Alan Barnes, managing director of Red Stripe, holds aloft the JMA trophy for Best Manufacturer 2008, last month. - File

FACED WITH a nearly saturated domestic market for beer, local brewer Desnoes and Geddes Limited, trading as Red Stripe, is looking to innovations in product and packaging to compete with all companies that are vying for scarce disposable income from Jamaicans, even as it pushes aggressively to open new frontiers in nearly every continent of the world. Driving the two-pronged strategy is new head of the more than 80-year-old listed firm, Alan Barnes, a well-travelled Englishman with a passion for selling beer.

Only three months into the job as Red Stripe's managing director, and as commercial director for Latin America and the Caribbean for global alcoholic beverage giant, Diageo Plc, the Nottingham University economics graduate has had to quickly devise a strategy to wring more value for shareholders out of a tight local market.

At the same time, growth for the company, which made $1.5 billion in net profit from $13.4 billion last year, is firmly hitched to the prospect of a more fertile foreign market environment.

"The domestic business is very tough," Barnes told the Financial Gleaner.

"We don't view ourselves as competing in the local beer business of which we have 98 per cent of the market."

Aiming for a bigger share

For Barnes, Red Stripe is in competition with any business that is seeking to take disposable income from consumers' pockets.

"The alcoholic beverage market is fixed. Getting hold of a bigger share of that is our plan," he said. At the same time, "We have increased resources going into exports to increase our potential there."

The salesman who spent several years in Israel, Egypt, South Africa and several countries in West Africa, where he sold beer, says he has a lot of respect for Red Stripe's many competitors. He is constantly looking at how they operate and learning from the successes of their brands.

Barnes stepped into a domestic situation made worse for Red Stripe by the Government increase in the special consumption tax on all alcoholic beverages, except white rum.

In May, a single rate of 25 per cent replaced a 16-21 per cent rate on beer and 24-30 per cent on spirits, a move which netted $2 billion for the cash-strapped Treasury.

While describing the move as a major blow to his business, Barnes says Red Stripe has been tackling the economic situation with innovation.

Maintaining that the company had not previously been innovative enough, Barnes is on record as demanding a new product, package or promotional ideas from his people at least once every three months.

Sprucing up the brand

Red Stripe Beer

Validating the stance of the company's board, following the exit of former Managing Director Mark McKenzie, that it was time to "freshen up" the leadership of the business, Barnes says his team has started with sprucing up the look of the existing Red Stripe brands, including the packaging of the premium lager, Red Stripe Light, the recently launched Red Stripe Bold, Guinness and Malta.

"Innovation: we haven't been doing enough of that," he said.

The new Red Stripe Bold product has been the first big innovation under his watch. A dedicated innovation team has also been out in place.

Portfolio expansion has been part of Barnes' game plan and a range of Diageo's worldwide and specialty brands are being introduced to the Jamaican market.

The Guatemalan Zacapa Centenario deluxe rum, Johnnie Walker Reserve and Ciroc vodka were recently unveiled here.

Meanwhile Red Stripe is leveraging the Diageo's global footprint to grow exports. The managing director said this was a distinct advantage of being part of a global company.

"Nothing gives us pride as seeing our exports growing. To be big 'a yard' and making a successful footprint abroad is fantastic. We are making sure that we win in every battleground."

Europe, Asia, North America, Central and South America have been identified by Barnes, who declined to be specific about the countries involved in the renewed global push.

"We will look for opportunities in emerging markets - Brazil, Russia, India and China are current examples of markets we are building now to drive growth tomor-row," said the Diageo website.

Red Stripe is said to be at varying stages of discussions to enter these and expand other markets, such as the Caribbean and the United States, with beer brands, Dra-gon Stout and Guinness.

"We grew in exports last year and our financial position would have been very different if not for that export growth. Exports have been a great success for us."

As for the structures Red Stripe will use to launch into new parts of the world, Barnes has stated a preference for direct sales of the Jamaican brewed product with all the marketing of the Jamaican brand that entails. But he is also aware that distribution costs might dictate that partnerships, franchises and other arrangements be considered.

With minimal staff and structural changes since taking over, efficiency is said to be at a high at Red Stripe. As a result, cost reductions do not now factor significantly in the company's operational and financial plans.

"We have had a lot of focus here on our cost model. We are running a very efficient operation."

Building management team

The company is said to be busy building its team, numbering 725 employees.

"Everything will fall into place once you build the management capabilities of people - make sure they have the tools, the financial resources, the processes," said Barnes.

Red Stripe's leadership team now includes a change manager responsible for driving new transformational thinking in the organisation. It also now has a regional structure with executives managing their areas in Jamaica as well as the Caribbean and Latin America.

With a stated huge passion for Jamaica and the beer business, Barnes said he jumped at the idea of taking up the Jamaican post having sold beer in scores of Africans countries for 13 years. During that time, he said, he was exposed to Jamaican music.

Voted Diageo's motivational leader in its worldwide operations for last year, Barnes is on a mission to re-energise the Jamaica business, and in the process, take Red Stripe's brands to the world.

In executing that vision, he is also proud that the Jamaican team recently copped another Diageo award for the best finance team.

Five awards bestowed on Red Stripe at the recent Jamaica Manufacturers' Association awards, including the trophy for best manufacturer, gave the company another boost.

Other sources of satisfaction include the growth being experi-enced in several corporate social re-sponsibility projects. Numbered among them are an HIV/AIDS initiative, the Learning For Life programme, as well as its 'Project Artiste' for young musicians in largely inner-city areas.

huntley.medley@gleanerjm.com