In 1997, Gambrinus landed the importing rights for the US market to distribute Moosehead Beer from Canada. At the time, Gambrinus handled Modelo only in the eastern part of the US, so the company had to build an infrastructure for the western states.
Moosehead was still enjoying some popularity with the younger demographic consumers due to the company’s highly successful 1980’s ad campaign, The Moose is Loose. Gambrinus’ initial positioning effort was to raise frontline pricing and target off premise chain placements in the well next to both Heineken and Corona.
This strategy did not surprise those of us in the market having been with Gambrinus for a while, but we all had serious doubts that this direction would work. Sales immediately started dropping, but in spite of this, the corporate office continued holding firm.
Finally, we got through to senior management. If the label states the beer is brewed in Canada, imported from Canada, and the beer tastes like a Canadian brewed beer, than it is a pretty good chance it is Canadian. In other words, if it looks like a duck, quacks like a duck and walks like a duck than it is probably a duck.
We line priced the beer against Molson and Labatts, and positioned Moosehead in cold boxes next to those same beers. The brand responded, the sales decline reversed, and Gambrinus successfully imported the brand for 10 years.
Recently, ABI settled a class action lawsuit over the labeling on Becks beer. ABI moved production of Becks to the U.S.A. in 2012, but the label indicated it was still from Germany. The settlement ruled that ABI was to refund up to $50 per invoice in addition to paying legal fees close to $3.5 million dollars. ABI also agreed to change the label and the mother carton to indicate that the beer was produced in the U.S.A.
Beer industry consultant, Mike Mazzoni, stated “The word imported is not as important as before,” and to date sales indicate he may be right as Becks is +18.8% in the May 17th IRI data. Becks was also up +7.5% for 2014 in volume, but -4.4% in dollar PPV for the year indicating aggressive pricing.
The rapid growth of crafts has beer has altered marketing strategies. By targeting Millenniums, who are the desirable demographics, today’s marketing is largely based on social media outlets. Marketer and industry experts, without exception, will tell you that Millenniums focuses on authenticity first. Authenticity is what makes the local craft scene real. Authenticity is driving the growth of crafts. Without authenticity this generation will not support the product.
So the question is: will these young consumers support beers like Becks, Kirin, and even Fosters that were once imported, but are now brewed in the US? Obviously the current sales numbers show they are.
There are a number of German beers that are still imported into the US and brewed under the Reinheitsgebot purity law, so there are choices available to these consumers.
If the Millennials are truly into authenticity, than only time will tell once they read these labels on the location of brewing. You can’t try to be authentic, you either are or you are not.