Since moving from the US to take the top job at Interbrew in the UK and Ireland, Steve Cahillane has been having a spot of bother with doors.
“Every door in our house is a heavy fire door so they swing shut all the time, which is not good if you have little kids,” he complains to The Grocer in one of his first interviews with the UK press. “Plus, when my wife brings in laundry there’s always a door hitting her in the rear.”
Fortunately, when it comes to his professional life, he has encountered doors of the opening kind rather than those that slam shut. Now, with Interbrew in a winning position thanks to Stella Artois - one of the most significant brands in fmcg - Cahillane explains why he is determined to convince retailers as well as consumers that the beer stays “reassuringly expensive”.
Cahillane is every inch the workaholic New Yorker with his all-American family (his wife gave birth to their fourth child two weeks ago) and all-round optimistic spirit.
Seven weeks into his new job, he has just overseen production of the latest instalment of the brand’s ‘Reassuringly Expensive’ campaign. He likens his role in the creative process to that of the pompon-wielding icon of teenage life in the US. “In no way do I see myself interfering and saying ‘let me put my own stamp on Stella Artois advertising’ because it’s a great campaign.
“I see myself as the head cheerleader to ensure we continue to remember what gave us success in the past and not rework it but instead focus on brilliance of execution.”
Cahillane respects the mighty Interbrew marketing machine and you would expect him to after five years with the company, latterly as president of its Labatt arm in the US.
But when it comes to the thorny issue of supermarkets’ continued discounting of beer and ensuring Stella’s price tag lives up to its slogan, he drops the hyperbole.
“Way too much emphasis is put on price,” he says bluntly. “Stella Artois has so much going for it on an equity front and we want to see more attention focused on how everyone can get maximum brand value.
“We are in a very competitive retail environment and it would be easy for me to say, ‘this is my brand and I’d like you not to discount it’, but we can only do so much. I don’t have the answer yet.
“The winner is the consumer because of the deflationary pricing. Players in the industry have real challenges because it’s fiercely competitive and it’s not going to get any easier.”
Although rivals admit to knowing little about the Harvard graduate, Cahillane is switched on to their ambitions to steal the Stella Artois crown. However, wines and spirits are growing faster than beer and competition for Stella now comes not only in the shape of other beer brands but from other categories.
But Cahillane believes his brand is capable of a leadership role in the market. “Stella has an opportunity to play such a role in continuing to make beer even more special and appeal to people who would not otherwise be engaged in the beer category,” he says.
‘Engaging’ with beer has never been a problem for Cahillane. Starting out with a crew of 10 at wine giant E&J Gallo a decade ago, he recalls: “We were big beer consumers, we didn’t sit around drinking wine after work. I’m more comfortable in a beer culture.”
Nevertheless, it is a culture attracting a lot of bad publicity for binge drinking, bad behaviour and irresponsible advertising. Cahillane admits he has been surprised by “the amount of negative press surrounding beer”. But, he says, it is vital that beer manufacturers meet the challenge head on. “Plenty of case studies around the world show that if industries don’t sort themselves out governments come and help them sort themselves out and that’s not in anyone’s interests.” He says he is Quote unquote
“evaluating” whether Interbrew should adopt sensible drinking messages across its advertising as competitors, including Anheuser-Busch and Pernod Ricard, have done.
Cahillane is an optimist and remains upbeat about Interbrew’s trading prospects in a difficult environment. “We are in a much better position to exploit the strength of the lead brands. The challenge is getting it right and putting together a strategy that can do that.”
However, unlike several rivals, Interbrew will steer well clear of light and low carbohydrate beers. “In the US there is a vibrant light beer category. Michelob Ultra did a great job on its launch and one of the last jobs I had was introducing a low carbohydrate beer under the Rolling Rock line and that has a great chance.
“Here, it doesn’t seem nearly as clear to me that there is an opportunity for low calorie or low carbohydrate beer.”
Cahillane intends to focus on developing smaller brands, such as speciality beers including Leffe and Hoegaarden. “There’s a big opportunity to give people a wider experience in beer. We need to do a better job to get more consumers sampling and a stronger message out about their product attributes.”
Cahillane is still sizing up UK grocery. “It’s fascinating, with sophisticated, well- run companies working against each other. In the US there are many small players. The UK is a consolidated environment with companies going head to head.”
But he is confident he will find a way to swell market share: “Having a brand as powerful as Stella Artois gives opportunities to take your other brands, not necessarily along for the ride, but through doors that have been opened.”