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find new increment in the old market and people in the new market.
In 2008, the American media reported a news that the throne of the world’s largest beer sales was occupied by snow beer from China. The news caused an uproar among American consumers, who have hardly heard of this brand, because in fact, most of the sales of snowflake beer come from China.
Budweiser light beer and Budweiser beer, the first and second place dragged down by snowflake from the list, are the Sales Champions familiar to Americans.
Budweiser brand was born in the United States. Later, it was acquired by Belgian enterprises and merged into Budweiser InBev. Budweiser is estimated to have been heard of, but few people know that the group also has a series of brands that sound like China’s local brands, such as Harbin beer, Yandangshan beer and Nanchang beer.
▲ Budweiser InBev brand family
Since 2013, China’s beer market has entered the stock era, with relatively stable or even shrinking annual sales. The competition pattern has gradually formed a stable monopoly situation of domestic xueqingyan and imported Budweiser and garbers.
The five giants are now facing the same two problems: first, each major brand is based on one side, but it is unable to break through the region to obtain national increment; Second, the number of school-age consumers is declining, it is difficult to find new increments, and even the stock is gradually shrinking.
In fact, Budweiser experienced a round of these problems in the U.S. market decades ago. Its failure and successful experience are of great reference value to today.
incremental market: from local to national
From regional brands to national beer, Budweiser has completed two steps in 100 years, evolving product power and brand power respectively.
Budweiser beer was born in the United States in the late 19th century. At that time, fresh beer contained yeasts and miscellaneous bacteria. The preservation period at room temperature was only about 3 days, which determined that its transportation radius was short and it could not go out of the city. Therefore, each place had its own characteristic breweries and separate regimes.
In order to make beer that can last for a long time, Budweiser has been studying the preservation technology, and finally found two magic weapons in the early 20th century. One is to build the most primitive cold chain with train + ice, and the other is to use pasteurization, so as to extend the shelf life to more than 90 days.
Although we have long been accustomed to the terms cold chain and pasteurization, and even think pasteurization is the culprit leading to the weakening of beer flavor, Budweiser was the first enterprise to apply these two methods to beer and even food more than 100 years ago, earlier than milk, so it immediately has the ability to launch nationwide.
However, the ability of empty products is not enough. In order to make Budweiser a national beer, we must also establish consumers’ emotional recognition of the brand. At this time, Budweiser’s marketing skills are shown.
Since the 1970s, the group of heavy beer consumers in the United States has gradually changed and began to concentrate on the blue collar working class of men aged 18-24.
▲ from 1960 to 1980, the proportion of main consumers increased
Therefore, in order to cater to these consumers, since 1978, Budweiser has set its marketing target as conscientious workers. In the advertisement, people from all walks of life open a bottle of cool Budweiser beer to reward themselves after a day’s work. Then came the slogan “Budweiser, pay tribute to everything you give”.
In the 18 months after the first advertisement was broadcast, Budweiser beer sales increased by 50-80% and sold an additional 10 million barrels of beer. Later, this advertising series has been used for 10 years. Throughout the 1980s, Budweiser’s market share in the United States increased from 28% to 41%, and its net profit margin increased from 5% to 10%, becoming the leader of the American beer industry.
In 1988, Budweiser cooperated with the American Red Cross in order to further strengthen the emotional connection with consumers. Due to climate reasons, hurricane disasters often occur in the southeastern coastal areas of the United States, and tornadoes and floods are common in the Midwest, affecting the water use of surrounding residents. Therefore, Budweiser announced that two breweries in Georgia and Colorado will stop production regularly every year and switch the beer production line to drinking water line to provide emergency drinking water for disaster areas in the United States.
Therefore, the flood in Kentucky in 1997, Hurricane Katrina in 2005, and even category IV hurricane Laura in 2020. In some disasters, the American police ran away, but Budweiser was still there. This is the water bottle delivered by Budweiser after Hurricane Katrina. It has been collected by the New Orleans Museum. With Budweiser’s logo, it has been well liked by the American people.
▲ collected Budweiser drinking water tank
So, to sum up, Budweiser’s process from regional to national relies on the technological innovation of cold chain and pasteurization to complete the national launch of products, then carries out precision marketing for the group of migrant workers, and finally wins the favor of the American people through disaster relief, becoming a real national brand in the eyes of Americans.
Stock market: looking for a new continent
However, after winning half of the American beer market, Budweiser has ushered in an opponent that it almost killed a hundred years ago, that is, refined beer.
Let’s briefly introduce the difference between fine brewing and industrial beer.
Fine brewed beer only uses hops and malt as raw materials. After two months of deep fermentation, it is not sterilized or filtered. Therefore, the brewed beer has rich and rich taste, and the degree can be as high as 10 degrees or even 20 degrees.
The industrial beer represented by Budweiser uses rice, corn or starch to replace expensive malt. It only ferments for one week, and needs to be filtered and pasteurized before transportation. Therefore, the wort and flavor substances are relatively few, the taste is very light, there are more fusels, and the process is not good, so it is easy to get started.
Some time ago, the deadly big Wusu was actually a bottle of nsnm because there were too many fusels and acetaldehyde caused by raw materials and processes.
Therefore, the difference between refined beer and industrial beer is far from earth.
Budweiser was able to brew beer in batches and sell it to all parts of the United States, making it impossible for local breweries to survive. It relied on its first industrial beer production method, which is cheap, efficient and easy to preserve, so that consumers everywhere can drink beer with stable quality.
But now, a hundred years later, industrial brewing technology has been fully popularized. Instead, consumers are tired of the same taste thousands of times and begin to pursue more unique tastes.
Therefore, the refined beer with strong flavor is favored again and carve up the market of industrial beer giants. From 2007 to 2012, the annual sales volume of the top ten industrial beer brands in the United States decreased by 8.1%, corresponding to the flowering of fine brewing factories, with the number reaching an all-time peak.
Budweiser also struggled. In 2006, it acquired 42% of the shares of a local fine brewing brand in Chicago, but because its image of “industrial beer big brother” was too popular at that time, this move not only failed to restore its image, but also aroused the collective anger of fine brewing lovers. The American brewing Association announced that it had removed all three fine brewing brands acquired by Budweiser over the past ten years from its fine brewing list. It can be said that stealing chicken can not eat rice.
In 2008, Anheuser Busch, the mismanaged parent company of Budweiser, sold to Belgian brewing giant InBev on the condition that the family name would still be retained, so there is now Anheuser Busch InBev, a beer giant.
Before the acquisition, although Budweiser’s parent company had entered China for 13 years and had made equity investments in local brands such as Tsingtao beer and Harbin beer, the sales of its own brand Budweiser had been tepid.
After the change of ownership of InBev, Budweiser has become the top three best-selling brands in China, accounting for 19.5% of China’s market and synonymous with high-end beer.
▲ Budweiser ranks third in sales in China
So how is Budweiser reborn in the hands of the new owner?
Before being acquired, Budweiser’s marketing method was to sponsor ball games, which is a proven traditional way, but it is not suitable for China’s Budweiser, because as a new foreign brand, it competes with traditional domestic brands. Others have started, and you have just played.
Therefore, since 2014, Budweiser has adjusted its thinking and decided to hold the title of electric syllable. Electronic music, like imported brands, is new in China, so “new” is Budweiser’s advantage, which can accurately locate young people who love to taste fresh.
At the same time, consumers are less sensitive to the price of electric syllables that can sell mineral water for 20 yuan, which is more suitable for the high-end route taken by Budweiser.
Budweiser also paid a lot of money for this. The lineup invited includes Qian Niu Kesha, the popular electronic icon in Europe and America, as well as the world’s top 100 djafrojack, hardwell, Ti ë STO, don Diablo, etc… it can be called the Chinese version of Tomorrowland. Budweiser storm electric syllable has gradually become one of the most popular electric syllables in Greater China, and Budweiser brand has been firmly labeled as fashionable, high-end and trend.
From 2013 to 2018, Budweiser increased from 40.2% to 46.6% in China’s high-end and ultra-high-end markets. At the same time, Budweiser’s sales volume in China exceeded that in the United States and became Budweiser’s most important market, with a profit of 572 million US dollars.
It can be said that Budweiser died as an enterprise, but as a brand, it has been reborn in China.
Looking at the development of Budweiser since the last century, in fact, it can be divided into two stages according to the U.S. consumer population: Pre-1980s and post-1980s. In these two stages, Budweiser gives classic cases of survival strategies in incremental market and stock market respectively.
From 1950s to 1980s, the market faced by Budweiser itself was growing rapidly. From the 1940s to the 1960s, the United States had a baby boom for 20 years due to the post-war prosperity. The birth population was called babyboomer. They entered the drinking age after the 1970s and became the main force of beer consumption in the United States. The per capita drinking volume increased from 15.4 gallons in 1960 to 23.1 gallons in 1980, an increase of 50%.
▲ the per capita beer consumption in the United States rose in the 1960s and 1980s
At the same time, the living standards of American families generally improved under the economic prosperity, and began to buy large appliances, such as refrigerators. Therefore, young people can take and drink canned beer in the refrigerator, and there is no need to go to the bar to buy draft beer. This trend made Budweiser, which had canned technology and national delivery capacity at that time, beat local breweries.
It can be said that the story of incremental market is full of vitality. Enterprises compete for the speed of horse racing and enclosure. As long as you have the ability to reach consumers first than your competitors, you can eat a bigger cake.
By contrast, the stock market is dark and boring. In 1980, as the baby boomers turned 35 and lost interest in beer, the per capita beer consumption in the United States peaked at 23.8 gallons, which has never been surpassed since, and the population growth of the United States has also fallen from the baby boom period. Therefore, since the mid-1980s, the consumption of beer in the United States has entered a slow decline.
When the market falls into the stock stage, enterprises are faced with two survival schemes, either developing new categories in the original market and attracting consumers by differentiation, or developing new markets and attracting new consumers.
Brewed beer is Budweiser’s attempt to expand its category. Unfortunately, industrial beer hurt brewed lovers too deeply, so it failed; Going to sea to China is a successful market expansion. China’s beer consumption surpassed that of the United States in 2003 and became the world’s largest beer market. Moreover, consumers’ awareness of beer is still in the primary stage, and there is no fine brewing manufacturer to participate in the competition, so Budweiser has benefited a lot here.
However, since 2013, young people in China’s beer market have also run out of money and fallen into stock competition. Therefore, in recent years, we have seen the acquisition of local brands by traditional big manufacturers, the emergence of various fine brewing brands, and the sea going of domestic brand Tsingtao beer. The script that happened to Budweiser in the past may be staged again.
Author: Liu Yimin; Source: Yuanchuan Sea Research Institute (ID: aotekuaitan), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246); for the sixth consecutive year, foodaily released the annual business hot spot of the food industry – exploring the development law of categories from 200000 new products around the world, studying the changes of global consumption, studying the changes of new consumers and consumption demand in combination with the in-depth insight into the Chinese market, and exploring the new value brought by the two new consumption drivers of technological reconstruction and brand popularity, Focus on the prospective discovery of category cracks / innovative products, so as to help new consumer entrants anchor market segments and category fission opportunities, and provide inspiration and decision-making reference for product innovation in the next year. (click the picture to view the detailed introduction) related reading
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