Brand management becomes key to Adnams success
Simon Loftus clearly feels the need to go on the defensive when he admits that his family's brewer, Adnams, is investing in marketing its beers as "brands".
"That does not mean selling our soul to the devil," he said.
"I make no apology for the fact that marketing is now at the heart of all we do. The fast-changing beer market is increasingly driven by brands, and it's clear that professional brand management is essential for sustainable success."
This week sees the unveiling of the Suffolk brewer's first-ever television advertising campaign, which goes out in the Anglia region. It features local people from Adnams' native Southwold, with a voice-over from TV traveller Michael Palin.
Later this month, a website will also be launched on the back of investment in IT systems within the company, truly bringing the 110-year-old family company into the 21st Century.
The changes mark the completion of a three-year restructuring — both of the business and the management's ideas about its future.
With other regional brewers being taken over, merging or leaving brewing, the Adnams board took a hard look at where it was going.
Joint managing director Hugh Roberts said: "We recognised that the industry was moving all over the place and we had to clarify what our position was.
"We had developed a business that had lost its focus on Adnams and beer and was more focused on distribution."
At the time, other family brewers, such as Eldridge Pope, were exiting production to become pub retailers, but Adnams decided its future still lay in making beer.
"We realised we were really about brewing and needed to be marketing-driven rather than sales-driven," Roberts said.
"We knew we had to have brands, which we hadn't really thought about before, so we identified what our brand values were and who our customers were.
"There are a lot of brewers who are sticking to what they have always done simply because that's the way they have always done it.
"For us, we didn't think that was sustainable in the long term. If you're staying still in the market-place, you find over time that you start to lose good people and can't attract good ones either."
At last September's Pub & Bar show in London, it unveiled a new corporate logo and pump clips after simplifying the long-established name of Adnams & Co to just Adnams.
According to head of marketing Graham Brown, this alone has led to a rise in beer sales in the first three months of this year — even before the ad campaign starts.
"This was the building block on which we are going to go forward," he said. "There was no point investing in advertising if we were not advertising the right things."
After carrying out its first-ever in-depth consumer research, Adnams is initially aiming to expand within its core customer base of male drinkers aged 35 to 50 in its main trading area of Suffolk, using the tagline of: "Real beer from a real place for real people."
"For some regional brewers, branding is a dirty word," Brown said.
"But what we are doing here is not manufacturing an image but tapping into the reality."
Its core trading area is around its 90-strong estate of tenancies in East Anglia, but it has a number of pubs in the London area and its ales are sold even further afield.
Brown said the advertising campaign may be extended to other areas next year and, if appropriate, targeted at a broader range of consumers in the future.
The new marketing focus followed a shake-up in other parts of the business. On the distribution side, it rationalised the range of other companies' products that it stocked, dropping less profitable lines, and jettisoned smaller freetrade accounts.
It sold five underperforming pubs and bought three new ones that are trading "above expectations". It also carried out improvements on its estate, including major projects in Suffolk at the Five Bells, Wrentham and the Railway Inn, Aldeburgh.
In preparation for the increase in demand, Adnams is investing £1m in its brewery, including converting a storage building into a fermentation block.
In the light of these changes, Loftus, who is chairman, greeted a seven per cent drop in turnover last year to £32.8m as "an unqualified success", seeing it as the base for future growth.
Roberts said: "We recognised our re-focus on marketing would be a big investment with no pay-off for quite a while, which we and our shareholders are quite happy with. They see it as a long-term investment in brands and the future.
"We have to look forward. We want to be masters of our own destiny."
Adnams Plc
Address: Sole Bay Brewery, East Green,Southwold, Suffolk, IP18 6JWTel: 01502 727200No of pubs: 90 tensPre-tax profits (1999): £2.2m
