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 notorious brand management failures 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 and Combe sites were closed, and production was concentrated at the Watney brewery 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 £374 million in 2023 prices. Claude Watney (1867 – 1920) left a net estate valued at £498,461 (approx. £195 million in 2023).
Watney, Combe & Reid introduced the Red Barrel as their in-house trademark from 1930.
Watney, Combe & Reid became the first British brewer to introduce a draught “container beer” in 1931. Unlike traditional cask beer which would only remain fresh for days, container beer was filtered, pasteurised and stored under pressure with carbon dioxide, which allowed it to retain its condition for months. The beer could withstand tropical heat and a lengthy shipping period, which rendered it ideal for export. The product was to prove a success and was soon available in outlets where cask beer could not be sold, such as Royal Navy ships, Cunard liners and Middle Eastern oil fields.
Watney’s Container Bitter was introduced to the domestic market from 1935. It was initially sold at the East Sheen Lawn Tennis Club, where its improved shelf life was to prove ideal for the intermittent trade of a sports club. Sales were expanded to other clubs and hotels.
Watney’s Red Barrel is rolled out
Simon Harvey Combe (1903 – 1965) was appointed chairman of Watney, Combe & Reid in 1950. He was a forceful figure 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, and accounted for one third of beer sales by 1953. Catering to this trend, Watney’s Red Barrel was introduced as a bottled pale ale from 1950.
Meanwhile Watney, Combe & Reid began to expand outside of its London heartland. Tamplin & Sons of Brighton, with 400 public houses in Sussex, was acquired in 1953. Henty & Constable of Chichester, with 253 licensed premises in Sussex and Hampshire, was acquired in 1954.
Flowers of Luton and Stratford upon Avon became the first brewery to mass market container beer from May 1955. Named Flowers Keg, the brewery popularised the term “keg” as a genericized term. At first Flowers distributed the beer to free trade outlets across London and the South East of England with insufficient sales to stock cask beer, such as golf clubs and private parties, or public houses with insufficient cellar space. Demand for Flowers Keg was to prove surprisingly high, and the product 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 of Whitechapel 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 was the most widely-distributed keg beer by the late 1950s, aided by the brewery’s large tied estate of 3,670 public houses and extensive free trade accounts.
Watney Mann fights the takeover threat
Charles Clore (1904 – 1979) had become a pioneer of the hostile takeover in Britain in the early 1950s. He bought companies that had undervalued property assets, which he then sold and leased back, or redeveloped. Clore commented, “in some businesses the profits earned show that existing assets are not being employed in the fullest capacity… [no] business can afford to have its resources remaining stagnant.”
Clore attempted to acquire Watney Mann for £27 million in 1959, 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. According to TIME magazine, Clore was “the first outsider ever to challenge the clubby, clannish old families who dominate British brewing through a tangle of interlocking directorates”. 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 was convinced that Clore would “redevelop all the properties and close the breweries”, and that his workforce would lose their jobs. He 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 it became apparent that Watney Mann was not immune to the threat of market forces. The management team were galvanised. The company property portfolio was 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’s Red Barrel grows and cask ale is phased out
Watney Mann continued to expand by acquisition in order to meet demand for extra brewing capacity. 1960 saw the acquisition of Phipps, with 1,171 licensed premises within a 60-mile radius of Northampton, for £11 million, Ushers of Trowbridge with 900 licensed premises for £4 million and Wilson & Walker of Manchester, with around 1,124 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 heavily advertised, and was the highest-selling keg bitter in Britain by 1961, with estimated annual sales of around 150,000 barrels, mostly concentrated in the South of England and London.
The success of keg saw the introduction of rival beers from the national brewers, including Whitbread Tankard, Worthington E, Younger’s Tartan Special, Double Diamond 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 1963 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 the Morgan Brewery of Norwich (1961); Bullard & Sons and Steward & Patteson of Norwich (1963), with 1,800 public houses for £16.5 million; and Drybrough 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. Sales then entered into decline and fell behind rivals 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.
For Julian Crawshay (1923 – 2009), marketing director for Watney Mann, “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 new product which would appeal to the growing 18-35 demographic. Leo Burnett account manager Gordon Barrett emphasised, “the flow of continuity really had to be punctured quite severely”.
Watney’s Red was introduced in April 1971 following experimentation with 30 different recipes. It 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 product tasted “bland”. For writer Frank Baillie the beer was “well balanced … with a burnt malty characteristic”.
The product launch for Watney’s Red 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 sold in slightly higher volume. Around 350,000 barrels of Watney’s Red were produced in 1972, accounting for between 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 of London 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.
The Campaign for Real Ale (CAMRA) pressure group had been established in 1971. CAMRA rallied against the rise of keg beer, which it argued lost much of its 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 spokesman characterised CAMRA members as a “cranky bunch”, and cited market research that supposedly demonstrated that the public preferred keg beer.
Watney’s Red sales began to decline following a successful launch, and volumes remained stubbornly behind those of Double Diamond. The recipe was adjusted twice to increase ABV and original gravity in 1973. Richard Boston (1938 – 2006), a beer writer for The Guardian, derided the tactic as “desperate”, and argued that “Watney’s themselves are becoming uncomfortably aware that people don’t like their beer”.
A “word-of-mouth campaign [had] degenerated Watney and its products; a campaign that started as a whisper and built up to such a roar that some observers felt that the very existence of Watney as ‘a name’ was at stake”, wrote Kenneth Gooding of the Financial Times.
Why did Watney Mann become the target for the most virulent criticism from CAMRA? There is evidence to suggest that Watney beers really did taste worse than those of their competitors. The company brewed with a grist of up to 50 percent raw barley with added bacterial enzymes in an effort to lower production costs from 1971. The proportion of raw barley had been increased to up to 70 percent of the grist from 1973.* The beer was also subject to excessive pasteurisation, and according to John Keeling, who worked as a laboratory technician for Watney’s during the 1970s, was, “well oxidized by the time it reached four weeks, to be honest … the predominant flavour at shelf life was oxidized beer. But [Watney’s] didn’t seem to care about that, because they weren’t as interested in flavour.”**
Watney Mann responds
Concerned by criticism of the company, as well as by falling sales of its flagship beer, Watney Mann installed Anthony Tennant (1931 – 2011) as marketing and sales director in late 1973. Following a market research study Watney Mann acknowledged that the introduction of Watney’s Red had “backfired”. Marketing director Stephen Lewis explained, “people felt that we had over-rationalised our products after taking over smaller breweries”.
Watney Mann ended marketing support for Red from 1975, and Ben Truman Export Draught was offered as an alternative premium keg bitter. Double Diamond and Whitbread Tankard continued to lead in sales, and Watney’s Red had fallen behind Worthington E, Younger’s Tartan Special and Courage Tavern by 1976.
Watney’s introduced Fined Bitter, a cask beer served under pressure, to its London tied estate from early 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 a bid to rescue the company’s reputation local brands such as Tamplin’s, Usher’s and Wilson’s were revived, and greater autonomy was devolved to nine regional subsidiaries from September 1976. Scheduled brewery closures at Trowbridge and Halifax were reversed. Pub exteriors were now painted “varying shades of anything but red”, reported the Vancouver Sun. Efforts were made to reach out to CAMRA.
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”. Watney’s London Bitter, a traditional unpressurised cask bitter, was introduced from 1978. Plastic and chrome public house interior decoration began to be phased out in the late 1970s. New pub signs emphasised local and traditional beers.
Red is dead and the growth of cask
Watney’s Red was discontinued in May 1979 following years of low sales. For David Manasian of Management Today, the fate of the beer was “a constant warning to over-zealous marketing men in any industry who try to push traditional consumer tastes too far, too fast”.
Cask ale was sold across half of Watney’s tied estate by 1979. The company produced 14 different cask ales by 1980. Webster’s Yorkshire Bitter was introduced from 1982 and became the core cask ale brand. Pressurised cask beer had been phased out by 1983.
The Red Barrel corporate logo was discontinued in 1982. Watney’s Red Barrel continued to be produced for overseas markets, where the brand lacked the noxious reputation it had developed in Britain, including the United States and Belgium, where it had become the highest selling pale ale by 1984.
Grand Metropolitan acquired Ruddles Brewery of Rutland in order to increase its presence in the cask ale market for £14 million 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.
Watney Mann exits the brewing industry
The Belgian brewing interests were divested for £28 million in 1986. Drybrough, 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 remaining Watney’s branded products such as Special Bitter and Special Mild disappeared from Britain shortly thereafter. Watney’s Red remained available in Belgium, France and Spain into the early 1990s. Watney’s Red Barrel continued to be sold in the United States until the mid-1990s.
What remains of Watney Mann? Watney’s Scotch Ale survives in Belgium, and Mann’s Brown Ale remains available throughout Britain.
* ‘Production Scale Brewing Using High Proportions of Barley‘ by A H Button and J R Palmer (1973)
** Interview with John Keeling for BierTalk