E-Malt.com News article: World: AB InBev starts selling Bud in Ukraine as part of strategy to turn the brand into a global powerhouse

Budweiser's next stop is Ukraine, where AB InBev will continue its push to turn the classic American brew into a global powerhouse on the scale of Coca-Cola, AdAge reported on April, 12.

Bud has begun hitting shelves this week in the eastern European nation, designated as one of eight "focus" markets for the brew, which is now sold in 86 countries, it is reported. The debut follows other big Bud launches in priority markets, including Brazil late last year and Russia in 2010.

Bud's march across the globe is noteworthy because beer is one of the few categories where big international brands have struggled to take hold. Consider that the largest beer brand by market share is Snow, at 5%, and that it is sold only in China, according to Euromonitor International. The top soft drink, by contrast, is Coca-Cola, which has a 25% share and is sold in 206 countries.

"History suggests it's pretty tough to create a truly global beer brand," said Mark Swartzberg, a financial analyst who covers AB InBev for Stifel Nicolaus. "There are very few examples of such an animal."

Creating that beast is a major priority for AB InBev, which was formed in 2008 by Belgium-based InBev's acquisition of U.S.-based Anheuser Busch. The brewer, which ranks as the world's 44th-largest advertiser, according to the Ad Age DataCenter, is pouring significant resources into selling Bud in every corner of the world. And as Bud travels, it is essentially using the same marketing message, marked by the "Grab Some Buds" tagline created by lead agency Anomaly, New York.

AB InBev's uniform approach contrasts with top competitor SABMiller, which emphasizes regional brands with advertising that plays on local customs and cultures. "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," SABMiller Marketing Director Nick Fell told Ad Age in a 2010 interview.

But the early evidence suggests promise for Bud. Global volume grew by 3.1% last year on a 1.7% jump in 2010, which marked the first positive international growth for the brand in many years, according to AB InBev. In 2011, Bud had 1.9% global market share, ranking it No. 5 globally behind Snow, Bud Light, Tsingtao and Skol. But those brands get most of their volume in their home countries, according to Euromonitor International. (Heineken, which is sold in 172 countries, ranks eighth with a 1.4% share.)

Bud now gets 44% of sales from outside the U.S., vs. 28% just three years ago. While its overseas fortunes are rising, though, Bud has been stuck in a long-running decline stateside. Domestic shipments fell 4.6% in 2011, and market share dropped to 8.4%, according to Beer Marketer's Insights. The brand was passed by Coors Light as the nation's No. 2 beer, an embarrassing hit for the so-called King of Beers. AB InBev points to Bud's improving trends in the U.S., noting that the rate of decline has been cut in half, which it attributes partly to its new focus on younger drinkers.

Globally, AB InBev thinks Bud stands apart because it is so well known, even in countries where it is not yet sold, including Ukraine. "It would take most companies probably a year of media investment to get to the level of awareness that we already have for a product that's never been launched there," Jason Warner, global VP-Budweiser, said in an interview in which he outlined the brand's global marketing strategy. "And that's because of the iconography and the scale of a brand like Budweiser and the fact that it's seen in Hollywood films, it's seen in popular culture and it travels."

In short, Bud is selling the American dream, or at least one version of it: celebration and optimism. Thus the tagline, "Great Times Are Waiting. Grab Some Buds." The positioning came from what Mr. Warner described as an exhaustive study conducted in about a dozen countries in 2009. "What's powerful about the American Dream in a way is that it's a basic human dream that everybody has around the world," he said. "But in America you can live that dream. So for Budweiser to pick up that mantle and take over the reins on celebration and optimism, and to cast that light around the world, was really powerful."

Lofty aspirations for a beer brand? Sounds like it. But Bud tries to ground it in a more simple truth that "grabbing a beer," or in this case "grabbing some Buds," is universal language for "let's be friends." Mr. Warner described it as a great "social equalizer" in any language. "If your boss asks you to go grab a beer, it's like great ... because they are no longer your boss, you're just sitting around having a beer."

When picking new strategic markets, AB InBev looks for places where it already has a significant presence with other brands, allowing it to tap into an established distribution pipeline. Bud is also brewed locally in some cases, including in Ukraine, although some quantities - such as Bud sold in aluminum bottles - are shipped from the U.S. In Ukraine, subsidiary SUN InBev has 3,000 employees and leads the market with 36.7% share, including sales for Stella Artois and Beck's. The brewer also owns local brand Chernigivske, the No. 1 Ukrainian brew with 10.7% share, which is advertised as the national brand, thanks to its support of the Ukrainian football (soccer) team, according to a recent Euromonitor report. Still, the report noted that Ukrainians have a "bias" for Western brands, which could fuel new product launches, including premium brands - all factors that could help Bud, which is usually considered upscale overseas.


18 April, 2012