Beer, Wine & Spirits and Social Engagement

Culturally speaking, alcohol consumption tends to be paired with social occasions while skewing toward younger adults. That's making the use of social media such as Facebook and Twitter central to the path-to-purchase strategies of beer, wine and spirits companies.But it's not just the younger, Millennial consumer who uses social media. Middle-aged and older consumers, no longer as reachable through the tried-and-true methods of the late 20th century, do as well. "You're seeing older consumers becoming much more tech-savvy and fragmented," says Tom Burkemper, senior director of category management/trade marketing for Anheuser-Busch, St. Louis. "Before, you could put media on TV, align it with a sports property, and reach a bulk of your consumer base. Now, you have to reach a social- and digital-savvy consumer. They have so many different ways to get their information and to interact. You have to be there digitally for them. You have to build that relationship."Brands are still in the process of figuring out how to do that. "[Social media and digital are] the most significant path-to-purchase activity. We continue to focus a lot of attention on it," says Bryce McTavish, vice president of marketing for MillerCoors, Chicago. "There's no elegant solution to it yet. There's a lot of dabbling in that area." (One example has been to use geo-location to connect with on-premise consumers. "How do I tell you what bars you're near, during happy hour, that have my special?" McTavish says.)Social media plays into strong brand identities as well as shopper desires by providing feedback and affirmation in the alcohol category, says Julie Lynn York, strategic lead, promotion and partner marketing, for Brown-Forman, Louisville, Ky. "There's a lot of sharing; a lot of interest in testimonials. What did you experience? What did you enjoy? Tell me more. There's a lot of wearing that badge: this is my brand." To fully take advantage of social media, brands need to go deeper than just giving people an opportunity to click a "like" button, York says.Wine drinkers respond to that public "brand badge" that social media provides, says Jordon Richard, national account manager, ICON Design and Display, Santa Rosa, Calif. "Wine is a very aspirational product. It's a lifestyle product. You don't need to drink wine."Connoisseurs have formed social media communities like Connosr for whisky, Untapped for beer, and Snooth and Bottlenotes for wine. "Social media and mobile technology are opening up new channels of conversation," says Terry Lozoff, president and CEO of Boston-based agency Antler. "That's going to alter how people are purchasing" alcoholic beverages.Online media has greatly expanded drinkers' ability to pre-shop, which brands need to take into account, says Kurt Hillmann, director of shopper insights for Bacardi, Coral Gables, Fla. "They have the ability to compare prices and collect information on brands and where the spirit was derived. People are a lot more interested in the origins of [brands] in this category." Additionally, Hillmann says, "People can go on their smartphone, type in their ZIP code, and find the place with the cheapest price on Bacardi."Seeking to reach younger consumers, Heineken USA, White Plains, N.Y., has made digital and mobile marketing a priority, says Frank Polley, senior director trade marketing activation. "Millennials' primary source of media consumption is through digital channels. They are also looking for more ways to interact with brands, and expect this interaction to be a two-way conversation. Millennials respond to brief, direct and simple messages that allow them to get more information on their own terms."Smaller brands such as craft beers were early adopters of social media for obvious reasons, says Paul Gatza, director of the Brewers Association, Boulder, Colo. "They didn't have a lot of money to spend on marketing, and new media is cheaper than old media. Word-of-mouth marketing is huge for craft brewers."Tom Pirko, managing director for Bevmark LLC, Buellton, Calif., agrees that most brands are still trying to figure out how to use social media. "We're in a no-man's land right now," he says. "We've had a lot of turn here, a lot of energy, but people haven't even begun to understand what social media is about. … People are trying anything and everything. It's the Tower of Babel."The Shopper ProfileDeep insights gained through shopper marketing reveal that the profile of the average alcohol consumer does not necessarily fit stereotypes. More than two decades ago, beer drinkers generally were men in their 20s who were very outdoorsy and sports-oriented, Burkemper says, but that's changed.Anheuser-Busch targets five different customer segments, which he declined to identify. "We've funded a ton of research," he says. "[The segments] each have different needs, different interests, different brand profiles for their choices in the beer category. We market uniquely to those individuals. … Retailers have to appeal to all of the consumer segments. One segment will not make them successful."MillerCoors is "not out there doing a bunch of quantitative research," McTavish says, but it does work closely with its 25 top accounts to build business category-wide. "It's a customer-by-customer and channel-by-channel approach to how we keep beer top of mind with shoppers, and how we help customers keep their beer business healthy in the face of a struggling economy." The company's research has found that heavier beer drinkers have traded down to less expensive brands, while lighter beer drinkers might trade up but drink less frequently, both of which squeeze the premium category.Heineken sees the typical beer shopper becoming more heavily ethnic over time and believes imports will be well positioned to capture that market, Polley says. The company's research has shown that black and Hispanic consumers account for 44% of import volume, as opposed to 22% for domestic brands. "There is a huge opportunity with multicultural consumers," Polley says. "By 2020, ethnic consumers will drive more than 70% of all the growth in the beer market."Brown-Forman hasn't seen a major change in consumer profiles aside from perhaps a tendency toward more cost-consciousness in the past few years. The company has been working more closely with retailers around research and insights to try to marry profiles, York says. "We've seen additional collaboration as well as more customized research, looking at things through different lenses."Research by wine marketers has shown earlier interest from the Millennial generation than from others, especially in red wines and imported wines, says John Gillespie, president of the Wine Market Council, St. Helena, Calif. Although Generation X had heavy preferences for beer a decade ago, that's changed, and the council's research shows Baby Boomers continue to drink wine, too.Clients of Switch, St. Louis, (including Anheuser-Busch) focus heavily on understanding consumer behavior, says Eduardo Nieuwenhuyzen, senior director of visual and dimensional design. "Is cause marketing more important in this kind of segment? Is cross-merch going to push this needle? What about sponsorship? There's innovation across all those channels, looking for new opportunities."'Cross Merch' is a Key TouchpointCross merchandising represents one of those opportunities. While it's not entirely new to the wine segment, the opportunity has grown there and also has taken root elsewhere in the alcohol category, notably among craft beers."There's a lot of interest in pairings with foods – different flavors and styles of beer paired with different styles of food," says Burkemper, who notes Anheuser-Busch's longtime partnership with PepsiCo's Frito-Lay. "When you think about the products that are complementary – salty snacks, meat and deli, other beverages – it's providing a better basket ring for the retail customer."MillerCoors has also worked with Frito-Lay and more recently paired with Nestlé's DiGiorno to create one-stop shopping for "football occasions." In general, the company has found food brands to be the most receptive, says McTavish, using a college football analogy to describe the difference. "You used to, sometimes, get the Heisman [Trophy stiff-arm] from these companies because they don't want to work with alcohol companies. In-store activities now, whether you like it or not, are driven by cross-merchandising partnerships – how to create opportunities for the retailer by bundling products around occasions that make sense."Heineken has worked with specialty cheese brands in Kroger stores, and with Popchips Inc. and Stolichnaya (Stoli) vodka through the Heineken "VIP Access" summer music promotion. "We developed simple, premium display pieces and information cards describing the flavors of the different beers and how they complement the cheeses they were paired with," Polley says of the former. "We are seeing more and more interested partners, particularly given the importance retailers have put on cross-merch offers when it comes to program solutions."Bacardi has found success in the grocery channel around barbecues and other outdoor events, including some cases where its brands can be used as marinades. "Very few trips, except for in specialty channels, are spirits stand-alone," Hillmann says. "Some kind of collaboration, or cross-merch, is beneficial to multiple places in the store."Craft beers sometimes collaborate with one another, both off-premise and in on-premise events and promotions. "We see regional craft brewers getting more sophisticated with retail chain beer buyers and developing programs," Gatza says. "We see more public events, like beer dinners at a specific restaurant."Supermarket chain Publix has partnered with a craft beer company and hosted its own beer dinner, says Liz Aviles, vice president market intelligence for Upshot Inc., Chicago. "That's indicative of how so many retailers are getting sophisticated around offering advice for food pairing. That was always an element around wine; now it's more front-and-center around beer."Shopper marketing strategies have helped drive collaboration by giving a more scientific insight into which brands will pair well. Brown-Forman has strengthened its longtime relationship with Coca-Cola by figuring out new pairings beyond the classic "Jack and Coke" combination, York says. "Collaboration will continue to increase in strategic power as opposed to tactical power. It's being driven by insights and objectives that both companies have in working with retailers, and understanding our shoppers and consumers. That's where the power comes. It is in those successes."Success in cross merchandising is unlikely unless you are doing your homework first, says Scott Richards, executive vice president of The Integer Group, Lakewood, Colo., which works closely with MillerCoors. "There's absolutely a value in cross-merchandising and collaboration, but that's only as long as you understand your brand, and your consumer, and their shopping habits. We come to [retailers] and say, 'Our research shows this could become a valuable partnership for you and your particular shopper.'"

Beer, Wine & Spirits and Social Engagement

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