No smooth outcome as Stella 4% sales fall

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Sales of Stella 4% - hailed as the most successful alcohol launch of the past 10 years - have crashed by more than 30% over the past 12 months.

The beer, which was developed for the UK market and debuted in August 2008, was called the launch of the year after racking up sales of almost £30m in seven months.

However, off-trade sales have fallen from £68.2m to £46.8m over the past year a 31.4% drop while volumes have slumped 36.9% [Nielsen 52w/e 19 March 2011]. In the previous 12-month period, value sales of the brand had soared 130.2% on the back of a 122.9% volume hike.

Data from promotions analysts Assosia shows the number of featured space deals on Stella 4% at the big four retailers and Waitrose dropped from 94 between 22 March 2009 and 14 March 2010 to 53 in the following 12-month period. Over the same period, the average promotional saving fell from £1.94 to £1.49.

Industry observers said the fall-off in promotional activity was to blame for the sales decline. "With all new brands there comes a time when support is reduced to see where the natural level sits and to assess the effectiveness of the launch," said one industry insider.

AB InBev admitted it had focused its 2010 promotional activity around Budweiser and its sponsorship of the World Cup.

However, it said a "heavyweight" focus on Stella 4% was planned for 2011, including TV and cinema advertising and the launch of "one of the biggest-ever consumer promotions for the beer category" this summer.

"Stella 4% is a product we are proud of, passionately believe in, and continue to drive forward with multimillion-pound investment," said AB InBev UK president Stuart Mac­Farlane, adding that its off-trade value was bigger than that of Heineken, Coors Light or Bulmers Original.

"To build a brand extension to such significant value in this ­period demonstrates our commitment to innovation and investing in our brands," he added.

Read more
Stella launches a cider? How very ‘reassuring’, say rivals (analysis; 5 February 2011)
‘Halo effect’ of 4% restores the shine to original Stella brand (15 August 2009)
Stella 4% launch 'most successful of past year' (23 May 2009)

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