Beer

Brewsters Expand Globally While Satisfying Local Tastes

Consumers seek innovation

The brand value of beer increased 36 percent, the greatest rise of any category in the BrandZ™ Top 100 Most Valuable Global Brands 2013.

The increase reflected brand strength and strong financial results in a highly consolidated category. The world's two largest beer brewers, AB InBev and SABMiller, collectively market several hundred brands. They and the next two largest brewers, Heineken and Carlsberg, produce about half the beer sold worldwide.

Also, US beer consumption rose 1.3 percent, according to the Beer Institute, a research source of the US brewing industry. The first improvement in several years, it helped balance sales in the softer economies of Western Europe. Consumption remained strong in fast growing markets.

At the same time, brewers faced higher ingredient costs and tax rates and continuing consumer price sensitivity. And the industry's traditional practices for expanding distribution and driving volume encountered new challenges from tightening regulations and changing drinking habits:

US concerns

Anti-competition concerns drew scrutiny from the US Justice Department, stalling the AB InBev acquisition of Mexico's Grupo Modelo, maker of Corona.

Russian regulations

In Russia, regulations restricting most beer advertising took effect in July 2012, in a government effort to reduce alcohol consumption.

Home consumption

The growth of home consumption inverted the standard beer marketing sequence of building a brand on premise first, especially in the UK.

Like many categories, the beer industry felt the impact of a growing consumer preference for more differentiated and customized products. Craft beer rose 15 percent in volume in the US, during 2012, according to the Brewers Association, which represents the craft brewers.

A relatively small part of the market, craft is consistent with beer's heritage as a beverage brewed for local communities and tastes. The global brewers responded to these developments with product and marketing initiatives.

Driving consumption

AB InBev offered craft brands and heavily marketed Bud Light Platinum, for example. Meanwhile, its most popular brands, Bud Light and Budweiser, rose in value 30 percent and 26 percent, respectively. Budweiser engaged in a fierce US market share battle with Coors Light, produced by Molson Coors.

Heineken, the third most valuable brand in the BrandZ™ beer category ranking, appreciated 36 percent value. The brand gained extensive publicity as the official beer brand of the James Bond film, Skyfall. Its 360 campaign included product placement in the film and extensive attention on social media. Russian beer market leader Baltika responded to the government's beer advertising ban by marketing its nonalcoholic beer. Called Baltika 0, the non-alcoholic beer fits into the Baltika range, which is branded numerically. Baltika 3 is popular and for the mass market, for example, while Baltika 7 is considered premium.

Broadened appeal

In other regions, brewers positioned non-alcoholic beer to reach people who desired the taste of beer but not the effect of alcohol. AB InBev calls its nonalcoholic Beck's beer, Beck's Blue. The non-alcoholic offerings are part of a move toward lighter beers and also beers with some novelty, such as the fruit flavoring.

The non-alcoholic beers also recognize that people socialize differently today, more in mixed company than in single-sex settings. Brewers offered more sophisticated brands like Peroni, a premium Italian brand that helped strengthen SABMiller's sales in a weakened UK beer market.

Brewers introduced beer at some fast food outlets and promoted efforts to pair beer with food. Recognizing the shift to home drinking, some brands launched for home consumption first rather than for ontrade. In the UK, Stella Artois introduced Stella Cidre, a premium cider, directly into the off-trade.

Focus on fast growing markets

The global brewers focused much attention on Latin America. In Brazil, one of the few markets where beer is not seen specifically as a male drink, AB InBev owns two of the strongest local brands, Skol and Brahma.

Both brands grew sharply in brand value. AB InBev also markets Stella Artois and Budweiser in Brazil, positioning Stella Artois as a premium brand and Budweiser as an aspirational brand.

The Colombian brand Aguila, owned by SABMiller, appeared in the BrandZ™ beer ranking for the first time. The company introduced larger bottles for Aguila last year. SABMiller derives its largest share of profitability from Latin America, where it aims to introduce lower income consumers to higher quality beer.

Similarly, in Ghana, SABMiller marketed the Impala beer brand made from the cassava root. Guinness also introduced cassava beer in Africa. The beers are intended as safer alternatives to prevalent home brews. Heineken announced plans to build a brewery in Ethiopia.

Indicative of the interest in China demonstrated by the giant global brewers, a joint venture between SABMiller and China Resource Enterprise Ltd. owns Snow beer, and AB InBev owns the Harbin brand. Yanjing Brewery is part of a Chinese conglomerate, Beijing Enterprises Holdings.

But the Chinese market is actually a conglomeration of regional markets. No individual brand enjoys complete national distribution. Reflecting a major emerging cross-category trend, the development of Chinese brands for export, Tsingtao, China's oldest beer brand, is establishing a production facility in Thailand.

Insights BrandZ BigData™

Financial success drives brand equity

The global beer brands have experienced great financial success because of the scale achieved through industry consolidation. The brands enjoy minimal differentiation, but they share in common a few BrandZ™ brand archetype characteristics, like being viewed in most countries as “fun” and “playful.”

Compared to other brands across all categories in the BrandZ Top 100 ranking, beers score modestly on being “meaningful” (appealing and meeting needs) and derive most of their brand equity from salience, (famous, stands out), reflecting the relatively high advertising and promotional spend in most countries.

Action Points

1 . Embrace innovation

With centuries of brewing heritage, the beer category evokes tradition. Innovation doesn't come as naturally. But core beer customers, young men in their twenties or thirties, have come to expect innovation.

2. Evoke emotion

Beer is an emotive category where brands matter and communication drives brand differentiation. When the consumer holds a smart phone loaded with personal apps in one hand and a glass of beer in the other, which brand does he feel more strongly about?

3. Build strong brands

It may still be possible in some bars to order three beers by holding up three fingers and accepting whatever lager is on tap. As people increasingly consume beer at home, however, they're not signaling a bartender. They're personally selecting brands. Brand becomes even more important.

Beer Up 36%


Definition
The beer category includes global and regional brands, which, in an increasingly consolidated industry, are mostly owned by four major brewers.


BrandZ Top 100 2013

BrandZ Global 2013 Report Top 100 Report

Top 100 Chart


2013 BrandZ Top 100 Infographic

BrandZ 2013 Infographic


Methodology and valuation by Kantar Millward Brown


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