At SAB’s quarterly seminar yesterday on marketing, analyst Chris Wickham from Oriel Securities said he appreciated the brewer’s local knowledge and commitment to beer as a local business.
“But to what extent should we be thinking that the only thing really missing on the scene, particularly as you take more of your brands across borders within regions, is a truly global beer brand?” he asked.
The question was timely, given that that is just what the brewer of Pilsner Urquell, Grolsch and Peroni would have acquired, had Heineken not knocked back its takeover approach last month.
An approach that, in introductory remarks, CEO Alan Clarke took pains to stress was an “assertive” move, rather than a defensive measure to deflect interest in his own firm from AB InBev.
'How many 'global' brands truly are global?' SAB Miller markerting chief asks
Replying to Wickham, Nick Fell, SAB Miller marketing director, said: “I’d be interested to look at how many ‘global’ brands truly are global, in terms of what they do.
“My personal suspicion is that while the label remains the same, successful marketing programs have to be tailored to local environment, competitive and customer realities and consumer preferences.”
“The other point to make is that if you ask people around the world who makes the best beer – in the overwhelming majority of markets people say ‘We do!’. It’s that simple. The ability of a global brand to be successful at massive scale in local markets is I think hugely, hugely limited," Fell said.
“If you look at the biggest global beer brand in the world [ABI's Bud Light, which trails Chinese power brands Snow and Tsingtao in volume terms] – the number of markets where it is a dominant share leader can be counted on the fingers of two hands," he added.
“I do not envisage a future where, certainly in terms of classic and easy drinking lager, there will come a point when a global brand is the most obvious winning play in every world market.
'People seem to forget Coke was utterly unique'
Fell said people often talked about this is in the context of Coke – saying, ‘We’re going to make X brand the next Coca-Cola’, in whatever the category was.
“What people seem to forget that when Coca-Cola started expanding globally it was utterly unique – the actual product was unique. No-one locally had thought of that thing before,” he said.
“The strategy is in the product – why would I stop drinking my local lager to drink the import? Why would that be such brilliant news?" Fell asked.
“As we innovate I think it’s quite possible that some of the formulations, some of the mixes and so on in the areas we’re going to expand into are capable of more global application, but I think the market will remain local for the foreseeable future,” he said.
Straddling the gender divide, taking beer upmarket
SAB’s marketing chief said the company’s category strategy involves expanding beyond beer’s heartland as a ‘masculine, down to earth refreshment’ to tap five more key consumption occasions.
The brewer splits these down into: family relax, mixed gender casual party, mixed gender casual meals and colleagues/male conversation (the latter as a more upmarket event than masculine refreshment).
“Those six occasions in total represent something like 70% of total alcoholic beverage consumption today in the world – so from 28% [with masculine refreshment] to closer to 70 is how we’re thinking about the long-term future,” Fell said.
Extending beer 'without betraying what it really is'
The success of Radler beer mixes in ‘family relax’ showcased beer’s ability to penetrate new consumption occasion “without betraying what it really is”, he explained – given Radler’s status as a low alcohol liquid that is less sweet but more natural and refreshing than CSDs.
“The critical thing to understand about these occasions is that the product and the packaging must be suited to the occasion – we won’t access this with the same product as we access our existing occasion of men together in a bar,” Fell said.
SAB’s marketing chief said the company also saw the premiumisation of beer – in terms of liquid and package – as a "massive untapped opportunity".
He noted, in the context of both premiumisation and targeting new occasions, that of 200+ hop varieties (divided into citrus, floral, berries, orchard, woody, spicy and green categories) the major brewers use less than 14%, and then principally woody, spicy and green varieties.