Despite being released on tap just two days before COVID lockdowns started in March, Lion says XXXX Dry has exceeded initial sales expectations.
XXXX brand director Amy Darvill told Brews News that the first new beer launched under the XXXX master brand since the 2015 launch of the now deleted XXXX Pale Ale is tracking at more than double its original volume targets.
“It has been incredibly warmly received by Queenslanders, so we’ve sold over 100,000 cartons of XXXX Dry since we launched a few months ago,” Darvill said.
The company was very pleased with the key tracking metrics they monitor, she said.
“We’ve had the highest trial rate of any beer NPD [new product development] in the last three years in Queensland.
“We know that we’ve achieved the highest prompted awareness in the last five years at that three month mark, so over 35 per cent of Queenslanders are now aware of this product, which is the highest out of any new product over the last five years in that particular state.
“And I guess even more impressive that tap has really only just started to come back in the last little while.
“We’re available at around 500 venues now, but that’s obviously only just started to kick in over the last month or so.”
Darvill also said the purchasing behaviour has also shown confidence in the XXXX brand itself.
“Based on consumer behavior, they tend to be purchasing cartons over six-packs. With a new product, you don’t know what it’s gonna taste like, whether you’ll like it or not, so you tend to err on trialing with a six-pack format,” she said.
“We’re already selling towards 80 per cent of our total volume through cartons versus six-packs, which is wonderful.”
“And it’s attracting new and younger drinkers to the XXXX trademark, which is, from a strategy point of view, really important to us.”
Darvill said novelty may, in part, explain the younger audience.
“I would guess that, first of all, you walk into your local bottle shop and there’s something that does look quite distinctive and relevant of the moment from a design perspective, especially the cans, which have just hit market,” she said.
“NPD does tend to get adopted more quickly by a younger consumer, the trick is then in keeping them buying rather than just trying it because it’s new.”
Kegs of the new beer rolled out days before pubs had their numbers reduced and then went into lockdown forcing a rapid change in launch strategy.
“Our whole plan had been around using the local pub as a way to get Queenslanders to try this beer, but that all of a sudden wasn’t available to us,” Darvill said.
“It was an absolute credit to our sales team and the relationships they’ve got with the wonderful customers we have up in Queensland, that we quickly pivoted.
“It was a case of ‘okay, how do we make our pack beer, our bottle format, very quickly available, and supported very, very quickly?'”
Attracting or cannibalising?
Darvill said Dry is cannibalising some share from its stable mates, but gaining greater growth from competitors.
“It is cannibalising some from XXXX Gold and Summer Bright Lager, but pleasingly to a much lesser extent than we would expect, given their size in the market,” she said.
“We have switching data which can tell us where we’re sourcing volume from, and the good news for this product is that it is sourcing its volume from competitors at a much more significant rate than from either Gold or Summer Bright Lager.”
“Our goal is to make the XXXX master brand as big and strong as possible, and when you bring out any new product within a master brand you know that you’re likely to cannibalize some of the existing brands’ sales, but the objective is to grow the pie, to make it larger.
XXXX vs Great Northern
“Great Northern have recently taken the number one mantle in Queensland through IRI volume. It’s a very small gap, I will admit, but they’ve taken that number one spot,” she said.
“I mean, lots of it has been said about this battle, but the number one spot can be defined in a few ways.
“Obviously it can be defined from a volume perspective or it can be defined by what consumers feel about a brand, and through our tracking, we know that the number one brand, in terms of awareness and appeal, so how consumers feel about a brand, is still XXXX.
“We’re certainly not gonna rest on our laurels, and we want that number one spot back,” Darvill stressed.
“This XXXX Dry release is but one part of the strategy to regain our dominance, not just in Queensland, but more broadly across Australia.”
Mainstream cans may be boosted by craft
Darvill said the launch should be boosted by the launch of XXXX Dry in cans, and the traditional mainstream package may even be getting a boost from the craft trend.
“Queensland does over-index in cans, so there are lifestyle-related factors in needing a non-breakable product for when you’re out and about,” she said.
“But there has been a shift, probably over the last five years.
“I think what the great thing that the craft’s design around cans has done is, it’s made it completely acceptable and removed any of the very traditional feelings about a can beer drinker.
“It’s no longer seen as ‘bogan’, or something that your dad or your grandpa did, it’s just a great format to drink beer out of for a variety of reasons.
“It was very interesting when we were first talking to customers, to our retailers, about XXXX Dry, the first question we were always asked was ‘when are you bringing it out in a can?'”