What does beer consumption have to do with my category?
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What does beer consumption have to do with my category?

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In this economy, the answer is pretty much everything. As it turns out, beer is a good indicator of what's going on in the economy at large, as the level of its consumption has ripple effects that ...

In this economy, the answer is pretty much everything. As it turns out, beer is a good indicator of what's going on in the economy at large, as the level of its consumption has ripple effects that touch all kinds of products.

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What does beer consumption have to do with my category? What does beer consumption have to do with my category? Document Transcript

  • September 20,2011This weeks question:"What in the world does beer consumption have to do withmy category?"In this economy, the answer is pretty much everything. As it This is not unique to beer consumption, though, no matter whatturns out, beer is a good indicator of what’s going on in the the Ernst & Young report implies. This is a vicious cycle thateconomy at large, as the level of its consumption has ripple could be pegged to any category. There is no one category thateffects that touch all kinds of products. is more fundamental than any other. Every category has been hurt by declining demand, which has, in turn, rippled out toA recent report by Ernst & Young made a strong case for the associated categories. Ernst & Young singled out beer because they were hired by the trade group for European brewers, butimportance of beer consumption, both as an indicator and as a they would have found the same pattern for cars or white goodsprincipal dynamic. Now, admittedly, this analysis was or restaurants or travel or virtually any category. The nexus ofconducted on behalf of the Brewers of Europe, a beer industry connections exposes the well-being of every category to threatstrade group. But the report passes muster, and the relevant from declining demand in every other category.point here is not so much beer per se as the yoke ofconnections binding every category to every other category andwhat that means for marketers. The only way for marketers to address this problem is to lift their focus beyond their specific categories. Marketers must work to inspire confidence in consumers, not simply look to motivateKeeping the sponsor in mind, the Ernst & Young report made consumers to buy their brands. Absent confidence, consumersseveral key observations. First, nearly three-quarters of the withdraw, with ripple effects that spread to every category.jobs associated with beer consumption have nothing to do withbreweries. These are jobs in restaurants, hotels and bars.Reflect on this and you realize that jobs in these related Of course, for many consumers, the problem is less one ofindustries support jobs in other industries. All of a sudden, you confidence and more one of financial wherewithal. But even thisget a sense of how tugging on one string unravels everything is no excuse for marketers. A story in The Wall Street Journalelse, and not just beer, but every industry. last week highlighted P&G’s new strategy of going high and low, with less focus on the struggling, and declining, middle. P&G isUnfortunately, the economic downturn has precipitated a making sure that financial wherewithal is not an issue fordecline in beer consumption. Remaining consumption has to a struggling consumers, and with that out of the way, is able tolarge extent shifted to in-home, which means corollary job focus on inspiring consumer confidence.losses in industries closely tied to away-from-home beerconsumption. The suggestion here is not for marketers to tackle the impossible task of reversing consumer despair when people areThe ripple effects don’t stop there. People who are facing real financial hardships. It is simply to say that the cycleunemployed don’t pay taxes and collect benefits. Governments of gloom will take an ever-increasing toll until marketers step upwind up footing the bill while taking in less income. If this to the biggest challenge facing the marketplace today: shakydouble whammy is serious enough, which it has been during consumer confidence. It’s okay to push a message that benefitsthis downturn, governments are forced to cut spending through everybody in the consumer marketing space because without it,layoffs, which further reduces beer consumption. It’s a vicious the struggles of everybody else will come home to roostcycle that feeds on itself. eventually. The imperative is to lead the way for marketing in general, and then return to marketing as usual when more consumers feel confident again.