China Insights

Action plan to help beer brands keep flowing

Martin Guo

Editor-in-Chief, Kantar China Insights

Brands 19.06.2018 / 11:17

Beer 2 col

The value of beer brands is growing slower in the world. Beer sales in China is stagnant. We have summarized 5 key advices to guide beer brands to pick up speed again.

The FIFA World Cup Russia 2018 kicked off last week in Mosco, with Russia crushing Saudi Arabia 5-0 in the opening match and Germany losing to Mexico in the biggest upset so far in this tournament. Traditionally, World Cup is the season for beer. However, this one-month extravaganza is just a short-term boost for beer consumption. Beer brands have been facing big challenges both globally and in China.

According to Kantar Worldpanel, the penetration rate of beer in Chinese urban families is 68% in the 52 weeks ending March 2018. It was the same as in a year ago, and two percentage points lower than that at March 2016.

In terms of sales value, the year-on-year growth for the 52 weeks ending March 2018 was 0.8%, and the growth in March 2017 was only 0.6%. The unit sales volume was almost the same (-0.1%) for 52 weeks ending March 2018. In the period ending March 2017, it was even 1.9% lower than a year ago.

Globally, brewers are also under pressure. According to BrandZ™ Top 100 Most Valuable Global Brands 2018 report, the combined brand value of the beer category rose 3%, slower than the 5% rise registered a year ago.

Beer Brand Value Change

Declining consumption, changing consumer tastes, and concern with health and wellness challenged major brewers to reinvigorate established brands with new taste and zero-alcohol options.

The BrandZ™ Beer Top 10 struggled to remain “Meaningful” and meet consumer needs with relevant products that sustain an emotional attachment. Over the past 12 years, the Beer Top 10 Meaningful score declined from 103 to 94. An average score is 100. In the 2018 ranking, brands that scored higher in Meaningful rose an average of 6% in value, while the value remained unchanged for brand that scored lower in Meaningful. Considering the total value of the Top 100 brands jumped by 21% in 2018, then staying the same was a big under-par performance. 

Top 10 Beer Meaningful Index

Changing tastes accounted for the decline of light beers in the US, with Bud Light dropping one spot in the BrandZ™ beer category ranking. Furthermore, this shift may well lead to the death of “light beer” as we know it, as seen by the ongoing steep declines of the Big 3 (Bud Light, Coors Light, and Miller Lite) in the US.

Top 10 Beer Brand Value Change

Accordingly, brewers added more drinking occasions, attempting to pair beer with food and appeal to more women drinkers. They introduced more premium offerings for consumers who, while drinking less, were willing to spend more for each beer consumed. For younger drinkers less inclined to drink alcohol, brands tried to formulate alcohol-free options with a genuine beer taste.

Budweiser Prohibition Brew

ABI launched an Alcohol-free drink: Budweiser Prohibition Brew

As brewers adjusted to changing consumption habits and taste preferences, some of the greatest threats to beer come from outside the category, including the growing popularity of hard lemonade and, in the US, of flavored malt beverages (FMBs), alcoholic drinks that are brewed like beer but typically have a fruit rather than beer flavor.

To stimulate Bud Light sales, ABI extended the line with new flavors, including grapefruit and lemonade, called Bud Light blends. MillerCoors launched Two Hats, an affordable light beer flavored with fruit—pineapple or lime. At the same time, ABI launched Bud Light in the UK with a major multimedia marketing campaign that included digital, traditional, and instore messaging.

Two Hats Beer

MillerCoors launched Two Hats, an affordable light beer flavored with fruit, targeting young generation

Healthier brews add growth

The trend of seeking healthier food and beverage has been a threat to overall beer consumption, as younger drinkers drink less and switch to new, better-for-you alternatives; lighter, lower carb “hard seltzers” in the US are a perceived healthier option for a predominantly female audience increasingly conscious of the impact of alcohol on their wellness regimes. The increasing health concerns are also linked to the downturn of “light beer”.

Brands should consider how to leverage surging health and wellness trends to drive incremental growth because consumers are looking for ways to have their (low-calorie) cake and eat it too. Drinkers looking for beer with no or low alcohol could choose among Heineken 0.0, Budweiser Prohibition Brew, and Guinness Open Gate Pure Brew. ABI has announced a goal of having 20% of its volume no-or-low alcohol by 2025.

This explosive rise of the calorie-and-carb counting has produced active lifestyle focused Michelob Ultra in the US, zero alcohol beers like Budweiser Prohibition and San Miguel 0.0 and the “Dry January” marketing campaigns in the UK. In the quest for new revenue streams and the future of the category, it really will be a case of “survival of the fittest.”

Brand building action points

1. Anticipate change

Pay attention to women and younger consumers with different taste profiles. Find out what is meaningful and different today and anticipate how tastes may change.

2. Be honest

Brands that establish and sustain relevant and clear positioning are most likely to thrive in a slow-growing category. Winning brands will be those whose proposition is true and remains true over time.

3. Communicate with consistency

With useful data about people’s attitudes, expectations, and behaviors, it is possible to communicate in ways that resonate across geographies and demographics, while maintaining the core brand positioning. 

4. Communicate across media

Get the message out with TV, but also with new experiences and engagements. Younger people, in particular, are looking for experiences. Know the people, then find the medium.

5. Seize the moment

In a fragmented and crowded market, it is important to understand the dynamics at the moment of purchase and stand out as distinctive.

Two successful cases

The two BrandZ™ Top 10 beer brands that increased most in being perceived as Meaningful over 12 years—Stella Artois and Heineken—also increased significantly in value at 389% and 252% respectively, during that period. The Stella Artois chalice made drinking the beer a distinctive experience and an alternate to wine when paired with food. Extensive global sports sponsorships reinforced Heineken’s Salience and reputation as a premium imported brand.

Heineken And Stella Artois

Source: Kantar Millward Brown, Kantar Worldpanel

Editor's notes

* This article is edited based on the content from page 178 - 185. Intern Gretchen Yuan also contributes to this article;

* The BrandZ Top 100 Most Valuable Global Brands report and rankings, and a great deal more brand insight for key regions of the world and 14 market sectors, are available online here ;

* To reach the author, or to know more information, data and analysis of brand consultancy in China and other parts of the world, please contact us.

* Please subscribe to our newsletter to receive news alerts.


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