CUB sees revenue decline despite Great Northern powerhouse
ABInBev last week released its first quarter 2019 results showing revenue declines for its Australian operations.
The multinational brewer, which owns CUB, announced that it experienced a low single-digit revenue decline “driven by lower volumes due to the later timing of the Easter holiday as well as a softer industry performance amidst declining consumer confidence”.
The report said its results globally were held back by the later timing of the Easter holiday this year, describing it as an “important consumption occasion” in markets including the US, Mexico, Colombia, South Africa and Australia.
“We expect this impact to normalize on a half-year basis,” the report said.
The first quarter results showed that in the Australian market “segment mix shift to easy drinking and premium products continues, with our Great Northern franchise as well as our craft portfolio of 4 Pines and Pirate Life delivering double-digit volume growth”.
“Corona saw continued volume growth underpinned by stronger brand health metrics.”
The first quarter results mark a decline from the previous full year’s results. In its 2018 Annual Report, ABInBev announced that revenue grew by low single digits despite a volume decrease.
Low single-digit revenue growth despite volume declines in 2018 highlighted that the brewer’s premiumisation strategy is working but also shows just how much pressure it’s facing in its mainstream business.
Figures from IRI, the big data and technology expert for consumer industries, reveal the powerhouse Great Northern is as the liquor industry’s number one dollar growth driving brand.
Alistair Leathwood, IRI’s Chief Commercial Officer for Asia Pacific said beer brands feature prominently among the top dollar growth generating masterbrands, however, the effect Great Northern is having transcends the beer category.
“The masterbrand’s 37 per cent dollar growth in 2018 amounted to $202 million, over two-thirds of the remaining nine brands growth in retail liquor’s top 10,” he said.
“Growth has slowed from 79 per cent, or $240m, but still packs a punch.
“Over the past two years, the Great Northern masterbrand has added $441 million, 41 per cent share of total industry dollar growth.”
Contemporary beer, of which Great Northern is the flagship, generated $3 of every $10 spent on beer in 2018 and saw growth of over 9 per cent in 2018.
“As a comparison Classic Beer which also generated $3 out of every $10 spent on beer experienced a sales decline of 6.6 per cent and continues to trend lower,” Leathwood said.
“Craft beer delivered 8.7 per cent growth in 2018, however, growth has been slowing quarter-on-quarter for the latest 3 quarters.”
The ABInBev results come as CUB has announced a brand refresh for Great Northern,its first since it was launched almost nine years ago.
CUB announced that the Great Northern Original and Super Crisp packaging has been updated to give it “a more contemporary look and to help customers differentiate between the two different products”.
Yatala brewery Plant Manager Tom Robinson said while the packaging looked different, what was inside the cans and bottles remained exactly the same Great Northern.
The refresh includes changing the colour of cans from gold to sand “to reinforce the message that Great Northern is a drink synonymous with Australia’s laid-back outdoor lifestyle,” the media release advised.
Great Northern Super Crisp labelling now includes the words “low bitterness”.
“Great Northern Super Crisp has always been a less bitter blend,” Robinson said.