E-Malt.com News article: 1152

“Think globally, brand locally.” That's the credo of John Brock, chief executive of Belgian brewing force Interbrew SA, the world's third-largest brewer of beer. Unlike its major competitors, Heineken and Anheuser Busch, which are known for their global brand names, the Belgium-based Interbrew plans to continue focusing on its cache of some 200 domestic brands in the 120 countries where it sells beer, according to Brock. Those products include 67 Canadian brands brewed by Labatt Breweries, which Interbrew purchased in 1995. "In Canada and the world it's local brands that make our business tick," Brock told 300 diners at the Sheraton Centre. "We tailor what we do to apply in each local economy."

Brock, who took over Interbrew in February after leaving a chief operating position at Cadbury Shweppes PLC, said the approach makes sense because unlike such truly global brands as McDonalds, Coca-Cola and Nike, the company's market research has shown beer drinkers respond better to products with local character.

An example is Interbrew's recent foray into the Russian market, considered by the company to have high growth potential, where a television campaign as Russian as Don Cherry is Canadian was used to elevate a relatively unknown local beer, Tolstiak, into a national brand. Interbrew's marketing direction was set out a decade ago when it embarked on a period of rapid growth.

Among the exceptions to Interbrew's local branding strategy are the company's two flagship beers, Belgium's Stella Artois and Germany's Beck's, which was purchased for about $1.6 billion (U.S.) in 2001. Both are advertised globally and have been introduced to local markets "to augment, rather than replace, local brands." In Stella's case, the beverage is marketed as a "European heritage beer."

The downside, however, has been the cost of pursuing such a large-scale acquisition strategy, which has left some analysts wondering whether the company was paying enough attention to the brands it already owned.

In March, Interbrew posted a 39 % drop in profits for its second half as net income fell to 302 million euros, or about $475 million (Canadian), from 496 million euros in the year-earlier period.


30 May, 2003