Denmark's second largest brewer, the Danish Brewery Group, last week announced a major restructuring plan which it claimed would result in improved profitability as early as 2004. At the heart of this plan is the decision to turn its Royal beer brand into a major national brand.
Creating a strong, national brand out of Royal will be relatively easy, according to Leif Rasmussen, sales and marketing director at DBG. "Some 70 per cent of all Danes know Royal - and by far the majority of Danes who have tasted it prefer it to other types of strong beer," he claimed.
"Royal has achieved a remarkably high level of awareness even though we have not previously conducted major, national advertising campaigns for the brand. We expect to achieve a market share in Denmark of at least 20 per cent this year alone."
The brand, which is also known as Ceres Royal, will now be brewed at three DBG breweries at Denmark - Ceres itself, plus Albani and Faxe.
Royal will be marketed in bottles and cans, as well as on draught, and DBG said it would continue to look at the possibility of launching new variants under the Royal brand. "New variants are ready, but we will perform a number of tests at various restaurants throughout Denmark before we launch a general marketing campaign," said Rasmussen.
But the upgrading of Royal to national brand status is just one part of the DBG restructuring plan. Another major element will be the extension of the company's distribution agreement with Heineken, the Dutch brewing group. DBG already distributes Heineken's beer in cans, but will now also sell it in bottles and kegs.
DBG said that the agreement would give it a considerable competitive advantage, as Heineken's brands supplement the group's own products and will work as a 'door opener' for outlets where DBG's own beer and soft drink brands are not currently distributed.
The company's strategic plan, called V8, is based on eight strategic aims, including the Royal and Heineken moves. These include the closure of the Randers brewery, increased marketing both nationally and internationally, increased focus on innovation and product development, staff development, optimising the use of resources and a new focus on key markets.
"All things considered, we anticipate satisfactory developments over the next five years. The potential within the group is considerable - both in terms of savings, efficiency and earnings. Against this background, we are not afraid to be optimistic," said Poul Møller, managing director of DBG.