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What went wrong with Steinlager?

Why we should be grateful to New Zealand’s finest

Vincent Heeringa

[Marketing]

Everyone’s got a Steinlager story. Here’s mine. In 1997 a wooden box arrived at work carrying two tall glasses and two bottles of Steinlager. “From New Zealand’s finest, to New Zealand’s finest,” the attached note said. I had just won a journalism award and someone at Lion must have noticed. The gift was a gimmick but I was flattered. Despite its hard and often hostile corporate façade, Lion had displayed a human touch.

I drank Steinlager for a while, too, out of gratitude.

Steinlager could have been great. Everything it did was pioneering. It was one of the first brands to capture the new wave of nationalism that one marketer now calls the Goldstein effect—the need for Kiwis, like adolescents, to be told by someone else that we’re okay. “They’re drinking our beer” expressed something profound that many others are now exploiting—and not half as well. It should be known as the Steinlager effect.

Steinlager was also one of the first non-agricultural brands to really gain traction as an export success. We forget how New Zealand was in the early 1980s—a closed, narrow economy driven by the commodity sector. ‘Brands’ weren’t in the parlance back then. But there was Steinlager on a billboard in Los Angeles in 1982. In 1983 it advertised in Playboy magazine. In 1984 it grew sales in the US by 60 percent, becoming one of biggest imported beers. The same year it reached $2 million in export revenues and had shipped a million gallons offshore.

Throughout the late 80s and early 90s it built on that story, winning numerous awards getting its green bottles into the 2,000-pub Bass Brewery chain in the UK. It was in the Superbowl in 1995.

They really were drinking our beer there.

Not any more. Steinlager plays second fiddle to Heineken domestically and shares the premium space with at least two other brands. Lion won’t tell us the latest export figures, but it’s fair to say things have gone flat on that front.

What went wrong? We go into much greater detail in our story on page 38 but, to me, it’s the beer of two halves. The first half represents the hokey passions of red-blooded men like Doug Myers and Richard Holden. Their entrepreneurial flair ensured the beer got into all the right places at just the right time. In 1984 Queensland Premier Joh Bjelke-Peterson banned New Zealand chocolate and beer, so Holden advertised Steinlager in Aussie as the “premier beer, not drunk by your average Joh”. The stunt generated huge media coverage. It’s just the sort of cheek you see 42 Below now using to get headlines in the US.

But something changed in the 1990s. Somehow Lion lost its bottle to back Steinlager. The change coincides with Lion’s aggressive acquisition strategy in Australia, its disastrous foray into China and eventual buyout by Kirin Breweries. In the process of all its corporate plays, Lion lost its dirty passion for getting our homemade brew into the world.

Which raises a very interesting challenge for Kiwi marketers. For all sorts of sensible reasons Steinlager shouldn’t have succeeded as it did. Paul Cooke, formerly the global marketing director for Stella Artois (and now a resident in New Zealand), says Steinlager has none of the attributes necessary for a global beer brand: it’s got the wrong name, it’s from the wrong country and it doesn’t even have a clever marketing campaign. “If I was in the boardroom when they were deciding about taking it global, I would have voted against it,” he says.

Steinlager got there despite all the sensible reasons. It got there through the true grit and flair of Kiwis too busy to know that they shouldn’t bother. That’s the same spirit that made us fly the first plane, conquer Everest and win the America’s Cup.

The lesson from Steinlager is this: true grit and entrepreneurial flair got the wrong beer to reach global fame. Imagine how successful we will be if we get the name right.