Brands positioned for faster growth worldwide

Brands advanced growth plans last year, amid regulations, competition and economic uncertainty.

In the largest transaction, South Africa’s SABMiller acquired Foster’s Group, the Australian Brewer. It also completed, in March 2012, a strategic alliance with Anadolu Efes, a Turkish company, for marketing in Turkey, Russia, Central Asia and the Middle East. SAB is the world’s second largest brewer after Belgium’s AB-InBev. The two conglomerates each market more than 200 beer brands.

They attempted to grow sales of both global brand leaders and brands with targeted geographic or demographic appeal. Sales of AB-InBev’s global brands—Budweiser, Stella Artois and Beck’s—grew by over 3 percent. MillerGenuine Draft and Peroni are among the global brands of SABMiller. Its key regional beers include Coors Light and Miller Lite, marketed in the US in a joint venture with MolsonCoors.

Regionally, AB-InBev continued to enjoy success with Bud Light, which reclaimed its number one position in brand valuation based on its strength in the US, where it sponsored the NFL (National Football League). To reinforce Budweiser, the brand introduced a new visual identity, using a bow tie shape taken from its graphics heritage.

These activities took place in a challenging environment for beer sales in developed markets. The trend away from on-trade drinking continued, particularly in the UK, and many retailers discounted brands to drive traffic. Governments promulgated regulations to curb binge drinking, the troubled economy hurt premium brands and the rising interest in wine impacted brands at all levels.

Looking to fast growing market

Seeking faster growth and less regulation, the major brewers focused much attention on the BRICs and other fast growing markets. In partnership with China Resources Enterprises, SABMiller announced plans to introduce Miller Genuine Draft in central China. In a joint venture, SABMiller and China Resource Enterprises produce Snow, China’s leading brand and one the world’s most consumed beers.

Heineken invested heavily in China in the premium segment, using both the Heineken brand and local brands. Heineken expects Brazil and Mexico to drive a substantial proportion of future growth. AB-InBev owns Brazil’s popular beer brand leaders, Brahma, Skol and Antarctica. It launched Budweiser in Brazil during 2011.

The larger brewers also sought more opportunities in Africa and India. SABMiller already operates in more than 30 African countries, generally with its French joint-venture partner, Castel. Guinness is well received in Africa where it is seen as a premium drink and a virility enhancer. Although Africa’s poor transportation and cooling challenge most beers, it does not disadvantage Guinness because the brand is intended for consumption at ambient temperature.

Regulations reach fast growing markets

But even the fast growing markets became more challenging. United Breweries, which leads the Indian beer market in popularity with its Kingfisher brand, introduced Heineken last year. But local regulations slowed the Indian expansion of SABMiller and the other global brewers. An increase in taxeson imported beers contributed to a growing interest in local microbrews in Indian cities.

Turkey strengthened restrictions on alcohol marketing and considered raising the drinking age as part of the government’s Islamic reform program. Russia prepared for legislation, to take effect in July 2012, banning television advertising of beer and restricting sales of beer at night.

Russian beer brands, including the market leader, Baltika, which is owned by Carlsberg, are expected to shift some marketing investment to sponsorship. Meanwhile, Baltika continued to leverage the brand by marketing to multiple audiences naming all the beers Baltika and simply numbering the variations to reach more underserved groups.

Beer innovates in social media

Because of regulations restricting advertising in traditional media, beer brands have become some of most innovated practitioners of social media. Heineken last year launched an interactive mobile app called Heineken Star Player. Tied in with the brands sponsorship of European football, the app engages users in the game real time with opportunities to score points through quizzes and commentary on game action.

Bud offered an app that discounted the cost of beer on very hot days. Once the weather reaches a certain temperature, the Budweiser Ice Cold app issued the user a discount redeemable at local pubs. Many generic beer apps called attention to the category, including a beer calorie counter and an app named simply iBeer that simulates a tall cold class of beer on a smart phone screen. Users create a foamy head by shaking the phone and pretend to drink by tilting it.

Some innovation was real rather than virtual. Brazil’s Brahma beer introduced a can that converts into a cup. Instead of pulling a ring tab to open a small spout, the user removes the entire top. The can is called Brahma Copaço or Big Cup.

BrandZ Top 100 2012

BrandZ Global 2012 Report Top 100 Report

Top 100 Chart

Methodology and valuation by Kantar Millward Brown

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