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The focus on local markets matters, whether a brand originates in the country in question or not. Eduardo Tomiya, managing director of Millward Brown Vermeer in Latin America, explains how LatAm’s beer and food brands have stayed local and are still loved.
Latin America is a vibrant continent. It’s a place that’s diverse and one where consumers look for brands with a local connection.
A quick self-portrait of Latin America would describe Argentinians as the most European, Brazilians as open-minded and Mexicans as more conservative with a need to have a sense of ownership of the brands they use.
However, even though all Latin American countries have their own characteristics, they also have strong traditions – family for example – as well as the rising use of digital. Internet penetration is now 56%. Latin Americans also have a warm personality that goes beyond the offline world; for example, The Connected Life survey from TNS found that nine out of ten Latinos (89%) are open to engage with brands online, compared to the global average, 81%.
Even the biggest brands need to use such insights and platforms to create strong roots in all the countries where they operate to appeal to consumers at a local level. This can be difficult in some sectors, in particular with food as it is so intrinsically linked to culture.
We see this in the way food brands that are hugely successful in their home market or region struggle to break into the BrandZ Top 100 Most Valuable Global Brands ranking produced by WPP’s marketing and brand consultancy, Millward Brown, annually since 2006. In Latin America, food brands Bimbo and Sadia both feature in Millward Brown’s regional Top 20 BrandZ ranking but not in the Global Top 100 ranking.
Beverage brands and fast food restaurants find it far easier to become global thanks to their ability to adapt their offering and menu to suit local tastes and cultures.
That’s certainly reflected in the BrandZ LatAm listing, where beer brands dominate, and five out of the top ten are beer brands. Overall the beer category contributed 29% of total brand value of the BrandZ Top 50 LatAm 2015 ranking, reflecting high local consumption. These brands are also global players with four of the five (Skol, Corona, Augila and Brahama) featured in the category ranking of the 2016 BrandZ Top 100 Global brands report.
Multinational ownership by companies such as AB InBev and SAB Miller has enabled them to combine very precise segmentation and targeting. They have succeeded because they behave local, working hard to create a connection with local consumers, right across the continent.
As a result, while, premium brands such as Budweiser, Heineken, Stella Artois and Bohemia are making an impression, local brands continue to have the greatest value and scale among the middle class and lower economic consumer groups.
Case study: Skol
Skol, for example, the No 1 brand in LatAm with a brand value of $6.7bn understands its role is to be a vehicle for its consumers to have a great time: the brand takes advantage of important social events like the 2014 World Cup, Brazil’s Rock in Rio festival, and is always present at Carnival. It has the same personality across digital, celebrating winning 1 million fans on Facebook with a word game.
While Skol is focused on Brazil, the continent’s biggest market, other beer brands are finding ways to extend their footprint from country to country. The fastest-growing brand in the 2015 BrandZ Top 50 LatAm ranking was Antarctica, a Brazilian beer brand that has expanded across the region with both its core product and also its soft drink, Guaraná Antarctica. Antarctica has managed to grow its value by 62% to $1.9bn.
The international brands that have successfully localised in Latin America include Coca-Cola, which played on the Argentinian love of football around the World Cup with bespoke messaging.
Similarly, McDonald’s has localised its menus using local flavours such as guacamole in Mexico to enhance the consumer experience.
Other brands like Starbucks and Subway have made sure their presence extend beyond the large international capitals and are visible even in smaller cities.
Such strong brands face the challenge of transcending and consolidating themselves in new markets, replicating their meaning but also presenting themselves as different.
In LatAm this means being local, even if you come from outside.
© FoodBev Media Ltd 2024