USA: Peroni Nastro Azzurro launches ambitious marketing campaign to gain more imported beer market share

While nearly all of the growth in imported beer comes from Mexican brands like Modelo Especial, Dos Equis, and Pacifico, Italian beer brand Peroni Nastro Azzurro has launched an ambitious marketing campaign to set itself up as a leader for the rest of the import category. The brand, owned by Molson Coors Beverage Company, has set a short-term goal of doubling volume by 2025 and a pie-in-the-sky, long-term hope of becoming a 1-million-barrel brand in the U.S, the Good Beer Hunting reported on April 22.

Thanks to a well-funded marketing effort and distribution into new locations, Peroni did double its sales volume from 2017-2021, but would need to increase at a rate reserved for the fastest-growing brands in the country to double again between 2021-2025. The brand would also need to sell 10 times more beer than it currently does to reach 1 million BBLs. Drinkers bought about 93,000 BBLs of Peroni in 2021 through chain retail, and the company says about 40% of volume additionally comes from draft sales.

Still, these goals represent a serious effort to capitalize on interest in imports beyond Mexican Lager. Peroni’s growth would likely come at the expense of its major European beer competitors such as the Belgium-headquartered Stella Artois and Netherlands-brewed Heineken, both of which saw chain retail sales decline in 2021 while Peroni’s sales in those stores were essentially flat. (As of the end of last year, all Stella Artois sold in the U.S. is brewed by Anheuser-Busch InBev in American facilities while “stay[ing] true to the time-honored Belgian recipe.”)

This year will also see the launch of Peroni 0.0, a non-alcoholic beer already available in Europe, that will naturally compete with Heineken 0.0, the best-selling non-alcoholic beer in the U.S. This addition will presumably add incremental volume to Peroni’s portfolio, and further put it into direct competition with rival European brand Heineken.

But given the massive differences in scale between itself and competitors, Peroni is still a puppy nipping at the big dogs’ heels:

Heineken’s year-to-date packaged sales are 30 times as large as Peroni’s. Stella Artois’ are nine times as large.

As of April 3, Peroni earned $13 million in chain retail sales, compared to Stella Artois’ $113 million and Heineken’s $386 million.

Peroni can’t even begin to take on Mexican imports, though it can hope to chip away at other European beer brands’ leads.

According to Cara Lauritzen, Peroni’s senior marketing manager, Peroni will continue to emphasize its Italian heritage and ingredients (it’s brewed with Nostrano dell'Isola maize grown in northern Italy) to convey sophistication and a premium product. It’s generally priced in line with Heineken and Stella Artois:

Online listings for Target show Peroni priced at $9.99 and both Heineken and Stella at $10.99 for a six-pack.

In Chicago, Drizly places all three at $10.99 per six-pack.

That puts Peroni at the same price as six-packs of Revolution Brewing’s Anti-Hero IPA, two dollars less than six-packs of White Claw Black Cherry Hard Seltzer, and three dollars less than four-packs of Cutwater Tequila Margarita, based on the Drizly listings.

Peroni’s new marketing campaign called “Live Every Moment” leans into what Lauritzen calls an “aspirational” and “transportative” vision of the Amalfi Coast, a luxury tourism destination in Italy. She says Stella Artois and Heineken have moved away from their European heritage in an effort to become “more mainstream” in the U.S.

Indeed, Stella Artois’ most recent Super Bowl commercial featured crowded U.S. streets, and didn’t have as much of a luxury European emphasis as past years’ ads. Digital ads for Stella have starred famous National Football League players like Eli Manning, Ryan Clark, and Dan Marino. For its part, Heineken is regularly confused for a German beer when it is in fact brewed in the Netherlands. The brand’s recent digital and TV ads also forgo explicit European references, instead featuring racially diverse casts in generic urban settings.

Craig Alperowitz, owner of Bolide Communications, a digital marketing and communications firm whose clients include several imported beer brands, says Heineken and Stella Artois have a tough battle in conveying to U.S. drinkers what the Netherlands or even Belgium represents. Italy, however, is a more salient cultural touchpoint for the estimated 16 million Americans of Italian ancestry, as well as countless more who have vacationed in Italy.

“I don’t think people grab a bottle that says ‘imported from Belgium’ or ‘imported from Holland’ and think, ‘Oh I remember my time in Belgium or Holland,’” Alperowitz says. “Italy brings the romance because you’ve either heard of it [as a vacation destination], seen it, or been there and can’t wait to go back.”

Long before craft beer became mainstream, import brands were successfully marketed as premium, sophisticated upgrades from domestically produced brands such as Budweiser or Coors. But now given the plethora of other upscale options, from craft beer to canned cocktails, the question remains whether European beer carries the same cachet it once did.

The million-barrel question for Peroni will be whether U.S. drinkers still associate the concept of European beer with refinement and trendiness, and if they’re willing to give up other brands for a European Lager. A million barrels annually is rarified air: That would put Peroni at roughly the same output as Sierra Nevada Brewing Co. Fellow craft beer stalwart New Belgium Brewing Co. didn’t cross the one-million-barrel mark until 2021, thanks to the runaway success of its Voodoo Ranger line, the best-selling IPA in the U.S.

The million-barrel goal strikes Alperowitz as “maybe a little overambitious” within European imports, “a category that’s not necessarily growing, while beer itself is flat.” He believes that Peroni has an authentically Italian story to tell that could draw drinkers over from other European brands, but it has to stay evenly priced with those competitors. In this case, it’s as important to convey cultural heritage as it is to offer the right cost/benefit ratio for consumers.

“[Peroni] is still an uber-premium beverage in that world, but boy they better not be more expensive [than Stella or Heineken] because I believe people will trade off very quickly,” Alperowitz says.

But he offers another explanation for Peroni’s lofty goal of doubling sales volume in three years: catching the eye of distributors and retailers and convincing them that Molson Coors is investing in the brand.

“One of the possible reasons they’re so bullish is it gets the distributors and the retailers really on board,” he says. “It doesn’t matter what happens in 2025; it matters what happens in 2022. This shows distributors: We’re putting the ammo behind it and we need your support behind it, too.”

Before the COVID-19 pandemic, roughly 40% of Peroni sales in the U.S. came from bars and restaurants, as opposed to packaged sales in grocery or liquor stores. (That same percentage is true for Stella Artois, according to Marketing Dive.) Because the pandemic dealt such a significant blow to bars and restaurants, Lauritzen says draft beer hasn’t yet returned to that 40% share, though it is recovering. Nationally though, CGA’s BeverageTrak data shows sales velocity at bars and restaurants has well outpaced its 2019 levels since mid-February, indicating that Peroni’s draft sales may be lagging behind larger trends.

Partially offsetting those losses, though, annual packaged sales of Peroni grew +47% in 2019 and +23% in 2020, then remained flat last year at $47 million. That growth came with significant marketing investment from Molson Coors in both 2019 (a doubling of its marketing budget from the year prior) and 2020 (online and TV ads, plus official beer sponsorship of ESPN’s ESPY Awards).

The goal moving forward, says Lauritzen, will be to continue to grow packaged beer sales by double-digit percentages as draft beer slowly returns to pre-pandemic levels. Peroni has set a goal of growing overall volume by 30% by the end of 2022. Peroni declined to set an actual barrel goal for this growth, but based on chain sales data, 30% growth would represent an increase of 10,000–15,000 BBLs in packaged and draft sales this year.

To do that, it aims to gain share from category leaders Heineken and Stella Artois. Lauritzen says Peroni can distinguish itself as more authentically European than those brands, intending to pick off tap handles that may have previously belonged to them. This is no easy feat, though, given that major rival Stella Artois belongs to distributors owned or aligned with Molson Coors’ rival Anheuser-Busch InBev. Achieving on-premise goals in bars or restaurants could create a messy situation:

A bar or restaurant doesn’t replace one distributor’s main import brand with that of its rival without potentially upsetting a wholesaler and/or receiving plenty of pushback from the wholesaler who stands to lose a draft placement.

Heineken, meanwhile, is generally distributed by Molson Coors-aligned wholesalers, so it’s conceivable that Molson Coors would, given the choice, not mind it being replaced by Peroni, a brand it owns outright.

Italian restaurants have long been strong retail partners for Peroni. For example, it’s the number-one imported beer sold in Carrabba’s Italian Grill and the number-two-selling draft beer overall (Carrabba’s declined to name the top-selling beer). At Carrabba’s 219 national locations, a company spokesperson says Peroni appeals to drinkers who may not be used to seeing an imported Italian beer on draft at other restaurants or bars.

“It’s a brand known and trusted by our guests, yet it is something that many times is a unique offering in the casual dining space,” says Becky Boyd, Carrabba’s director of beverage. “We still have a great blend of guests that regularly order a Peroni and those that are trying an Italian beer for the first time.”

Mexican imports, Lauritzen says, are a distinct category that Peroni doesn’t directly compete against. Sales of Modelo, Corona, Pacifico and others are orders of magnitude larger than Peroni’s: Year-to-date, Peroni accounts for 0.5% of all imported beer sales in U.S. chain retail, while Mexican imports account for 73%.

“I would classify [Mexican imports] as something altogether different,” she says. “Your Modelos of the world are stealing share from everyone. … I think we’re much more focused on winning within the European imports category. There’s plenty of runway in that space specifically.”

Drinkers choose a brand like Peroni, she says, for its “badge value”—essentially the idea of conspicuous consumption in which people want to be seen holding a certain beer brand. But maintaining badge value is becoming more difficult for imported beer brands across the board, as other categories of alcohol such as craft beer and canned cocktails deliver premium experiences that especially appeal to younger legal-age drinkers. For example, a Brewers Association/Nielsen survey from 2021 found that a greater percentage of 21-34-year old drinkers who regularly consume craft beer also drink spirits, wine, and domestic beer than do imported beer.

But it seems Peroni’s goal is not to take on those other categories, instead seeking only to increase its share within European imports. Lauritzen says that as Heineken and Stella Artois “become more and more mainstream, we’re staying elevated and differentiated.” It’s an open question, though, whether that’s enough to achieve the huge volume gains Peroni seeks.

Alperowitz says it would take “a lot more than just marketing” for Peroni to double its volume within the next three years, given that European brands themselves aren’t growing their share of the import category.

“I don’t think you can advertise your way there,” he says.

Lauritzen wants to see Peroni make inroads beyond Italian-focused restaurants to “stylish, higher-end” accounts like rooftop bars. She describes Peroni’s target drinker as a 25-39-year-old who is exploratory in their food and beverage choices—the person in a group of friends that everyone looks to for restaurant recommendations and the latest cocktail trends.

But this trend-setting, curious drinker that Lauritzen describes is also, by definition, fickle. McKinsey & Co. research found that the pandemic only accelerated brand switching, especially among Gen Z and millennial shoppers who traded familiar brands for new ones during this period of disruption. For example, Hard MTN DEW has sold roughly as much year-to-date in chain stores ($6.2 million) as New Glarus’ Spotted Cow has in chain stores.

Among a wave of new ready-to-drink cocktails (RTDs) and other “beyond beer” products, it’s harder than ever for existing brands to not just retain but attract new loyal drinkers. A massive part of the appeal of hard seltzers, RTDs, and beer alternatives like Hard MTN Dew or ranch water is that they’re novel and uniquely flavored; Peroni—however well-made—tastes like traditional beer. To keep drinkers’ attention (and potentially fend off competition from spirits-based cocktails), Peroni has worked with bartenders to create cocktail recipes featuring the beer that are shared on the brand’s Instagram account.

As its marketing campaign rolls out and reaches new drinkers, a goal for the brand is to overcome its relatively small size within the import category. Peroni says research shows only 25% of consumers in the U.S. are aware of the brand, but increasing interest among consumers has to come in tandem with more placements in grocery stores and bars, too.

“I think just our size is a piece of [the challenge],” Lauritzen says. “We have plans to grow that awareness and to make sure that we have the distribution as well. I want consumers to be able to see a Peroni ad and then be able to go to a store or hop on Drizly and buy it.”

24 April, 2022