Watney’s Red Barrel was the highest-selling keg bitter in the world by the mid-1960s. The beer’s relaunch as Watney’s Red in 1971 represents one of the most famous failures of brand management in recent British history. What went wrong?
The birth of Watney’s Red Barrel
Watney, Combe & Reid was formed by the amalgamation of three London breweries in 1898. The Reid brewery in Clerkenwell and the Combe site in Long Acre were closed, and production was concentrated at the Watney facility at Mortlake. It was the second largest brewing business in the world.
Watney Combe & Reid was highly profitable. When Charles Combe (1837 – 1920) died he left a net estate valued at £956,139, or over £350 million in 2020 prices. Claude Watney (1867 – 1920) left a net estate valued at £498,461.
Watney, Combe & Reid had begun to pasteurise at least some of their bottled beers by the 1920s in order to improve shelf life. A large new pasteuriser was imported from Bernsdorf in Germany in 1930.
Watney, Combe & Reid introduced the Red Barrel as their in-house trademark from 1930.
Watney, Combe & Reid was the first British brewer to introduce a draught “container beer” in 1931. The product differed from traditional cask beer as it was filtered, pasteurised and stored under pressure with carbon dioxide. The keeping conditions of the beer meant that it was able to withstand tropical heat and a lengthy shipping period, which rendered it ideal for export. The product was to prove a success and was soon found on Royal Navy ships, Cunard liners and Middle Eastern oil fields.
Watney’s Container Beer was introduced to the domestic market from 1935. It was initially sold at the East Sheen Lawn Tennis Club, where its keeping properties proved ideal for the intermittent trade of a sports club. Sales were expanded to other club outlets where it was impractical to serve cask beer.
Watney’s Red Barrel is rolled out
Simon Harvey Combe (1903 – 1965) was appointed chairman of Watney, Combe & Reid in 1948. He was a forceful and picturesque man who had shot his way out of German captivity during the Second World War and been awarded with the Military Cross.
Following the war a large proportion of the managers of free houses had neither the time nor the experience to correctly handle cask beer, and quality had suffered. Customers increasingly turned to bottled beer, which, although more expensive, offered more consistent quality. Catering to this trend, Watney’s Red Barrel was introduced to public houses as a premium-priced bottled pale ale from 1950. Bottled beer accounted for one third of British beer sales by 1953.
Tamplin & Sons of Brighton was acquired in 1953. The purchase brought with it 400 public houses in Sussex.
Flowers Breweries became the first brewery to mass market container beer from 1955. Named Flowers Keg, the brewery popularised the term “keg” as a generic name for container beer. At first Flowers distributed the beer to free trade outlets with insufficient sales to stock cask beer, such as golf clubs and private parties, or public houses with insufficient cellar space. Demand for the beer was to prove high however, and Flowers Keg was soon distributed across the brewery’s tied estate and sold to rival brewers.
Watney, Combe & Reid introduced the keg version of Red Barrel to British public houses from 1956. It was brewed with Norfolk malt and Goldings hops, and was naturally matured for several weeks. Sales initially targeted free trade outlets, and cask beer continued to dominate the tied estate.
Watney, Combe & Reid acquired Mann, Crossman & Paulin to form Watney Mann in 1958. The merger allowed the group to reclaim its position as one of the largest brewers in Britain, and strengthened Watney’s position in hitherto underrepresented markets such as Essex, Luton and Coventry. Production was concentrated at the Mortlake and Whitechapel breweries, which were modernised.
Watney’s Red Barrel that was the most widely-distributed keg beer by the late 1950s.
Watney Mann fights the takeover threat
Charles Clore (1904 – 1979) launched a hostile takeover bid for Watney Mann in 1959. He valued the company at £27 million in what was the largest takeover bid in British history. Clore planned to modernise the “smoky, smelly, barnlike premises” of Watney Mann by introducing comfortable seating, removing the distinction between saloon and public bars, and improving the food offering. Pubs in areas with high footfall, such as city centres, would be sold off and converted into shops.
The directors of Watney Mann, descendants of the founding families, were horrified. The Evening Standard commented on the threat: “it threw the whole brewery world into confusion. Here was an outsider trying to storm his way in. It must not be allowed to happen”. Simon Combe derided the bid as, “preposterous … deplorable for the brewing industry and a disaster for Watney’s”.
The takeover attempt was to ultimately prove unsuccessful, but the Watney Mann management team were galvanised. Watney Mann’s properties were reassessed for the first time since 1929 and valued at £34 million. The Stag brewery site at Pimlico was sold off for £6 million. Watney sped up plans to modernise its tied estate of public houses, and Milner Gray (1899 – 1997) was hired to design a new corporate identity.
Watney Mann continued to expand by acquisition in order to meet demand for extra brewing capacity. 1960 saw the acquisition of Phipps of Northampton with 1,171 licensed premises for £11 million, Ushers of Trowbridge for £4 million and Wilson & Walker of Manchester, with around 1,000 public houses, for nearly £11.5 million. Watney Mann ended the year as the largest brewing group in Britain, with around 6,600 licensed premises.
Keg beer sales grew, initially at the expense of bottled beers. Customers, particularly the young, appreciated the consistent taste, and it commanded a premium price and superior profit margins. Watney’s Red Barrel was marketed heavily, and was the highest-selling keg bitter in Britain by 1961, with a category share of around 20 percent and estimated sales of around 150,000 barrels.
The success of keg saw the introduction of rival beers from the national brewers in the early 1960s, including Double Diamond, Whitbread Tankard, Worthington E and Courage Tavern.
Watney Mann had 34,000 free trade accounts by 1963. Cask beer had been phased out from the 2,000 tied houses in London and the South of England by the end of 1963, and the Manchester and West Country houses were earmarked to follow.
Watney’s Red Barrel was successfully introduced overseas. A higher strength version with an ABV of 5.2 percent was exported to northern France and Belgium from 1962. Nearly 5,000 barrels of Red Barrel were exported to Northern Europe in 1965. A modified version of Watney’s Red Barrel, reformulated to suit the American palate, was introduced in the United States from around 1964 and was sold in 100 outlets by 1967. Licensed production of Red Barrel commenced at the Murphy’s brewery in Cork, Ireland, from 1966.
It was claimed that Watney’s Red Barrel was the highest-selling keg beer in the world by 1966. Peter Crossman (1908 – 1989), who had succeeded Simon Combe as chairman of Watney Mann, predicted that cask beer would be extinct by 1978.
Watney Mann continued to expand by acquisitions throughout the 1960s. The takeover targets included Morgans Brewery of Norwich (1961); Bullard & Sons and Steward & Patteson of Norwich (1963), with 1,800 public houses for £16.5 million; and Drybroughs of Edinburgh (1965), with 140 tied houses, for £2 million.
Peter Crossman became convinced that the British beer market was saturated, and decided to expand into continental Europe. The Delbruyers brewery of Chatelet was acquired in 1966 and the site was used to brew Watney’s Red Barrel. This was followed by the acquisition of Brasseries Vandenheuvel of Brussels with 1,740 outlets (1968) and Maes with 700 outlets (1969) to position Watney Mann as the second largest brewer in Belgium.
Watney Mann announced plans to centralise production at its breweries in Mortlake, Manchester, Norwich and Edinburgh in 1970. The Trowbridge, Whitechapel and Brighton breweries would be closed. Production of cask ales had largely ceased by this time, and local names would be phased out in favour of the Watney brand. A range of 80 beers in 1969 had been rationalised to 35 by 1971.
Watney’s Red is introduced
Watney’s Red Barrel volumes peaked in 1969, and then entered into decline. Sales had fallen behind Double Diamond and Whitbread Tankard. Double Diamond offered greater consistency than Red Barrel, as it was only brewed in one place: Burton upon Trent, and it was believed that its sweeter taste and higher strength rendered it more appealing. Meanwhile it was claimed that Red Barrel suffered from inferior marketing.
Julian Crawshay (1923 – 2009), the marketing director for Watney Mann, declared that “a beer developed for the 1950s is not right for the 1970s”. A spokesman for Leo Burnett, the Watney Mann advertising agency, described Red Barrel as “a golf club beer, all bitter and sharp”. Watney’s Red Barrel would be replaced by a completely new product which would appeal to the 18-35 demographic. Leo Burnett account manager Gordon Barrett emphasised, “the flow of continuity really had to be punctured quite severely”.
Following experimentation with 30 different recipes, Watney’s Red was introduced in April 1971. The new product was a “completely different beer”, crafted to be darker, fizzier and slightly sweeter. It was smooth with a creamy head and good lacing. It was designed as a session beer, with greater drinkability and less of an aftertaste. Crawshay explained, “we were looking for the customer who settles in his local pub and drinks eight or ten pints in an evening”. The Economist reported that the new beer tasted “bland”.
The Watney’s Red product launch was supported by a £500,000 television and poster campaign. Controversially, portrayals of Castro, Khrushchev and Mao were used alongside with the tagline, “long live the Watney’s Red revolution”. Cowl conversion on 30,000 Red Barrel keg dispensers cost a further £100,000. Pub interiors and exteriors were painted red in order to promote the new beer.
Watney’s Red initially enjoyed a 15 percent sales boost against Red Barrel, and was the brewery’s most profitable beer, although Watney’s Special Bitter enjoyed slightly higher sales . Around 350,000 barrels of Watney’s Red were sold in 1972, accounting for around 20 to 25 percent of Watney Mann sales.
The public backlash
Watney Mann was subject to a hostile takeover by Grand Metropolitan, the owner of Truman’s Brewery and a host of hospitality concerns, for £405 million in 1972. At the time it represented the largest takeover in British history. The acquisition placed Grand Metropolitan in control of over one third of London’s public houses.
In an effort to lower production costs Watney Mann began to brew using a grist of up to 50 percent raw barley with added bacterial enzymes from 1971. The proportion of raw barley was increased to up to 70 percent of the grist from 1973.
Following a successful launch, the sales of Watney’s Red began to decline, and volumes remained stubbornly behind those of Double Diamond. The recipe was adjusted twice to increase ABV and original gravity in 1973, a tactic that Richard Boston (1938 – 2006), a beer writer for The Guardian, derided as “desperate”. Boston argued that “Watney’s themselves are becoming uncomfortably aware that people don’t like their beer”.
Meanwhile, the Campaign for Real Ale (CAMRA) pressure group had been established in 1971. CAMRA rallied against keg beers, which it argued lost much of their flavour due to the process of filtration and pasteurisation. Robert B Semple Jr of the New York Times reported:
Public Enemy Number One for CAMRA is Watney’s, in part because the standardized exterior of a Watney pub, with its bright red background and white lettering, seems to CAMRA to typify the kind of corporate thinking that produces the homogenized beer sold within.
A Watney Mann official dismissed CAMRA members as a “cranky bunch”, and cited market research that supposedly demonstrated that the public preferred keg beer.
A change of course for Watney Mann
Concerned by criticism of the company, as well as by falling sales of Watney’s Red, management conducted a market research study in mid-1974. Watney Mann acknowledged that the introduction of Watney’s Red had “backfired”. Meanwhile, “people felt that we had over-rationalised our products after taking over smaller breweries”, explained marketing director Stephen Lewis.
In a bid to rescue the company’s reputation, greater autonomy was devolved to nine regional subsidiaries, and local beers began to be promoted. Scheduled brewery closures at Trowbridge and Halifax were reversed. Discontinued local brands such as Tamplins were revived, and efforts were made to reach out to CAMRA.
Ben Truman Export was introduced alongside Watney’s Red to function as a premium keg bitter.
Watney’s introduced Fined Bitter, a cask beer served under pressure, to its London tied estate from 1976. A Watney’s spokesman commented, “this is a commercial move, not a labour of love. There is now a demand for traditional beers and we are climbing aboard the bandwagon”. The beer was later renamed Stag.
In 1977 a Watney’s spokesman admitted, “we used to think it was good to be big. Today we think it’s good to be small”. Plastic and chrome public house decor began to be phased out in the late 1970s. Pub exteriors were now painted “varying shades of anything but red”, reported the Vancouver Sun. New pub signs emphasised local and traditional beers.
Watney’s London Bitter, a traditional unpressurised cask bitter, was introduced from 1978.
Watney’s Red was discontinued in May 1979. Half of Watney’s tied estate sold cask ale.
14 different cask ales were produced by Watney breweries across Britain by 1980. Webster’s Yorkshire Bitter, usually in cask format, became the core ale brand for Grand Metropolitan from 1982.
The Red Barrel logo was discontinued in 1982.
In a major change in strategy, Grand Metropolitan acquired Ruddles Brewery of Rutland for £14 million in order to increase its presence in the cask ale market in 1986. The brewery received a £5 million investment in order to double output, and a further £1 million was spent on advertising the brand.
The Belgian brewing interests were divested for £28 million in 1986. Drybroughs, with 187 public houses, was sold to Allied Lyons for £48.5 million in 1987.
Grand Metropolitan sold its brewing interests to Courage for £316 million in 1991. The Watney’s brand disappeared from Britain shortly thereafter. Watney’s Red remained available in Belgium, France and Spain into the early 1990s. The Watney name survives as a brand of Scotch Ale that is still sold in Belgium. Mann’s Brown Ale remains available throughout Britain.