SABMiller Thinks Globally, but Gets 'Intimate' Locally

Rather Than Push One Flagship Around World, Brewer Bets on Favored Regional Brands, Strategies

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CHICAGO ( -- Maybe it's all the Polish jokes.

But for whatever reason, beer drinkers in Poland apparently need a pat on the back from the rest of the world, SABMiller says it has discovered. "One of the first things in the Polish psyche about Poland is 'no one takes us seriously,'" said Nick Fell, the brewer's marketing director. "What's incredibly important is external validation of Polish reasons to be proud." That notion led SABMiller to launch a campaign for its Tyskie brand featuring foreigners lauding the Polish brew and Polish people.

From Peru to Romania, the brewer is making similar adjustments to its advertising, believing the key to winning the global beer battle is by pushing local brands and appealing to a home country's customs, attitudes and traditions. The approach, outlined by Mr. Fell in an interview with Ad Age, stands in contrast to its chief competitor, Anheuser-Busch InBev, which is seeking to bring its Budweiser brand to new markets across the globe in hopes of growing it to the scale of Coca-Cola.

Credit: *adjusted for proportional conslidation/pro forma volume shares / Source: Consumer Edge Research/ Euromonitor International

The stakes are high: With fewer opportunities to expand by acquisition, international brewers must find ways to boost their brands, especially in developing countries.

"The key to growth is going to be growing organically, unless people start drinking more, which they probably aren't," said Harry Schumacher, publisher of Beer Business Daily. "That means taking share from each other, or from wine and spirits."

To do so, SABMiller -- which has an 11.8% global market share compared with leader A-B InBev's 18.8% -- is asking managers in its 75 countries to focus more on marketing and less on back-office tasks. The executives rely on sociologists, anthropologists and historians to find the right buttons to push when selling brands.

Mr. Fell said the relatively small market share held by global mega-beer brands is proof that beer is inherently a local product and must be sold that way. He points to the top international brands, which hold only a sliver of total global market share. Heineken and Corona Extra have only about a 1.5% share each, according to Euromonitor International.

"If you're seeking to be the biggest player in beer, and the most profitable player in beer ... you're not going to win by focusing your effort behind a very small portfolio of mega global brands," Mr. Fell said.

So SABMiller is pushing what Mr. Fell called "local intimacy" across its six-continent operation, including:

  • Peru, where bottles of its Cusquena brand feature replica stones of an Incan wall that, he said, "pay tribute to the elite standard of Inca craftsmanship that continues to this day in every bottle." Bottles of the Arequipena brand show fighting bulls, a tribute to the bull-on-bull sport fighting popular in a region of the country.
  • Romania, where a TV ad shows an empty barrel of Timisoreana beer being rolled out of a bar then back in time through quaint villages, scenic landscapes and finally filled at the original 18th-century brewer that created the beer.
  • Ecuador, where the brewer plays off the nation's tradition of holding many festivals by offering limited-edition packaging for Pilsener and giving away gifts and prizes to the community.
  • Poland, where the Tyskie campaign includes a group of Czechs raising their glasses to the Polish brew.

To be sure, SABMiller still spends big on its international brands -- Miller Genuine Draft was introduced in Colombia and Peru this year -- but when doing so, the brewer looks to access "a quick cultural reference that will help people understand what the brand stands for," Mr. Fell said. MGD in Colombia, for example, was positioned as "an icon of cosmopolitan cool" to appeal in urban areas.

Sales of all SABMiller brands have increased in Africa, Asia and Latin America, but dropped in recession-ridden Europe and North America, according to the company's 2010 annual report.

If SABMiller's global approach can be summed up by a barrel rolling through historic Romania, then A-B InBev's strategy might just be called "Bud United," a tagline for its recent World Cup sponsorship. The brewer credits the promotion with keeping global volumes flat in the challenging first half of 2010, according to a company statement on its second-quarter results released Aug. 12.

The "World Cup [promotion] sold a ton of Bud," Mr. Schumacher said. "The question is: Will people keep drinking it?"

Tests will come in Russia, where Bud was introduced in May, and Brazil, where it will hit stores soon. In its second-quarter report, the brewer described Bud as one of its "Focus Brands" -- those that have the "greatest commercial potential" and will get the "majority of our attention."

At present, Bud only has a 0.7% global market share, when U.S. sales are excluded, according to Consumer Edge Research. Heineken is No. 1 at 1.3%, excluding home-country sales.

Brett Cooper, a financial analyst who covers A-B InBev for Consumer Edge Research, said: "Our view on Budweiser is it will be a slow rollout [globally], it will be priced above mainstream brands and, if successful, it will be a nice compliment ... to their existing business."

Pre-merger Anheuser-Busch had only "limited success" selling Bud outside of the U.S. and Canada, he said. But A-B InBev has the advantage of rolling it out in markets where it already has a footprint, such as Brazil, where the company's brands command a 70% market share, he said. Still, Mr. Cooper said, "Beer is a local business. Each market is going to be dominated by the local brands. That's just the way that this industry has developed."

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CORRECTION: A headline in an earlier version of this story incorrectly referred to MillerCoors' global strategy.

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