Brand Management - Us Beer Market


Published on

Published in: Business
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Brand Management - Us Beer Market

  2. 2. / INTRODUCTION Have you ever drink a glass of beer and try to recognize the brand being blindfolded? Because different studies proved that it is not that easy! It is in fact difficult and a lot of people failed this exercise! That is why we chose the beer market; because it exists plenty of beer brands in the world and they have only one way to differentiate themselves from others: consolidate their images with a clear positioning and a massive communication plan. To lead our brand audit we first gave a general picture of the beer market in US, the leaders and the key figures. Then, we tried to analyze the customer insights by understanding their habits, their motivations and their emotions. And at the end we analyzed the competition by focusing our researches on three significative global brands on the US market, which are, Budweiser (domestic beer), Heineken and Corona Extra (imported beers). We compared the brand strategies of AB- InBev, Heineken USA and Grupo Modelo, the positioning of our three targeted brands and their identities.
  5. 5. ABOUT BEER... “Beer is the world's oldest and most widely consumed alcoholic beverage and the third most popular drink overall after water and tea. It is produced by the brewing and fermentation of starches, mainly derived from cereal grains—most commonly malted barley, although wheat, maize (corn), and rice are widely used. Most beers are flavored with hops, which add bitterness and act as a natural preservative, though other flavors such as herbs or fruit may occasionally be included. The basics of brewing beer are shared across national and cultural boundaries. Beers are commonly categorized into two main types—the globally popular pale lagers, and the regionally distinct ales, which are further categorized into other varieties such as pale ale, stout and brown ale. The strength of beer is usually around 4% to 6% alcohol by volume (abv.) though may range from less than 1% abv., to over 20% abv. in rare cases.” Wikipedia MARKET VALUE !"#$%&'("))"*+' ,'-%*.#/' Accounting for 53% of the total sales in the alcoholic beverage, Beer is the most popular drink in the alcoholic beverage2, just before wine (14.5%) and spirit (32.5%). However, the overall US beer sales were down 2.2% in 20093. The industry seems to reach its point of maturity with a light decrease in the growth since 2004. !"#$%%$&'" (")*&+,-" MARKET SEGMENTATION Standard lager sales generated 35.7% of the United States beer market's overall revenues. Sales of premium lager generated 34.2% of the market's aggregate revenues. DISTRIBUTION Supermarkets and hypermarkets form a leading distribution channel in the US beer market, distributing 55.8% of the total market volume. Sales on-trade account for 22.5%, followed by In 2008, the United States beer market grew by the specialist retailers which represent 14.9%. 0.8% to reach a value of $78.8 billion. According to the following chart the market MARKET SHARE growth has been decreasing since 2004. We The US beer market is dominated by 3 major can observe the same phenomenon in volume. companies. Anheuser-Busch leads the United States beer market, accounting for 50.9% of However, in 2013, the United States beer the total market volume according to market is forecast to have a value of $82.4 Euromonitor. With 18.5% SABMiler steps in the billion, that means an increase of 4.6% since second position. Molson Coors is third. 2008. 5
  6. 6. Those three Groups hold many brands, but Anheuser-Busch by InBev. The company is they are really focused on only two or three. All engaged in the production, distribution, and their investments are made toward those sale of beer and soft drinks. It sells lagers, particular brands, so it is very difficult for premium beers, and specialty brews in several smaller companies to enter the market. The countries across the world and operates other beer brands that the major groups facilities in over 30 countries. possess are being sold only in order to reach The company offers a portfolio of over 300 every segment of the population. brands that includes: LEADING COMPANIES • Global flagship brands: Budweiser, Stella Anheuser-Busch InBev (ABInBev) is born in Artois and Beck’s November 2008, with the acquisition of • Multi-country brands like Leffe and !"#$%&'(")'*#'+($(,-+."/")0$%'1"23"4$56'" !"#$%&'(")*$%'"+",")*$%'-"./"0123#'-"4556" ()*+,)#-./)0).# $"#!"# '()*+$ 12-,3-43#(-564# '%"# !"#$ $%"# ,-)*./*+01./2)$ 74689:8#(-564# 3-1*4$ $&"# %&#$ 5,16377*+$ 1;6/9-.2<#=664# 687/8-$988+/$ >.6?@#12):2?#A# 1+*:3-;$98<=>-?$ =9B64?# !"#$%&'$()&$*+,"-"%./'0,"(1"2*3)40,"5667" ()*+,# !"# '$"# -./+,01,2+)34# 56/+,01,2+)3# &&"# $%"# (789,1:+# -/+;<1=<3)#>+)1<=+,3# Hoegaarden The company’s business is divided into two • Local brands such as Bud Light, Skol, segments: beer and non-beer. However, the Brahma, Quilmes, Michelob, Harbin, company's reportable business is organized Sedrin, Cass, Klinskoye, Sibirskaya into seven operating segments on the basis of Korona, Chernigivske, and Jupiler, geographical areas: Latin America North, among others Western Europe, Central and Eastern Europe, North America, Latin America South, Asia In addition, the company owns a 50% stake in Pacific, and Global export and holding Grupo Modelo, Mexico’s leading brewer and companies. owner of the global Corona brand. The company also owns a 27% stake in Tsingtao, a Chinese beer. 6
  7. 7. Anheuser-Busch InBev generated revenues of The US segment produces, markets, and sells $23.6 billion in the financial year ended portfolio of brands in the US and its territories December 2008 (FY2008), an increase of including Mexico and Caribbean. The company 11.6% over 2007. The company's net income has two production facilities in the US. The totalized $1.9 billion in FY2008, a decrease of company sells its products to over 550 41.4% compared with 2007. independent distributors who distribute to retail accounts. Molson Coors also owns three SABMiller is one of the world's largest brewers distributorships in the US. The company’s with brewing interests and distribution brands sold in the US include Coors Light, agreements across six continents. The Coors, Coors Non- Alcoholic, Blue Moon company's market presence ranges from Belgian White Ale and seasonal Blue Moon developed economies in Europe and North brands, George Killian’s Irish Red Lager, America to emerging markets such as China Keystone, Keystone Light, Keystone Ice, and and India. Zima. SABMiller offers brand such as: Molson Coors generated revenues of $4.8 billion in the financial year ended December • Pilsner Urquell, Peroni Nastro Azzurro 2008 (FY2008), a decrease of 22.9% over 2007. and Miller Genuine Draft in the premium The company's net income totaled $388 million beers category in FY2008, a decrease of 22% over 2007. The • Local brands such as Aguila, Miller Lite, US accounted for 33.3% of the total revenues Snow and Tyskie. SABMiller is also one in FY2008. Revenues from the US reached $1.6 of the largest bottlers of Coca-Cola billion in FY2008, a decrease of 45% over products in the world. 2007. The company’s operations are primarily divided across beer manufacturing and soft drinks There are many beer brands on the market, business. However, SABMiller’s reporting is but a very interesting fact is that those primarily based on geographical operations: brands are actually hold by only a few North America, Latin America, Europe, South companies. The three major companies Africa and Africa and Asia. SABMiller operates managing the leading brands do not in North America through its subsidiary, Miller differentiate themselves through their Brewing Company (Miller), which is the second products. Indeed, they all have in their largest brewer in the US. portfolio a light beer, a lager beer… Instead, Molson Coors is one of the world's largest what matters in the beer industry is to brewers. The company has 18 breweries in compete on the positioning: target, image, more than 30 countries. It has a portfolio of communication…are the aspects on which over 40 brands including Molson Canadian, the companies are playing in order to win Coors Light, Extra Gold, Zima XXX and Carling. market share. The company’s operating subsidiaries include: Coors Brewing Company (US); Coors Brewers Limited (UK); Molson Canada (Canada). T h e c o m p a n y o p e r a t e s t h ro u g h t h re e geographic segments: the US, Canada and the UK. 7
  9. 9. Notes before reading: in a bar or at home. We can see it that beer is Results based on a survey made on 60 really related to social links and enjoying the Americans from 5 to 12 march and from moment. According to this result, we can see Surveys results from websites (available in that drinking beers while watching a game is sources) and from observation made on beer indeed associated with a man behavior. But we consumption in the US. should not let that leading us to think that drinking beers is only a man activity. Many We will study now deeply who are these women are now assuming that they like beers customers in order to really understand and they drink beer regularly. With the what are their motivations and emotions. increasing number of lights beers or no-alcohol What are their habits? Where, how and when beer the numbers of women consuming beer is are they drinking beers? And the most increasing as well. Even if men too are very important, why are they drinking this, what kind of light beers which are having a really big are the emotions they are looking for? success in the US. The beer drinker wants to enjoy his moment but he is as well taking care The beer clients are very different from one about his image and his health. The country of beer to another. But beer drinkers have several origin of the beer is as well important for the similar “features”. customer; it is easy to identify where a beer comes from. On this, brands can do a lot of WHAT ARE THEIR HABITS ? work, emphasizing their country of origin or in They are drinking in a bar to be with friends contrary making it smaller. This element can be (50%) or at home still to be with friends (35%). a very strong brand equity. These results show that drinking beer is principally a social activity. They do this when WHO ARE THE BEER DRINKERS? they feel well surrounded with friends. In some It is hard to establish a profile of this beer cases they can be influenced in making their drinker, as there are different profiles for all the choices. When their friends are drinking beers, different types of beers. The most general thing they will feel to drink beers rather than other that we could say is that the beer drinker wants kind of drinks. Either at home or at one of their to enjoy the moment. Nevertheless we can friends’ place, drinking beers attempts to be define what he is looking for. 38% are looking easy for them. Indeed it is easy and cheap to for fr iendshi p m o ment s, 11% for t he bring a 6-pack, you can find it in any experience and 4% for the brand. According to supermarket and it cost much less than a good these numbers we can assess that managing wine or hard alcohols. However, even though the brand is really important. Indeed if you beers are consumed most of the time during manage to communicate that your brand is the the weekdays, the customers don’t want to be friendliest and provides a really enjoyable drunk but just to enjoy the good moments. experience and if you manage to create loyalty So it is fair to say that beers are more favored around it so you already got 53% of the customers. 22% are looking for a good taste than hard alcohol in the mentioned situation. and 16% for refreshment. WHEN AND HOW ARE THEY WHAT KIND OF EMOTIONS ARE THE DRINKING? CUSTOMERS LOOKING FOR? You can find a beer drinker in the US during Drinking beer is an experience. Customers are lunchtime with a sandwich but mostly after looking for a special moment to share. Deeply work in a bar or at home. 15% said they they want to create social links. consumed beer while watching a game on TV 9
  10. 10. Having a beer it is saying “cheers”, it is the promise to spend the next 15 minutes drinking a not too strong but tasty drink that you will not pay a lot, that is available in a bar or in a supermarket. Buying beers to bring to a party it is the knowledge that it will always be a right choice contrary to the wine, complicated to choose or the hard too expensive. It is not a surprise that in the countries where it is legal b e e r s a re s p o n s o r i n g s p o r t c l u b s o r competitions. It is the same spirit that clubs and beer brands want to convey: friendship and enjoyable moments. The events like Oktoberfest (the world's largest beer festival )or visiting a series of different pubs “Barathon” are the peak of the research of emotions : many people consuming beers in the same time and enjoying the moment. 10
  12. 12. In this part, we will first analyze the brand architecture of three major brewery groups, then we will focus our study on the global positioning of the major beer brands in US and more precisely on Budweiser, Heineken and Corona Extra. And finally, we will finish our brand audit by doing an analysis of the three selected brand’s identities to prove that even if they propose the « same » product (a lager beer), they really have a clearly different image due to a distinct positioning and targeting. BRANDS ARCHITECTURE AND • More generally, should there be a PORTOLIO different name for the company and the commercial brand? To understand the brand identities of • Should the same architecture apply Budweiser, Heineken and Corona Extra, let’s around the world? first have a look at the brand architecture to see the brand strategies adopted by AB-InBev, The branding strategies are structured along Heineken USA and Grupo Modelo, their two axes according to whether the value respective companies. sought by the brand relates more to power and stature on the one hand, or personalisation, Here comes five types of question when we differentiation and identity on the other (beer talk about brand architecture : market). • What to call new products ? • How many brand levels to adopt ? • How much visibility to give to the corporate name, group name and the see the scheme below company name itself? 12
  13. 13. AB-InBev Brands Portfolio If we have a look at the AB-InBev brand But in the case of AB-InBev, the brand portfolio architecture we can see that in the beer extension has also its limits. By creating category they own 60 brands organized under something for everyone, the company attracted nine lines or «  families  » (as they call them) new constituents but it comes at the expense which have all their own positioning. By of the company’s core brands. For exemple, we adopting a line-brand strategy, AB-InBev saw that by launching the Michelob Ultra line (a responds to the concern of offering one recent line focused on the light beer), AB coherent response under a single name by removed customers from a long-term and proposing many complementary products. stable brand such as Bud Light. We can also call this, brand cannibalism or brand dilution. The line involves the exploitation of a The customers are lost because the positioning successful concept (for instance, Budweiser) of each brands from the same company by extending it but by staying very close to the become less clear. initial product (Bud Light or Budweiser Select). With this offensive brand strategy designed to Also, with a line-brand strategy, the company occupy the whole market and thanks to its name is always different from the brand name impressing brand portfolios, AB is able to cover that is why the company communicate under different needs and expectations (light, lager, the Budweiser brand or others when it talks to flavoured etc...). its final consumers instead of AB-InBev – which is only used when they do corporate communication. 13
  14. 14. HEINEKEN Brands Portfolio Grupo Modelo’s Brands Portfolio  14
  15. 15. By looking at the Grupo Modelo (13 brands) To c o n c l u d e o n t h o s e t h re e b re w e r y and Heineken USA’s (10 brands) brand companies’ brand strategies, we can say that architecture, we noticed that they have the they all have adopted pretty the same strategy same branding strategy which is a product- to be able to flow the beer market with various brand strategy. brands answering each a specific need. All of When the segments are closely related, which them follow that strategy by hidening the is the case on the beer market, choosing one company name and insisting on the brand name per product helps customers to perceive name which answer a specific positioning. better the differences between the various brands. (Heineken vs Heineken Premium Light) The main positive point of this product-brand POSITIONING STRATEGY / A KEY strategy is that since each brand is FACTOR FOR BEER COMPANIES independent to the others, the failure of one of The battle for market share and marketing them has no impact of negative spillover on the advantage in the US beer industry has never others, or on the company name, in cases been keener. Beer outlets have never had so where the company name remains relatively many offerings. Beer actors playing for the unknown to the public and different from that of same audience. any of the brands which is the case for In this context, the beer companies need to Heineken USA and Grupo Modelo. identify and claim a distinctive spot in the When we analyze the Heineken USA’s brand minds of beer consumers and have true Architecture we saw that it is globally meaning for them to develop a strong consistent, coherent, disciplined and rigidly competitive position. And this is the paradox, enforced. 15
  16. 16. how brands can adopt a “differentiate” brand Relationship, Intimate-Casual, Domestic- position when they are all starting to look the Imported, For Fun-For Experience, Friends- same? They need to trade off personality and Self… brand image rather than product benefit. When mapping out the beer landscape, we can Lets focus now on the positionning strategies observe through several criterias, the positions of our three brands, organized by nature that a beer brand could take based on the ads. (domestic or imported), target (young to older) by consumption (everyday to occasional) and Follow, are some possible positions a beer by quality. could choose: Youthful-Mature, Hedonistic- 16
  17. 17. 17
  18. 18. BRAND IDENTITIES First, we analyzed for each brands the evolution of the taglines and the commercials Now we understood the brand strategy of each from the begining to today and then we tried to groups, let’s have a look at the brand identities build an identity prism for each of the brands. for Heineken, Corona Extra and Budweiser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
  19. 19. !"#$%&'%($)*+&,"-./0&12"2$#&34*"#& .-/,)0"&' .&%,*+(#)$/' 6789:'/977;<' &=;G?' 49=>?@A'?B;<A:'&CD9B;B' !E>77' 69@?E9F' 1B>9AH7I' %&#($)*+,-).' !"#$"%&' 49=>?@A'FD>B>O'' &F?@D>FC'%97@=@G;A' !"Laid back *<A'#>Q9FOI79' Lifestyle" "A>M89A9FF' ,J9<'K'/;8AL'' "A>M89' )PC'7@>H'N@?J:'' %9FD;AF>N7I'%97@=' A;O'D@BO';Q'OE9'C@FF'' *D9A'O;'?E@AL9' @AH')'H;APO'<@AO'O;'O@J9'CI'7>Q9'O;;'F9B>;8F7IR'' %&1#&2)*+' ,&#13)4(5&' By analyzing the various criteria of the brand This analysis highlights one major thing, those identity (physique, relationship, reflexion, three brands of beer, which propose the same personality, self-image) and the evolution of the product (a lager beer) on the same market (in taglines for each of our three brands, we US and globally), differenciate themselves conclude that Heineken focus its image on thanks to their unique image, positioning and enjoyment, Corona Extra on a laid back lifestyle communication rather than with a distinct taste. and Budweiser on the American spirit. That is why beer brands invest a lot of money in marketing and advertising. 19
  20. 20. / CONCLUSION Through this brand audit it is important to keep in mind that the key success factors for the brands in the beer market are the ability to have a strong brand image and a clear positioning. Indeed, brands do not differentiate through the product itself (the taste is fairly the same for all beers in the same category), they need to invest in massive communication plan to consolidate their positioning in consumer’s mind. By developing a lot of innovative beers, big companies are facing a tough situation since they are not always clear on the positioning of each of their brands (risk of canibalism). It can create confusion for the consumers and affect the sales of the companies’s core brands. Heineken, Budweiser and Corona Extra understood very well the rules of the game : billion of dollars are spend every year in advertising in order to stay and act in the consumer’s mind and keep their compétitive advantage on the beer market.
  21. 21. / SOURCES BOOK « The New Strategic Brand management » by Philip Kotler WEBSITES Datamonitor : The beer market in US http://
  22. 22. / APENDIX 1. What is your nationality? What is your nationality? 2. How old are you? How old are you?   18/25 25/40 40/65 more than 65 3. Are you: Are you:   A woman? A man? 4. What are you frequently drinking? What are you frequently drinking?   Soda Juice Beer Hard Alcool
  23. 23. / APENDIX 5. Why do you prefer this drink? Why do you prefer this drink? 6. How much Beer do you Drink? How much Beer do you Drink?   3+ per day 1 - 2 per day 3 - 4 per week 5 - 10 per month Less 7. What is your favorite place to drink Beer? What is your favorite place to drink Beer?   Bar with friends Bar with a game (football,...) Home with friends Home with a game (football,...) Alone on the couch
  24. 24. / APENDIX 8. How do you prefer to drink beer? How do you prefer to drink beer?   On draught Bottle Can Plastic cup 9. Why do you drink beer? Why do you drink beer?   Taste Fresh It is fashion To be with my friends Brand loyalty To experience Health Local tradition With a meal
  25. 25. / APENDIX 10. Please grade from 1 (worse) to 6 (best) the following beers: Budweiser Corona Heineken Stella Artois Guinness Kronenbourg
  26. 26. /