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TRANSCRIPT
Beer Industry
Jordan Dowiak, Dani Freedman, Sarah Knee, Marshall Peters
Agenda● History● Industry Analysis● Advertising Strategies● Raw Data Analysis● Final Recommendations
“A fine beer may be judged with only one sip, but it’s better to be thoroughly sure” - Czech Proverb
Why the Beer Industry?● Popular drink amongst college students
○ Incentive to understand the industry
● Niche markets being introduced○ Craft Beers
● Highly competitive● Unique advertising strategies
○ Advertising spending up 400% over last four decades
Brief History● Unclear of exactly who discovered beer or how the process
was discovered● 3900 years ago in Mesopotamia
○ “Gift from God”
● Egyptians, Greeks, and Romans followed● Beer was an extremely common beverage
○ Safer than water
● Catholic Church got involved and was instrumental○ Monks were master brewers
● 1800s brought advancement - 3200 breweries in US by 1880
Prohibition● 18th Amendment brought
into effect prohibition in 1920
● Ended in 1933● By 1935 there were only
about 160 breweries in operation in the US○ Over 3,000 operating
a mere 5 decades before
Brief History (cont.)● WW2 lead to the brewing of “lighter” beers● Women found it more appealing ● After WW2 ended, both heavy and light beers stayed
popular● Breweries were quick to exploit this new market● New “craft beer” market
○ 12.3% volume of total beer market
● Today’s beer drinkers are spoiled with options
Supply Chain
Who are the Major Players?
Market Share
Perceptual Map
Low Quality
High Quality
Affordable
Expensive
Competition● HHI = 2050
● CR4 = 75%
● Top companies take up most of the market share
● Barriers to entry high
US MarketAB/InBev Brands
● Budweiser● Bud Light● Becks● Stella Artois
MillerCoors Brands● Miller ● Coors● Keystone● Blue Moon
Constellation Brands
● Corona● Modelo
Heineken USA● Heineken ● Dos Equis● Tecate
US Market● Bud Light is the most popular
beer in the US
● Light beer is significantly more popular in the US than other parts of the world
● According to beer connoisseurs, the US has a “bad” taste in beer
Advertising Restrictions● Highly regulated● 70% of audience must be of legal drinking age (USA)
○ Based on reliable audience data
● Ad content should not attempt to appeal to people under 21
● Beer cannot actually be consumed in advertisement● Not allowed whatsoever in some countries
Advertising Restrictions● Shall not create impression beer leads to social or
sexual success● Shall not claim that beer has any therapeutic qualities● Shall not encourage excessive drinking ● Cannot place emphasis on higher alcohol content
Advertising Strategies
Target Market● Men ages 21-49 drink the
most○ 55% of men say beer is
their alcohol of choice
○ 52% of women prefer wine○ White men drink the most
● Sports fans
Craft Beer Target Market● Older market (35-49 year
olds)● White male● Organic foods● Higher education levels● Passionate about beer
taste○ Drink in moderation
Persuasive Advertising
Product Placement● Becoming
increasingly popular
● People can be seen drinking in movies/TV
● Reach a large audience
Fast and Furious
Celebrity Advertisements & Humor Appeals2016 “Bud Light Party”
Comparative Advertising● MillerCoors and
Anheuser-Busch○ Fierce
competitors● Miller Lite vs. Bud
Light
Miller Lite vs. Bud Light2008 2016
“Why not raise the right one, miller lite has more taste and half carbs”
Informative Advertising
● Calorie Content ○ Light Beer○ Healthy○ Active
Sponsorships
Activation Campaigns - BudweiserMusic - Anheuser busch has 29% of Music Sponsorships
2016 Advertising Spending AD to Sales:
Ab/InBev: 3.57%SAbMIller:5.39%Heineken: 10.14%
INdustry Wide: 3.7%
Data Analysis
OVerview1. Analysis of Total Advertising Data in 2008-09 and
Prime-time Advertising Data in 2014○ Industry Trends
2. Investigation of Two Major Players○ Anheuser-Busch○ SABmiller
Type of Program Distribution
● Majority of advertising is focused on sports, especially professional football
TIME OF DAY Distribution
● Advertising is focused primarily on prime-time, late fringe, and overnight time periods
Day of Week distribution
● Advertising is focused primarily on weekends during sporting events
Monthly Distribution
● Majority of ads are during college and pro football seasons● June ads are during NBA Finals
Total Ad Expenditure per Parent companyTwo Major Players
1. Anheuser-Buscha. Budweiserb. Bud Light
2. SABMillera. Coors Lightb. Miller Fortune
Top Advertisers by Dollars Spent
Spending by Brand and beer quality
● Anheuser-Busch and SABMiller both spend more on lighter quality beers relative to heavier quality
Miller Fortune: Beer for Spirited Nights
● Persuasive, emotional appeal of being cool, fashionable
● Stylish Celebrity: Mark Strong● Dialogue in night time setting● Aim: Miller Fortune is the
fashionable beer to drink while out at night
Top Creatives Aired: Heavier Quality BeersBudweiser: Hero’s Welcome
● Persuasive, emotional appeal● Very little dialogue● Heart-warming music in background● Aim: Budweiser is the ultimate
American beer for the hard-working middle class American
Coors Light: Cold Refreshment Calls
● Persuasive and Informative advertising● “When cool refreshment calls” slogan● Exaggerated cool refreshment, straight
from an avalanche● Celebrity appearance: Jason Aldean● Aim: When you’re thirsty and want a
beer, drink cold Coors Light
Top Creatives Aired: Lighter Quality BeersBud Light: Alex Loves Buccaneers
● Humor and fan engagement● Persuasive Advertising● “Up for whatever” slogan● Explosion of cannons, laughing, fun● Aim: Bud Light is the beer to drink
on game day
Recommendations: Competition with Craft Beer How can bigger brands be more competitive with craft beer?
- Use informative & persuasive- Appeal to qualities of the target market most (i.e.
taste)- Celebrity may not work as well
RecommendationsHow can advertisers better reach college-aged adults who are watching less TV?
Recommendations: Increased Social Media● Advertisers should increase social
media engagement○ More ads on Facebook, Instagram, Twitter
● Should focus on lighter beers in social media engagement to tailor to college-aged demographic
○ Cost: want inexpensive beer○ Taste: want relatively good-tasting for
price○ Appeal: want to seem cool drinking it
Recommendations: Anheuser-Busch-Miller merger ● The two recently merged companies should take advantage
of their newly combined market share● Ads should be more informative than combative
Thank you FOr ListeningQuestions?