Tennent Caledonian is one of the UK’s oldest brewers, with a heritage that stretches back across the centuries to the days of beer making in its very earliest forms. As far back as the 1550s, before Tennent’s opened for business, their archive shows that brewing was taking place at their Wellpark site in Glasgow on the banks of the Molendiner Burn.
The flagship brand has long been established as Scotland’s best-selling pint, first produced by Hugh Tennent. Tennent’s Lager is brewed to meticulously high standards, using exceptional ingredients and characterised by its clean taste and refreshingly crisp finish – best served ice cold. Having maintained its popularity in the face of changing tastes and fashions, Tennent’s Lager has also earned widespread acclaim for its staunch commitment to football and music in Scotland. (Tennent Caledonian, 2018).
The brand is synonymous with Scotland, as the brewery has sponsored numerous enterprises, the most famous of which is T in the Park, Scotland’s biggest and best music festival, held every summer in Kinross. They also sponsor the smaller T on the Green in Glasgow, and also the city’s two Old Firm rival football teams, Rangers and Celtic. (Discover Glasgow, 2018). Tennent’s have become a dominant lager brand due to the many event organisations that it hosts. Locally in Northern Ireland, Tennent’s Vital has become one of the most major music festivals which overly promotes its name excessively. The concerts have included many big names such as Red Hot Chilli Peppers and Avicii.
Main Body (e.g. Tennent’s chosen as PSO)
3.1 PESTEL Analysis of Tennent’s
The Political, Economic, Social and Demographic, Technological, Environmental and Legal (PESTEL) for Tennent’s are as follows:
Political Economic
- Government Policy
- Economic Growth
Social and Demographic Technological
- Lifestyle attitudes
- Use of Technology when producing
Environmental Legal
- Environmental friendly
- Price of Shares
3.1.1 Political Environment
Scotland’s largest brewer, Tennent’s, has backed the Scottish National Party’s government policy. Managing director Mike Lees said: “As Scotland’s leading brewer, Tennent’s recognises its duty to act responsibly and has always encouraged people to drink responsibly. We believe that, if implemented appropriately, minimum pricing could be part of the solution by increasing the price of alcohol, particularly of high strength products and is one way of addressing the alcohol abuse issues that we face in Scotland.” (Mintel, Alcohol purchasing in supermarkets – UK, Legislative Factors Affecting Supermarkets, 2010)
3.1.2 Economic Environment
In 2009 the C&C Group acquired the Tennent’s lager brand from Anheuser-Busch InBev in a deal worth £180 million. As a result of the deal C&C acquired the Irish, Northern Irish and Scottish businesses from Anheuser, which also includes the Wellpark Brewery, which is where the brand was originally founded in 1740. (Mintel, Beer and Cider – Ireland, 2012)
C&C, the Irish drinks group behind Tennent’s lager, has struck a 600m refinancing of its bank facilities which has given it increased financial firepower. The new facilities are with a syndicate of existing and new banks and include a five-year revolving credit facility of 450m and a three-year term loan of 150m.
Although sales volumes of Tennent’s were flat, they outperformed the wider total beer market that was down -2%. The group said its Tennent’s wholesale distribution business in Scotland, which includes a specialist wine arm, also performed strongly with customer numbers, volumes and revenues all posting gains. The contribution of Tennent’s along with a strong showing from its Magners cider brand helped C&C deliver annual results in line with analyst expectations, despite weather disruption across the sector. (Financial Services Monitor Worldwide – Tennent’s Owner in 600m banking deal, 2018)
3.1.3 Social Environment
Consumption of Tennent’s lager, brewed in Glasgow, served as an important means of expressing Scottish national identity from the 1960s. The role it came to play in the Scottish psyche ensured that this was no ordinary alcoholic beverage. It soon commanded more than half the lager market in Scotland, a dominance unrivalled among English breweries of lager south of the border. Given this ascendancy in Scotland, Tennent’s, consumed in pubs with males as patrons, became linked closely with masculinity. Cans of Tennent’s lager began featuring Scottish women in provocative poses from the late 1960s, much to the delight of male drinkers. In the marketing of this beverage, the brewery broadened the basis of Scottish national identity, which now became intertwined with Tennent’s lager, masculinity and, soon, football. Sponsorship of Scotland’s World Cup Football teams in the 1970s and later the Scottish Cup placed the brewer of Tennent’s lager in the forefront of how Scotsmen saw themselves and defined their Scottishness. (Sport in History – Tennent’s Lager, National Identity and Football in Scotland, 1960s–90s, Gutzke, 2013)
3.1.4 Technological Environment
With regard to the technology in producing Tennant’s lager, the essentials for beer production is water, malt, hops, yeast, finings and energy which can all be had from Scottish sources with the exception of hops and finings. The last decade has seen a massive increase in the area of barley grown in Scotland and along with this has gone a large increase in malting capacity, so that the supply situation for malt has been transformed. In addition, brewers commonly employ a certain amount of unmalted cereal adjuncts, e.g. barley, maize, wheat, and sugar to increase economically the strength of their worts. In cases where beer is meant to keep longer or travel further than the traditional ales, brewers use a variety of filter materials such as cellulose and kieselguhr, stabilizing aids such as PVPP and alginates, and in many modern plants industrial enzymes are used as remedial aids and as established items in the production schedules. None of these quantitatively minor materials seem to be produced by Scottish companies. (Royal Society of Edinburgh – The Brewering Industry – 1986)
3.1.5 Environmentally Environment
Tennent’s iconic red T has taken on a greener tinge as the wholesaler unveils a fleet of lower emission trucks across Scotland. The company has made a significant investment in the trucks, which operate Euro 6 Diesel engines helping reduce harmful pollutants, improve fuel economy and lower CO2 emissions as they travel thousands of miles up and down the country.
This commitment focuses on reductions in consumption of energy, water and other raw materials as well as waste going to landfill and greenhouse gas (GHG) emissions. Major obdurate investment in upgrading equipment and monitoring systems in the last year has seen improvements in electricity, gas and water usage per hector-litre of product produced at the Wellpark Brewery.
2016, has also seen Tennent’s achieve zero waste to landfill and receive a Silver Award for Environmental Excellence from charity organisation Keep Scotland Beautiful in recognition of improvements in environmental quality and reducing waste at the site. (Tennent’s Caledonian – Tennent’s invest in New Low Emission Truck, 2017)
3.1.6 Legal Environment
Tennant’s price shares dropped in 2015 because of the new alcohol limit which brought Scotland into line with most of Europe, but is lower than the 80mg in force in England (50mg of alcohol in 100ml of blood).
Police warned before the change was introduced that motorists could find themselves over the limit after only one glass of wine or one pint of beer.
This has hit the hospitality sector harder than the smoking ban, with some businesses reporting a drop in bar sales of up to 60 per cent.
Dublin-based C&C Group, which makes Tennent’s lager and Magners cider, said in an interim management statement that it had faced ‘challenges’ from the drink-drive rules and also from poor weather in Ireland and Scotland, particularly in May. It added that rural and community pubs had been ‘disproportionately affected’ by the new legislation. (Business Source Complete – Tennent’s lager brewer blames drink-drive law for sales slump, 2015)
3.2 SWOT Analysis of Tennent’s
3.2.1 Strengths of Tennent’s
Tennent’s has come a long way from cans of lager at a Scottish football match, they now produce stout, ale, cider and even gluten free beers. Tennent’s has been the leading lager is Scotland for a long time and they are now trying to increase their brand recognition throughout the world e.g. Ireland, Spain. Tennent’s is a highly recognisable brand in Scotland which is a major strength that allows sales to stay balanced. The business also has a wide range of excellent product designs which catches the eyes of consumers buying their products, such as the commemorative Euro 2016 Northern Ireland football pint glass that they produce, with fans purchasing the item and the beer. Also it gives the consumer a sense of allegiance to which they will continue to purchase from Tennant’s allowing them to reach into the Northern Ireland market and not just the Scottish market.
3.2.2 Weaknesses of Tennent’s
Additionally, Tennent’s has been associated with Scottish football which has decreased their brand reputation. Scottish football has also been associated with football hooliganism and most incidents that happen have alcohol involved. The brand ‘Tennent’s’ has been ranked 11th in draught lager by users in the U.K. This is a unsatisfactory position as the lager is number one in Scotland but overall it is underperforming in the U.K. (Leading brands of draught lager in the UK, Statista, 2015) Since the vote of BREXIT, sterling’s value has decreased which has had a major impact on Tennent’s due to the rate of currency exchanges. This has meant Tennent’s operating profit have decreased by up to ten percent lower than the previous year. (The Herald, Profits at Tennent’s owner hit by sterling weakness, 2017)
3.2.3 Opportunities of Tennent’s
However, Tennent’s have multiple opportunities within their market. Tennent’s has become a major name within the U.K and has tried to increase their brand name. A way they have increased their opportunities in the U.K market is through ‘Tennent’s Vital’. This event has been running for years in Northern Ireland to increase their brand recognition. Tennent’s sponsor the concert and has many popular music artists to play at their events, increasingly advertising their brand through their lager, billboards and online marketing. The brand has also been associated with the Irish Football Association to increase brand recognition. Tennent’s also sponsor Northern Ireland international football team which is a major opportunity as the team play worldwide increasing the recognition of Tennent’s sponsorship.
3.2.4 Threats of Tennent’s
A major predicament with Tennent’s is that the drink is being associated a lot more with underage drinking. Tennent’s sponsor many Scottish teams, for example they have previously sponsored Celtic and Rangers. This advertises alcohol to younger children who buy the football shirts. The sponsorship of these football teams have become very worrying in Scotland as it encourages underage drinking.
‘The Stirling University academics say this is “most likely” the result of Rangers and Celtic advertising an alcohol brand on their shirts. The Stirling research looked at 900 schoolchildren aged 12 or 13 from three high schools in the West of Scotland. They interviewed them again two years later. The team from the Institute for Social Marketing wanted to look at the link between alcohol advertising and when youngsters started to drink. A third admitted drinking at 12 or 13 and two-thirds had taken up alcohol by the age of 14 or 15. ‘ (The Scotsman – Lager adverts on Old Firm strips ‘linked to underage drinking’, 2010)
Recommendations
Tennent’s have a great marketing plan and are increasing ever so more to make their brand more recognisable in the coming 5 years within their market. They have become the biggest lager producers in Scotland but their plan is to become the biggest producer of lager in the U.K. Tennent’s over the last century has learnt to practice their highly regarded approaches to accomplish its target to be the best lager business within its market with heavy competition coming into the market each year for example from the local craft beer markets, which are considered more trendy by younger consumers of alcohol.
‘Tennent Caledonian, has announced a £1m investment into the state of art five star tourist attraction at Wellpark Visitor Centre in Glasgow’s East End. The enhanced visitor experience will bring to life Tennent’s 500 year heritage, telling the story of Tennent’s place in Scottish history, culture and sport, while promoting Tennent’s worldwide reputation as a Master Brewer of quality lager and ales’. (Tennent Caledonian – Tennent Caledonian Pours Million Pound Investment into Visitor Experience, 2016)
This states that Tennent’s is trying to interact with the consumer by showing people the history of the company by way of the visitor experience and it also allows the consumer to taste and enjoy a cold pint of lager.
In conclusion, Tennent’s is increasingly profiting in their marketing campaigns. They have many marketing strategies for their target markets worldwide, demonstrating their enterprising capability. The products and services available from Tennent’s are of high quality suppliers within the U.K. which overall fulfils customers’ needs and expectations. Tennent’s is a high reputable company and hopes to increase their brand name and logo in the coming 5 years demise Brexit within the U.K.
22.10.2018