Snow gaining on Tsingtao

Ads mock rival's Olympic sponsorship

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BEIJING--Snow, one of China's few national beer brands, is capitalizing on a dramatic rise in sales and popularity with a new marketing strategy aimed at cementing its position as a major player among young adults. The campaign also playfully mocks mainstream rival Tsingtao’s Olympic Games sponsorship.

Sales of Snow beer, produced by China Resources Snow Breweries, a joint-venture between China Resources Enterprise and SABMiller, the world's second-largest brewer, rose 47% by volume in 2005, topping 15 million hectoliters. Snow beer is made in 41 breweries across China.

Its fast growth puts Snow neck-and-neck with Tsingtao, one of the few major beer brands in the mainland with national distribution. Snow and Tsingtao, partly-owned by Anheuser-Busch, each have a market share of about 14%, according to industry estimates.

Although China is the world's largest beer producer, the average Chinese adult drinks just 23 liters of beer a year, according to the China National Food Industry Association. That is much less than consumption of almost 30 liters per capita in Hong Kong, 100 in Australia, 118 in Germany and 159 in the Czech Republic.

"The brand is growing through a mixture of distribution and marketing, but it needs to get talked about more to look like a big brand” compared to its better-known rival, said Charles Sampson, China CEO of the agency behind the new campaign, Publicis Groupe’s Saatchi & Saatchi, Beijing. "We're going for big status. We want to create the voice of the common man.”

To raise its profile among its target 25-35 year-old age bracket, the agency countered Tsingtao, the national beer sponsor of the 2008 Olympic Games in Beijing, by calling Snow the official sponsor of beer lovers in a way that appeals to the strong nationalism of Chinese consumers.

The summer-long campaign broke in print and outdoor media on May 16. A lighthearted 30” spot begins with a beer drinker watching soccer on television. He heads out of his house and walks through the streets and markets of his city, picking up drinking buddies along the way.

As he walks, he tells viewers, “No one sponsors my shoes. I can't run very fast. I don't jump very high. But we are pretty amazing. I work hard to give my family a great life. I love to drink beer and have friends all over the place. When our country wins we shout louder than anybody. Without us there won't be any victory.” It ends with a blast of fireworks and the tag line, “Beer lovers, Snow will always support you. Your official partner.”

“No one sponsors him to wear clothes, and he can't jump hurdles but he still thinks he’s a pretty good guy,” said Beijing-based Mr. Sampson. “We're making heroes out of Chinese beer drinkers while making the point that Snow is a big brand. Our research shows this approach taps into classic beer values about male friendship, celebration and being with the guys.”

The approach is a departure from Snow’s previous positioning as a more working class beer, the choice of consumers who work hard but need to play hard to keep pace with China’s fast-growing economy.

Next month, the traditional advertising will be supported in China--the world’s largest mobile phone and Internet markets by number of users--with an interactive mobile and online campaign developed by The Hyperfactory, a New Zealand-based mobile marketing company that recently formed an alliance with Publicis Groupe.

To maintain Snow’s momentum, China Resources Snow Breweries is expanding production. Earlier this month, the company announced a new $35 million brewery in Harbin with the capacity to produce 2.3 million hectoliters of Snow beer annually in China’s northeastern industrial “rust belt” region. The acquisition is a major step in the joint-venture’s efforts to overtake Tsingtao.

Last February, the company bought 85% of Qingyuan brewery in Quanzhou in southeastern Fujian province, where beer consumption is almost double the national average at 39 liters per person. The $8.9 million deal was “part of our national strategy for Snow to expand into southern China prudently,” said Hong Kong-based Mark Chen, managing director of China Resources Enterprise in Hong Kong.

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