Canada: Big Rock enters “value beers” market

Big Rock, Alberta’s premier craft beer maker, has a little secret. The Calgary-based brewer is renowned for its stable of premium products like Traditional Ale, Grasshopper and Warthog, distinct and tasty beverages, all carrying price tags like $11 or $12 per six, Edmonton Journal released July 28 (all figures in CA$).

Now, low-priced beverages like Alberta Genuine Draft and Bow Valley Lager have drifted onto store shelves, selling for as low as $5.99. These two discount, or “value beers,” as the brewing industry likes to call them, are also brewed by Big Rock.

Yet unlike other Big Rock brands that are promoted everywhere, especially in Edmonton during the summer festival season, Alberta Genuine Draft and Bow Valley Lager get no advertising boost. Bow Valley does not even have Big Rock’s name on the can.

“We put no marketing effort behind them at all,” says Ken Barbet, Big Rock’s president.

“We don’t want to confuse the consumer,” says Barbet. But Big Rock’s entry into what Barbet calls the “mainstream” beer market is a response to the 35 to 40 per cent of beer drinkers who prefer less expensive, non-premium beers.

Today, people want a wide range of choice with consumer goods of every kind and Big Rock wants to ensure that it is serving that market, Barbet said. “We recognized that other customers want us to produce these beers,” says Barbet, adding that Albertans are very cost-conscious.

Yet there have been no overt price wars in Alberta’s beer business, such as the one raging across Ontario since 2002. There, a number of micro breweries have sprung up in recent years, many catering to the discount market. Hamilton-based Lakeport Brewing, which does not sell into Alberta, tapped into Ontario beer drinkers’ sentiment with their “buck a beer” promotions and having the “lowest legal beer pricing” in the province, where prices are controlled.

In Alberta, market prices prevail, but there is a steady market for discount beers, says Labatt’s Neil Sweeney. Labatt brands like Busch and Club sell for less than premium brands like Kokanee and Budweiser.

“There is a segment of the population that is concerned more with value. The market has shown consumers quite clearly want a choice,” says Sweeney.

However, Sweeney does not see Alberta becoming the discount-beer battleground that Ontario is.

“Alberta was the leader, we’ve had less expensive beer in Alberta for years. It’s nothing new.” Business writer Paul Marck will have a full report on beer marketing in Saturday’s Journal.

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