Labatt USA

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Labatt USA

101 Merrit 7
Norwalk, Connecticut 06856
USA
Telephone: (203) 750-6600
Web site: www.labattblue.com

ROLLING ROCK ADS CAMPAIGN

OVERVIEW

NOTE: Also see essay for InBev USA.

In February 1998 Labatt USA, a division of Labatt, Inc., of Canada, increased its ad spending by 40 percent as part of a five-year plan to become the largest import/specialty beer marketer in the United States. A good portion of the increase was spent on an aggressive marketing push for Rolling Rock, a product of the Latrobe Brewing Company. Although Rolling Rock was the company's premier domestic brand, it was beset by stagnant sales. Labatt USA charged the New York-based ad agency Ammirati Puris Lintas with the task of creating a new campaign for Rolling Rock. Television spots made their debut later in 1998 and continued into 1999. The ads, which emphasized Rolling Rock's core equities of distinctiveness and quality, were supplied by bicoastal X-Ray Productions. The campaign also had a print component, created by the Bartle Bogle Hegarty agency.

HISTORICAL CONTEXT

Rolling Rock had been brewed in Latrobe, a town located in the Appalachian Mountains of Pennsylvania, about 25 miles east of Pittsburgh, since 1939. In its early days Rolling Rock was a core-market beer that was sold largely in seven-ounce bottles, called "ponies" or "pork chops" by the locals. Early radio ads for the brand proclaimed, "From the rolling hills of the Laurel Highlands: Rolling Rock."

Like most of the other medium-sized regional firms that survived the growth of national breweries in the postwar era, Latrobe plowed profits back into its physical plant and thus kept up with advances in brewing machinery and techniques. From around 3,000 barrels in 1939, Rolling Rock's output peaked at 715,000 barrels. But by 1987 sales had shrunk to 450,000 barrels a year. In order to allow sales to grow, the founding Tito family found itself forced to sell the brewery to a major player.

In 1987 Labatt USA acquired Rolling Rock, ushering in six years of rapid growth for the brand. Sales in Boston, New York, and other markets benefited from shrewd positioning by Labatt. The new owner took a brand that was a regional mainstream beer and reintroduced it to other markets as a specialty beer. On-premise sales were driven by a specially painted bottle. By 1993, however, the brand was once again stagnating. Sales stalled at about 1 million barrels in that year, just as "craft beers" from microbreweries started catching on. The craze for craft brews kept sales of Rolling Rock at about this level until 1997 when, after years of double-digit growth, the expansion of the craft brew segment slowed.

With microbrews clearly falling out of favor, Labatt USA concluded that it could boost sales of Rolling Rock by 5 percent with a plan that involved $12 million in media support, including the brand's first network television exposure. In early 1998 Labatt announced plans to spend more than $20 million in media advertising for the coming year. Its priorities included the first national network TV buy for Rolling Rock; new creative and increased spending for its Mexican beers Dos Equis, Tecate, and Sol; expanded TV support for the Canadian import Labatt Blue; and a campaign for the newly acquired Dutch brew Carlsberg.

TARGET MARKET

Males in their 20s were the principal target market for beer. About 75 percent of all beer in the United States was consumed by men. Since the late 1970s, however, the number of beer drinkers had been declining. The trade publication Beer Marketer's Insights reported a correlation between a decline in males aged 18 to 24 with a decline in beer sales in areas such as California, New England, and the mid-Atlantic states. Not only were there fewer young people, but fewer young people were drinking, and those who continued to drink were drinking less. A 1998 study conducted by the Journal of Studies on Alcohol found that the number of men who identified themselves as frequent drinkers of alcohol had declined and that the number of infrequent drinkers and abstainers had increased.

Some brewing companies responded to the shrinking target market by tailoring their advertising to create a strong relationship between their beers and their customers. "We've been dealing with a flat to declining market for close to a decade," said Susan Henderson, a spokeswoman for the Miller Brewing Company. "To have compelling branded messages that gain loyalty for responsible uses for our products is job number one." Other brewers chose not to target young drinkers specifically. "We're not constantly trying to figure out what the best way to talk to a 21-year-old is," commented Tom Cardella, a vice president of Labatt USA. As a higher-priced specialty brand, Rolling Rock had a marketing strategy that was not geared toward replenishing the supply of young beer drinkers. Instead, marketing efforts in the late 1990s focused on Rolling Rock's heritage as a small Pennsylvania brewer.

The aim was not to target all young beer drinkers but to appeal to a discrete portion of the market. "We have identified a group in the market called premium packaged lager triallists," explained Rolling Rock marketing manager Susan Keyes. "These people try different brands but are not loyal to any particular one. They are 12 percent of [premium-packaged lager] drinkers and account for 20 percent of volume." Rolling Rock's marketing research showed that young premium-packaged lager drinkers liked to keep up with the latest fashions in beer drinking. According to Keyes, "They believe what they drink says a lot about them. They have a 'live for the weekend' attitude." Wooing these consumers emerged as a priority for Rolling Rock in the late 1990s.

COMPETITION

Beer advertising took an unconventional turn in 1997 as competitors such as Miller Lite, Miller Genuine Draft, Heineken, and Bass Aleeach launched edgy campaigns designed to break the mold of the traditional approach. By the next year, however, puzzled responses from consumers and wholesalers prompted almost all of the brewers to abandon entertainment-oriented ads and to shift back to product and user themes.

Miller provided the most prominent example of this retrenchment. In 1997 the struggling number two brewer unveiled a series of quirky commercials for its two most popular brands, Lite and Genuine Draft. The ads in the Lite campaign featured a character dubbed Dick, a fictional advertising executive. One of the first commercials showed a man emerging from a field without pants, his genitals covered by a Miller logo. The Genuine Draft ads, shot in black and white, employed quick-cut editing and relied on music instead of a spoken narrative or dialogue, creating an effect that was akin to a music video.

Miller's sales initially improved, and company executives crowed that the ads deserved some of the credit. Several Miller wholesalers complained about the ads, however, and in 1998 sales resumed their decline. Some members of the advertising industry trade press criticized the ads for alienating Miller's older drinkers. "That's the danger of so-called 'edgy' humor," said former Heineken USA executive Philip Van Munching. "You get 'em with one ad and turn 'em off with the next. It's a stupid way to advertise your product."

Coors, the number three U.S. brewer, enjoyed more success with its unconventional approach. Its 1998 campaign featuring the tag line "Hey Beer Man" was targeted to young men. Coors also increased its ad support for Zima, a citrus-flavored malt beverage positioned as a hip alternative to beer.

MARKETING STRATEGY

According to Labatt USA's official positioning statement, Rolling Rock was "unique and distinctive from all other beers. Rolling Rock consumers tend to be people that are looking for things outside the mainstream. They want something different. Rolling Rock is a lager, so it's more like mainstream beers, but it has a little more body, a little more bite than the traditional lagers. Then there's the quirkiness of the brand, the 33 [printed on the bottle], the horsehead, the small town origin. Everything we do tries to position the brand as different from other beers."

For many years Labatt USA did not do much to plant this image of Rolling Rock in the public mind. Stagnant sales, however, finally prompted the company to launch a full-scale restaging of the brand, aimed at changing its image from a laid-back discovery for 30-somethings to a leading-edge streetwise brew for 20- to 25-year-olds. The restaging dropped references to mountain springs to offset consumers' misperceptions that Rolling Rock was watery. It also cleared the way for a national rollout for a line extension, Rock Light, after two decades of being limited mainly to the core Pennsylvania and Ohio markets.

The 1998 Rolling Rock marketing initiative represented the biggest-ever TV buy for the brand. During the spring and fall of 1998, Labatt USA ran a mix of seven 30-second spots and four 15-second spots during sports telecasts and prime-time and late-night network and cable TV programming. The humorous ads from Ammirati Puris Lintas revolved around Rolling Rock's distinctive green, painted bottle.

On August 24 the print campaign for Rolling Rock, devised by Bartle Bogle Hegarty, was unveiled. The print ads challenged consumers to take actions depending on five rolls of dice. They included winking at a newsagent, growing a moustache, and asking a stranger the time in a Danish accent. The print ads, which carried the tag line "On a roll with a rock," ran in entertainment listings magazines, including Time Out, and were supported by a corresponding poster campaign. Labatt USA also ran a separate summer promotion in which consumers could get posters of artists' renditions of the Rolling Rock bottle.

THE MYSTERY OF "33"

An element of Rolling Rock's appeal involved the unexplained "33" on the back of each silk-screened green bottle. What did it mean? Where did it come from? Why was it there? The number had provided hours of conversation in bars over the years, not to mention E-mails, Internet discussions, and late-night college bull sessions. The brand did its own promotions on the question, offering contests for the best explanations.

The most common answer was that the number referred to 1933, the year of the repeal of Prohibition in the United States. Other popular explanations were that 33 was the number of words in the original Rolling Rock advertising slogan, the number of letters in the ingredients of the beer (hops, malt, water, rice, corn, brewer's yeast), and the number of the race horse on the bottle (the horse's number was not shown).

Even the brewery's owners, Labatt USA, professed to be mystified about the origin of the number. "The 33 is the first thing people ask me about," said Darin Wolf, Labatt USA's director of marketing for the brand. Quirky ad campaigns were spun around the number, one noting the synchronicity of the number and Super Bowl XXXIII and another coinciding with the introduction of the 33-cent stamp.

What was the real truth about the mysterious 33? The straight story was this. The Latrobe Brewing Company was originally a satellite of the Pittsburgh Brewing Company, best known as the brewers of Iron City Beer. After the repeal of Prohibition, Pittsburgh sold off its smaller brewing facilities, and the Latrobe brewery was bought by five brothers from the town—Frank, Joseph, Robert, Ralph, and Anthony Tito. The Titos sold beer for five years but wanted to launch a new brand that would get sales going on an upward trend. They came up with a name, Rolling Rock, but were looking for a slogan that covered all of the salient facts without taking up too much space.

According to James Tito, a member of the family, whoever came up with the slogan proudly scrawled "33" at the bottom of it to show how concise it was. The brewery sent the slogan off on the original sheet of paper, forgetting to tell the printer that the "33" was not part of the advertising. Thousands of fairly expensive silk-screened bottles later, the brewery realized that it had a problem. After considering the price of destroying the bottles and of silk-screening new ones, the brewery decided to let them go out without explanation. It was a surprisingly smart move.

Rolling Rock was a specialty product that relied on package design for its main means of brand recognition, and so its bottle played an important role in the repositioning of the brand. Rolling Rock officials considered its green glass, long neck, and mysterious "33" as core equities. "Everything revolves around the longneck bottle," according to Brad Hittle, group director of marketing at Labatt USA. "Consistency is the name of the game when you're a niche player." The taller container with the painted label provided "genuine character" to the brand, Hittle said. As for the green, blue, and white presentation, he added, "They're not sexy colors. But that's what the consumers like."

There was only one problem. Until 1998 the painted long-necked bottles of Rolling Rock were available only on-premise, that is, in bars and restaurants. Some years earlier, as a cost-cutting measure, the brand had gone to paper labels for off-premise sales. But according to Rolling Rock marketing executive Joe Gruss, the change had caused a problem. "We were known for the silk-screened bottles. People would drink it in those bottles on-premise. When they got to the store to buy beer to take home and saw paper labels, it was kind of a let-down. It was the same beer, it was just a perception change."

In 1998 Labatt decided to return to selling Rolling Rock exclusively in long-necked, painted bottles. Doing so required the brewer to raise prices almost 50 cents per six-pack, thus repositioning the brew between domestic premium and specialty beers. But the decision to go to the painted bottles exclusively had an unexpected result that made the higher costs a moot point. "When we made the decision to eliminate the paper labels, we did quite a bit of quantitative research on the change, and the perception of the new packaging," said marketing executive Darin Wolf. "Not only were consumers willing to pay more for the silk-screened bottles, they actually expected to pay more."

OUTCOME

Rolling Rock's 1998 ad campaign, stressing its Pennsylvania heritage and distinctive green bottle, was one of the big winners at the 14th Annual "Best of New York" Addy Awards honoring the best creative advertising of the year. The campaign won three Addies in the alcoholic beverages category for the spots titled "Thirsty," "History," and "Evolution."

The campaign also proved popular with Rolling Rock wholesalers, who seemed pleased that advertising support was finally being provided for the brand, even if they did not fully comprehend the strategy. "They seem to be working," one wholesaler said of the Rolling Rock ads. Then he added, in a comment typical of wholesalers on any brand of beer advertising in the 1990s, "Besides, I don't know what we're looking for in beer ads any more."