Investor Alert

April 5, 2011, 8:33 p.m. EDT

Branding Makeover for Carlsberg

By Flemming Emil Hansen And Sven Grundberg

COPENHAGEN—In an attempt to double the profits of its main brand by 2015, Danish beverages company Carlsberg A/S Tuesday said it would revamp the branding, ingredients and distribution of its Carlsberg lager, including a new range of packaging and a new slogan.

Carlsberg executives were bullish the move would drive an increase in sales, targeting drinkers with a new slogan: "That calls for a Carlsberg", which replaces "Probably the best lager in the world."

There's some risk inherent with altering a beer—the seventh biggest brand in the world, by volume—that has been brewed since 1847 and whose labeling has been virtually untouched since 1904. Corporate history is littered with expensive failed re-branding exercises, including Coca-Cola (NYS:KO) Co.'s 1985 New Coke fiasco and British Airways (LON:UK:IAG) ' u-turn on removing the Union Jack from the tail fins of its aircraft in the 1990s.

"This brand has so much potential, and we haven't been good enough at exploiting this potential," said Carlsberg Chief Executive Joergen Buhl Rasmussen . "Although international recognition is good, it is not enough. We want people to know that Carlsberg beer stands for something—or heritage, for quality, for great taste and for doing the right thing."

"It's the largest and most significant move by Carlsberg in my time at the company," said the executive, who has been at the helm since 2007 and with the company since 2006. "We have the company ambition to become the fastest growing brewer in the world, and this is a means of achieving that."

Mr. Rasmussen declined to say how much the revamp will cost and wouldn't give a sales target.

More View Carlsberg's New Bottle Designs

The Carlsberg brand is the brewer's best-known brand but sales of Carlsberg beer make up just 10% of the company's total sales. It markets about 500 brands in 140 markets, and makes most of its money selling local brews in individual markets. Carlsberg, along with its other premium brands like Tuborg, Kronenbourg and Elephant Beer, has only a moderate volume footprint in individual markets.

Carlsberg's brand logo, virtually untouched since it was designed by Danish Art Nouveau designer Thorvald Bindesboll in 1904, will retain much of the original design but has taken on a much brighter hue of green, while the writing has changed from gold to a gold-silver alloy color and the Danish Royal Crown has been simplified. It will also always now carry the Brewer's Star, the Hop Leaf and 'Copenhagen 1847' after the Danish capital where it was first brewed.

The new graphics will be rolled out across the more than 140 markets where the pilsner-style beer is sold. A bottle embossed with the Carlsberg name, already used in some markets, will become standard for all markets.

Carlsberg will also brew the beer with a new strain of barley developed by its own scientists. The Null-LOX barley will keep the beer fresher for longer and provides better foaming characteristics, Carlsberg claims. It will also be brewed using a new fast-acting yeast strain.

The Danish brewer—the world's fourth-largest by volume behind Anheuser-Busch Inbev (NYS:BUD) SA, SABMiller PLC and Heineken NV (AMS:NL:HEIA) — hopes the revamp will make its main brand a more "premium" product and pull in new customers, accelerating sales growth.

Carlsberg and Tuborg are Denmark's biggest selling beers, but first impressions on the streets of Copenhagen were mixed.

"The old one was more classic, traditional...a little old-fashioned. This is more youthful. I like it, but it addresses a younger target group. The new slogan may be a little bit too difficult for that target group," said Anders Hempel , 19, a self-employed IT entrepreneur.

"I think it looks like an orange juice bottle. It definitely appears more refreshing, and not at all like a pilsner brew. The slogan isn't that bad either, it's uses simple words that I think will work and be understood in a large part of the world," said Helena Holm, a children's clothing shop owner.

Graphic designer Bjoern Smalbro, 52, said: "It looks like a soda pop. I don't like it at all. It must be a misunderstanding. And 'That calls for a Carlsberg'—I don't believe it. A reward-slogan could work well, but the words don't fit well with Carlsberg. They're never gonna double their profit with this."

Write to Flemming Emil Hansen at Flemming.Hansen@dowjones.com

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