Red Stripe adds flavour, promises to re-energise brand

The new man in charge of the brewery and beverage company, Brazilian Renato Gonzalez, who was facing minority owners for the first time at Friday's annual general meeting, said he plans to strengthen the business and its profits by re-energising the brand.

Gonzalez took over as managing director from Alan Barnes on July 1.

"This year into next, we are going to have many new products, new flavours — something more novel that we are bringing to the market — to bring a spirit of renewing and re-energising the brands," he said on Friday.

"We want Red Stripe to become vibrant again," he said.

The company added two flavours to its Red Stripe Light brand — apple and ginger — in October. A third flavour, lime, is to hit the market by December.

While he did not disclose the details, Gonzalez said other innovations are being contemplated. He also plans to invest more in advertising and marketing.

Gonzalez, in his short four months at the helm, has demonstrated that he is not afraid to shake things up.

While, the plans were already in train before he took charge, the proposal to shift production of about 3.5 million cases of beer overseas was finalised and announced under his watch.

A new Red Stripe beer campaign incorporating a bear in a 'Mission Impawsible' has been mocked by some but has got everyone talking.

"We are going to continue investing in the brand, new campaign, and much more to generate a good conversation and connection with the consumers again," he said. "We want Red Stripe to be back on the lips of grass-roots people."

A beer company typically spends 11-12 per cent of sales revenue on marketing, according to Gonzalez, who says he is prepared to up that investment if he can squeeze savings elsewhere in Red Stripe's operation.

His three-pronged strategy, as he told shareholders, is driving efficiencies 'end to end', brand value and export growth.

Exports are profitable in all of Red Stripe's markets, except for the United States.

"This year we start to fix it," he said.

"Our target is to increase market share this year in an environment where alcoholic servings have decreased by 37 per cent since April 2010. An ambitious target in a continuing challenging economic environment but one that we are committed to achieving," he stated.

Starting next year, beer sold to North America will be produced in Philadelphia. The shift will cut about 70 jobs, but will mean $2 million to $3 million more profit for the company, according to Gonzalez.

Red Stripe is a $13 billion company by revenue. The company made profit of $1 billion or 36 cents per share at yearend June 2011, up 28 per cent year on year.

Profits for the quarter ending September was up 10 per cent at 4.47 cents per share.

Red Stripe on Friday announced a dividend distribution of 20 cents per share for a payout of $562 million to shareholders to be paid December 28.

The stock traded at a 52-high Friday, up eight cents to $4.60 per share, valuing the company at $12.9 billion.

sabrina.gordon@gleanerjm.com