Anyone familiar with my sometimes very public beer drinking preferences will not be surprised to hear that I tend not to count Labatt Blue among my preferred brands. (And before the competition gets to feeling to self-satisfied about this revelation, let me quickly add that neither do I stock my fridge with Canadian, Bud, MGD, Coors Light or pretty much any other big brewery lager.) Nevertheless, as an industry observer, I can’t help but wonder what Labatt is doing with their venerable flagship these days.
For example, while enjoying a Blue Jays game with my dad over the weekend, I couldn’t help but notice that the beer vendors trolling the aisles of Toronto’s Rogers Centre were not hawking Blue, as they have in days past, but were instead flogging Budweiser and Bud Light. Further, flipping through the pages of the July issue of Toronto Life, I come upon an ad not for Labatt’s Canadian market stalwart, but for their parent company’s trademark European brew, Stella Artois. And come to think about it, my television viewing of late, while admittedly sparse during these summer months, seems to have been largely been punctuated by advertising images of Budweiser and Kokanee, rather than Blue.
So I repeat, what’s up with Blue?
One rumour I’ve been hearing for months is that Labatt’s owner, Belgium-based InBev, is preparing to reposition Blue as a discount brand, rather than its current status as a premium mainstay. This I have a hard time believing, since it would mean: a) A considerable revenue loss in order to take a gamble in the discount segment, which is already showing signs of leveling off; and b) a tacit admission that Blue is not, and presumably never has been, a premium brand. Neither consequence, I suspect, would be too palatable to the InBev brass.
The other and, to my mind, more believable possible scenario is that InBev has decided to strap their saddle to the back of the Anheuser-Busch behemoth, Budweiser, brewed in Canada by Labatt, and ride it all the way to the bank, allowing once-proud Blue to die of attrition. Sure, it means splitting a revenue stream with A-B, but it would also allow the company to take advantage of the massive advertising strength of the American brand without spending a penny, presumably freeing up agency cash for other brands like the aforementioned Kokanee and Stella. And in a market that’s growing increasingly fragmented, that might just seem pretty darn appealing.
