The introduction of a new recipe saw SAB’s most popular beer Victoria Beer being overtaken by XXXX Gold, product of entrepreneurial Senji Miyake’s Kirin Holding Co. In a bid to win back its leading position in market, SAB introduced brand new packaging and offered several brewing variants. With no signs of improvement, SAB has now decided to revert back to the old recipe. SABMiller’s story echoes that of New Coke. New Coke was a new recipe formulated by Coca-Cola. However, the beverage giant ended up converting back to the original formula due to a negative public response.
The London based company has published advertisements in Australia’s most popular newspaper, Herald Sun apologising and accepting that they got it wrong. SABmiller’s acquired company Carlton & United Breweries will be in charge of changing back to the old recipe which was discontinued in 2007. The new recipe will have higher alcohol levels, from 4.6% to 4.9%. The beverage will go on sale starting October 2012.
SABMiller’s decision to increase alcohol levels will cost the firm more than A$10 million annually in the form of excise tax, However, the company says that the cost needs to be incurred in order to start re-selling the original flavour. It is an entrepreneurial risk that must be taken to win back market share.
John Roberts, a marketing professor from London Business School and Australian National University commented saying, “You can do almost anything you want with the taste, but in beverages you don’t mess with the brand image. People are doing more than drinking beer, they’re drinking the whole story.”
Several Vic Bitter consumers have said that SAB should not have changed their recipe and the company says they have now listened. With the original recipe on its way, SABMiller hopes that the sale of imported beers will go down and VB will once again gain its leading position.