Marketing Society Annual Lecture with Graham Mackay

So how did a beer business with a virtual monopoly in a country once ostracised by the rest of the world go from the lower leagues to the premiership elite of global beer brands – a business that made an incredible £5billion profit last year?

To achieve that level of growth you think that SAB Miller must have done something earth-shattering to catch-up with the likes of AB InBev, Carlsberg and Heineken. Well yes and no according to the long serving and eloquent CEO Graham Mackay. With no fanfare or false modesty he regaled the audience of 200 plus marketers at the Marketing Society’s Annual Lecture with the simple but effective story of SAB Miller’s success – almost a tale of growth by infiltration and flanking manoeuvres.

Keeping to a strategy that largely played to a ‘think global but act local’ approach, Graham’s SAB colleagues apparently trawled the world, searching in particular for products in emerging markets – quality beers with brand potential but declining fortunes, either due to socio-economic factors or production and distribution failings. It worked. In next to no time and under the very noses of the global beer leviathans, SAB ‘got down and dirty’ digging out nuggets in ex-socialist states and 3rd world nations …

And after a bit of polishing and implanting superior production facilities to achieve consistent quality at the right price, SAB Miller had covertly but cleverly built an enviable portfolio of ‘local’ brands to offer global growth potential, including Pilsner Urquell from the Czech Republic, Tyskie from Poland and Pilsener from Ecuador, joining brands once big in their own countries now famous around the world – Peroni Nastro Azzurro, Grolsch, Miller and Castle Lager.

Interestingly although there are 4 brands that are truly ‘global’ and enjoy the direction of a Global Brand Director, however each of these brands is still managed locally by a team which understands the nuances and dynamics of the home country.

The marketing too respects and reflects local traditions and works hard to espouse the pride that a country has in its beer (a product that is closer to the hearts of male nationals than possibly any other), as an advertising campaign for the Polish beer Tyskie played out in the Czech Republic clearly demonstrated – a fine wire balancing act, especially in a country with its own proud brewing traditions and a SAB Miller beer Pilsner Urquell competing against it!

Surprisingly SAB Miller do not have an agency roster, their view is that the cost of maintaining one, both in admin and in policing is too high, so they work with local agencies who understand the nuances of the market and build strong relationships with the local SAB teams. Overlaying their marketing strategy and according to the SAB Marketing Director, one of the keys to success is the way they approach customer segmentation – they really understand the local markets. An in-house team is supported by local experts who believe that their segmentation is unique and provides huge insights and value – SAB spend in the region of £200k per market ‘not the millions McKinsey’s would charge for a report you may not be able to implement.’

Of course there was only so much that Graham could cover in the Annual Lecture but I would have liked to have heard more about one of the most important aspects of the beer industry – distribution – and the fact that SAB have been very good at managing both the on and off-trade and gaining distribution in the free trade especially with Peroni. Also how do they see opportunities to gain growth in markets like the UK where cost of health provision will mean increased taxes and control on unit consumption?

All in all though a fascinating presentation from an understated but overachieving business leader, an engineer by education and not someone who claims to be a marketer, yet his leadership has proved that growth does not have to be at all costs, that it can respect borders, cultures and revive products in need of rejuvenation, providing brand nourishment at commercial gain. Watch out for British Bulldog from the Westerham Brewery, my favourite local ale but if SAB Miller gets a sniff it could join the other 66 beer brands in the European portfolio alone!

Andrew Orbell
Meteorite, a Growth Group company

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Sponsorship – beware of England!

 Possibly the starkest warning of how sponsorship can all go horribly wrong – when you back the wrong horse, or should I say “football team” – it was amazing just how quickly the Flags of St George disappeared from cars, vans, pubs, houses and thankfully bodies too after England’s ignominious exit from the 2010 World Cup. I suspect that Mars would have liked to have waved a magic wand that would have removed the 3 Lions from millions of their confectionery bars and Carlsberg banish the unsmiling but heroic looking Capello & co from their multipacks. Nationwide certainly took little time in divesting itself of ties with our ignoble football team when they so quickly declined the opportunity to renew their Team England sponsorship. 

Of course all these brands will argue and with good reason, that they benefitted from the long build up, the qualification, the anticipation of South Africa and all the attendant perceived glory that went with the high expectations, of both the England team as well as the tournament. And after all, no one can blame the sponsors for the poor showing of the team … can they? 

Is it too much of a coincidence that the stars of Nike’s fantastic “Write the future” film – Ronaldo, Rooney, Ribery and Drogba have been the biggest disappointments of the “greatest show on earth” – perhaps they believed the hype so much that they thought their performances would be stage managed … actually having an opposition who wouldn’t lay down and die was too much of a surprise for them in reality! It would be really interesting to know whether Nike are feeling good about their involvement or are sitting there with egg on their faces – shall we put that down as a X not a tick? 

However as we all know, in the marketing world, yesterday’s sponsorship or advertising is too often like a tabloid’s newspaper headlines – last night’s fish and chip wrapping, to be disposed of and instantly forgotten. Nevertheless I think that the overhyping and spectacular jingoism associated with many sports, but in particular football and especially England, needs to be reconsidered and a more balanced approach taken as to how sponsorships are exploited and communicated – in fact that’s probably what Nationwide had in mind all along with their Little Britain spoof advertising “Look he’s signed your England replica shirt (Capello) – I don’t like him ( response and the aforementioned article flung to the ground) – they obviously knew something we didn’t about the outcome of England’s African adventure, unfortunately all that pride was worth sweet FA in the end. 

On a much more positive note on Sponsorship this Summer – my congratulations to Robinsons and their enduring, relevant and engaging association with tennis – 75 Years serving Wimbledon and an undiluted source of promotions, profile and product endorsement – even if our home grown sportsmen in this arena are as hopeless as their 2 footed or should that be 1 footed compatriots ( with apologies to the one exception of course, Andy Murray – how he must have laughed at England’s Rake’s Progress in the World Cup!) 

Andrew Orbell

Director, Sparkworks

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