Beer brands dominate the top 10 and ‘fastest riser’ lists in the latest BrandZ Top 50 Most Valuable Latin American Brands ranking, with a combined value growth of 96%.
Mexico’s Corona has become the region’s most valuable brand across all categories, with value growth of 29% in the last year. Modelo, also from Mexico, and Brahma (Brazil) achieved the strongest growth at 85% and 61% respectively, while Skol, Brazil’s most valuable brand, grew 39%. Águila (Colombia) entered the ranking for the first time at No10, while Poker (Colombia) and Cristal (Peru) also made their debut in the Top 50.
Rising employment levels and the resulting increase in disposable income has led to an increase in beer consumption across the huge Latin American market. Wine is getting more popular as the middle classes expand, and people become more sophisticated and willing to try new things (particularly in Brazil, and especially among women). However, the beer tradition is extremely strong. It’s a drink that lends itself well to frequent drinking in warm weather, and the beer companies do an exceptional job of putting their brands at the very heart of Latin American life and culture.
They have proved themselves adept at building a unique brand proposition and delivering powerful, specific and relevant emotional attributes. This has given the entire category a resilience that minimised the impact of recent economic factors such as inflation and the fall in commodity prices.
Beer brands excel at solid positioning and clever, creative marketing communications. AB InBev, which owns Brahma, Antarctica, Bohemia and Skol, has an outstandingly clear brand strategy that has enabled it to capture 70% of the total market.
The company positions each brand in a very distinct way. Skol’s marketing emphasises enjoyment of life and appeals to young people in particular. The traditional ’round and square’ joke it uses across its communications has significant local relevance in Brazil, while its music events have been a great success.
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Brahma is well-known for its innovative and witty advertising that relies heavily on sex appeal, and connects the brand strongly with soccer and carnival.
Bohemia is more niche, and marketing messages are focused on its handcrafted, artisanal attributes. Antarctica is highly associated with Rio de Janeiro and the ‘Cariocas’ born there, and its logo featuring two penguins is extremely famous.
SABMiller, meanwhile, links its Águila and Poker brands very strongly with soccer, something that plays a big role in the lives of people in Colombia.
One factor that Latin American beer brands have in their favour is people’s positive attitude and loyalty towards local brands: consumers enjoy and appreciate marketing that focuses on ‘being local’ and traditional. This is very different from the soft drinks category, where global brands tend to be more popular.
The reason is probably because people start drinking beer after the age of 18, when their heritage has started to become important to them and they are less influenced by the marketing of global brands.
SABMiller’s marketing for Àguila ties the brand powerfully to local tradition: the recent 100 años de alegría commercial, for example, reflects the country’s heritage in a highly emotional way.
Local brands also have a huge presence in supermarkets and bars, making it difficult for foreign brands to enter. Corona, for example, has an aggressive and successful trade strategy that gives it a high profile in bars throughout Mexico.
Distribution, too, is a big factor. The ability of beer companies – especially those that have consolidated – to build a network that takes their products into every corner of the market gives them a huge advantage.
The outcome of this successful brand-building is unwavering consumer loyalty. The beer brands in the BrandZ Top 50 Most Valuable Latin American Brands ranking received the highest scores of any category for brand contribution, which is based on consumer perception and measures the impact of brand alone on future earnings. This indicates that close bonds have been forged between the brands and their customers.
Brands have also successfully balanced global expansion with strength in their local markets, gaining popularity with consumers overseas while generating local loyalty to help them gain force against global competition.
Each Latin American beer brand enjoys a huge leadership position in its home market. Corona is popular across the world, but 50% of its sales come from Mexico. It has used the ‘Mexican brand’ attribute and the associations behind it – such as holidays and relaxation – to help it succeed overseas.
The Olympics and the World Cup present an opportunity for brands across the region, not just in Brazil, to use the ‘buzz’ around everything Latin to strengthen their position globally through activation events and campaigns. They should already be starting to engage with and invite consumers to participate in the conversation online and through social media.
Joining forces to co-create marketing initiatives is another way of increasing exposure and making the most of synergies. Brands could partner with a retailer, for instance.
When it comes to exposure and loyalty, it’s tough for international beer brands to compete with the Latin American companies. To increase their market share, they will need to invest in a detailed understanding of preferences, traditions and culture in the markets they want to penetrate. It may also be beneficial to join forces with a local company to take advantage of local knowledge and distribution networks.
The biggest rewards will come to those who are able to establish a true emotional connection with consumers, as well as a physical presence in the market.
Eduardo Tomiya is managing director of Millward Brown Optimor company BrandAnalytics.
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