is released and not wait to see which products perform well in a wider context before jumping on the bandwagon because consumer tastes are moving so quickly.

“You need to make a commitment to NPD.”

There will be two new lower-alcohol products under the Bulmers umbrella – Five Fruit Harvest and Indian Summer, both at 2.8% abv.

“It would have been the easiest thing in the world to launch Bulmers Original low-alcohol,” said Clarkson. “But that’s not what the market’s about – it’s about flavours.”

He added: “We have a range of products at 0% abv and at 2% abv and beers and ciders at 4% abv upwards. We are offering a range of refreshment options for different occasions.

“Heineken is responsible for around 45% of growth in the beer and cider market, and 2014 is going to be out biggest innovation year ever and we are desperately trying to work hard with retailers to help them make the most of it. 

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