Global thirst, local flavour
Building strong local brands is a cornerstone of SAB Miller’s success in the global beer market – and insight plays a crucial role, says marketing director Nick Fell. By Jane Simms.
In May 1983, Ted Levitt, editor of the Harvard Business Review wrote one of the first articles to popularise the notion of globalisation. He argued that as markets were globalising – and, by extension, homogenising – then the companies that globalised their brands accordingly would steal a march over their more local competitors.
So influential was his thinking that, over the past 30 years, many organisations have tried to build monolithic global brands to take advantage of the “inevitable” trend. Companies including Coca-Cola, McDonald’s, Unilever, Levi-Strauss, Vodafone and Heineken have pursued the global brand route – at various points crushing local cultural and taste differences to fit the theory. City analysts piled onto the bandwagon too.
But while a handful of companies have made a success of the strategy, many others have had to adapt their approach as it became clear that the growing demand by consumers for international brands was neither as inevitable nor as inexorable as Levitt predicted. A handful were sceptical from the outset. SABMiller was one of them because, in the words of its recently retired chief executive, Graham Mackay: “Beer is different.”
Mackay believes that the highly emotional characteristics of beer brands, combined with their long history and association with place, will always dictate a high degree of localism that sets them apart in the fast moving consumer goods universe. There are very successful global brands, of course, and SABMiller itself has four – Grolsch, Peroni Nastro Azzuro, Pilsner Urquell and Miller Genuine Draft. But these account for just three per cent of SABMiller’s total sales volumes.
The company’s results – sales and profits grew by 10% per cent and 12% per cent respectively in the year 2012-2013 – appear to vindicate its approach. Mackay sums this up as follows: “While much of the consumer goods industry is focused on identifying how everyone is the same, SABMiller is trying to work out how everyone is different.”
The company’s 80-strong research and insight team plays a huge part in helping the company to discern those differences.