The three primary competitors of Diageo are Anheuser-Busch InBev (BUD), Molson Coors (TAP), and SABMiller (SBMRY). Two of these giants announced their consolidation this October. In 2014, the American brewing company AB InBev was in control of 30% of the market. They produce, import and distribute Budweiser, Stella Artois, Beck’s, Corona, Leffe and Hoegaarden. The company also produces domestic brands such as Bud Light, Busch, Michelob and Shock Top and many others.
Even though Diageo is the world’s largest producer of spirits and a major player for beer and wine, beer is not their number one commodity. This helps the competitions and could hurt GUINNESS® since many of the competing multinational conglomerates specialize more on beer products. A shared strength with Diageo is that their size and revenue allows them to survive price hikes on resources (i.e. fossil fuels and water) needed for production and distribution and on essential brewing ingredients like barley.
The secondary and somewhat unexpected competitors of Diageo are independent brewers. In the 1980s, 200 independent breweries existed in the U.S. In 2014 that number rose to 1,600 and more are coming to life. In 2014 craft brewers made up 10% of the beer market in the U.S. Ten years ago they only had 3% of the market. New global attitudes and desires for locally produced goods and innovative tastes gives strength to the craft brewers.
One pitfall for these smaller companies is that they may suffer when there are shortages of the production ingredients. Low acreage and bad weather can force the price of craft brews up. There is an impending shortage of barley. In 1942, barley acreage was 17 million and in 2014 it was only just over three million acres. Prices to buy barley will skyrocket and small breweries may not be able to survive. Bad weather in Canada, the second largest exporter of malting barley, has added to the shortage. Icy weather freezes and destroys crops.
The Marketing activities of the competition
For the purposes of length, I will focus on the activities of the largest beer producer, AB InBev. They invest most of their marketing money on their more popular brands which they call their “Focus Brands”. These brands are broken down into three categories:
Global brands
- Budweiser – is positioned as “The King of Beers” and the great American Lager and has won awards and brand loyalty for their iconic advertisements. Other slogans have been “This Bud’s for you” and “Best buds”. Their mascot is the Clydesdale Horse which feature on the branding.It is also the official beer sponsor for the Super Bowl. Budweiser has moved two place up to 33rd on the BRANDZTM top 100 most valuable global brands of 2015. Brand value is estimated at 26,657m US dollars, a 9% increase in value from 2014. It is the only beer listed. http://www.millwardbrown.com/BrandZ/2015/Global/2015_BrandZ_Top100_Chart.pdf
- Corona – is positioned as a fun and relaxing beer. It is the leading brand in Mexico, the fourth most valuable brand worldwide and stands for “Mexican Pride”.
- Stella Artois – has Belgian roots and focuses on heritage and the ritual much like GUINNESS. The positioning is one of tasteful sophistication. It has a nine-step pouring ritual and talks flavour too.
International brands
- Beck’s – is the number one German beer and found in more than 80 countries. The positioning for this brew is that of uncompromising quality. They have not changed the recipe and have only had 6 brew masters in its 125 year history. The branding of the site currently features urban inspired street art graphics to promote their current campaign called Beck’s Urban Canvas. Beck’s has commissioned murals and installations from artists and creators around the world to be made and displayed in some creative communities of Miami.
- Hoegaarden – This authentic Belgian white/wheat beer is positioned as “totally different – by nature”. Its unique brewing process is very complex and the outcome is a refreshing cloudy-white brew. The website also focuses on it’s heritage and the complexity of the recipe.
- Leffe – This brew is an abbey beer originally produced by monks and known for its full-bodied and rich flavour. It is positioned as the brew that “makes the extraordinary, just perfect” and a social beer to bring people together for special moments. The community of monks was known by its hospitality. Left’s website looks similar in colour scheme to GUINNESS with Buff and Dark Colours. It is also similar in that it tells the story of the beers heritage and focusses on the quality and unique aspects of each beer.
Local champions
- Bud light – This is the best selling beer in the US. It is positioned for its drinkability and refreshing flavour. Bud light is the official beer sponsor of the NFL. They are running a campaign cleverly called #MyTeamCan. Bud Light is now available in cans designed with the colours and mascots of NFL teams. People are encouraged to share photos of their preferred can/team via Twitter and Facebook using the custom hashtag.
- Michelob Ultra – falls into the superior light beer category. It is positioned as the beer for people with active, healthy lifestyles. #LIVEULTRA in all caps is a custom hashtag and Michelop sponsors running and cycling races, golf tours and tennis tours. It is the official beer sponsor of the PGA tour.
- Skol – Sociable, innovative, always among friends are the words used to describe this beer in the marketing strategy. It is the most popular beer in Brazil. The website features world music and has a friendly, cheerful colour.
- There are many more Local Champion beers in AB InBev’s portfolio including Brahma, Antarctica, Qualms, Jupiter, Victoria, Modelo Especial, Klinskoye, Sibirskaya Korona (Siberian Crown), Chernigivske, Harbin, Sedrin, and Cass
All of these competitors have their own website outside of the main AB InBev site most of which are modern, clean and easy to navigate. They each have ID checks in order to browse. The visitor must be of legal drinking age to enter the sites.
The secondary competition, craft beers, take a much different approach to marketing than the global giants. people do not accept push-style, mainstream marketing here. Customers want to think finding the beer was just as special as each unique and innovative brew. Authenticity is important for craft beer and the marketing must align with that. Therefore, they focus more on creativity than on high-cost, super-bowl style advertisement.
One successful craft brand is BrewDog, founded by James Watt and Martin Dickie in Scotland in 2007. It is known for brewing the world’s strongest beer and using odd approaches to the production, like brewing at the bottom of the ocean. In Summer 2015, BrewDog parachuted beers over London from a helicopter. The company also has a TV show called Brew Dogs, in which the two founders go on beer-related excursions. Smaller companies have to think differently and concentrate on the customer relationship while making an impact in creative ways. Both BrewDog and the Californian craft beer company called Stone Brewing Co. have punk style appeal and position themselves as the outsider or rebel of the market. Camden Town Brewery and Brooklyn Brewery also have similar logo styles and approaches. They want to fit in with rather than push out other brews.