Susan Gordon, Business Reporter
Lascelles Wines and Spirits has began rolling out its new beer Kingston 62, which is brewed and bottled under partnership with Big City Brewing. Kingston 62 is Lascelles' virgin beer product. - Andrew Smith/Photography Editor
Lascelles Wines and Spirits (LWS) has already invested $30 million to roll out its new brew, Kingston Beer 62, but said Wednesday that was only a fraction of its planned spend on marketing in
a signal that it would be moving aggressively to grab a share of the $6.5 billion local tippler's market.
But the Lascelles deMercado group subsidiary also plans
to export eventually, with projections that the new product can boost Lascelles spirits business by 20 per cent.
The company appears to be hunting beer sales of almost $2 billion, given that Lascelles' spirits segment in its nine month results to June 2006 stood at $9.6 billion.
Introduction
Lascelles introduced Kingston Beer 62 two weeks ago to the Jamaican retail market after it contracted Beverley Lopez's Big City Brewing to manufacture and bottle the brew.
Big City puts out its own product, Real Rock. But it is Lascelles' virgin entry into the market.
LWS general manager for marketing Andrew Desnoes, speaking with the Financial Gleaner Wednesday night at a tasting of Kingston Beer 62 - a fairly smooth brew with 4.7 per cent alcoholic content - was confident however that Lascelles could scoop up market share, saying it was related business and not entirely unknown territory.
"We had the experience by being in the spirit market," said Desnoes.
LWS currently distributes premium wines and spirits, including the Edwin Charley range of rums, Sangsters Jamaica Rum Cream, Hardy Australian Wines, and the Gallo family of wines.
Ironically, the name Desnoes is more associated with Red Stripe - which formerly operated as Desnoes and Geddes Limited before it was sold to Diageo - the chief beer maker, and dominant player.
Part of Lascelles market entry strategy centres on price and, it would seem, product recognition.
Kingston Beer is on the shelf at MegaMart for just under $60, while Red Stripe sells for $75 to $80.
The Lascelles beer has a look similar to Heinekin, a foreign brand distributed locally by Red Stripe that sells at a comparable price to Red Stripe beer.
Right timing
Lascelles' market entry comes at a time when beer sales are depressed and export volumes, at best, are flat, but Desnoes says the timing was right.
"It's a huge opportunity to go into that market," he said, adding that even a minor share of $6.5 billion was worth the effort.
The labelling which reads 'Rebel libations crafted on the Rock' and 'True rude Jamaican beer', suggests that the brew is targeted at brash non-conformists - in other words, the youth market.
Desnoes says the plan is to go after new market, meaning it has no plan now to go head-to-head with Red Stripe.
"We are not trying to go after the existing beer market. We look to make an impression on the market, we look to expand the beer market," said the Lascelles executive.
"The beer market has been slightly declining and there is no real reason for this. It just needs new brands to give life to it."
He said beer has the similar type consumers and customers who do business with the spirits division of Lascelles.
Outlining the nature of the partnership with Big City Brewing Desnoes said the brewery "had spare capacity at the plant so we contracted them to manufacture the beer. It's our formula; they brewed it based on our specifications and created the liquid."
The labels are supplied to Big City by Lascelles, said Desnoes.
The wine and spirit company has given itself two years to establish its beer locally, before launching in North America and Europe, saying it was prepared to make the investment.
"We will put in as much as we can," said Desnoes.
He refused comment on the full investment in Kingston Beer but said the $30 million was preli-minary expenditure channelled into market research and testing.
The beer is brewed in the tradition of Pilsner beer.
- susan.smith@gleanerjm.com
