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Vinod Giri

Director Marketing | 13 Dec 2005

The absence of focused brand building, low focus on consumer, and relying on incentivising trade have resulted in this market being ‘under-consumerised’. Now there is an emerging focus on consumer-focused branding and marketing across parameters like pricing, promotions, positioning and other factors. Only recently has consumer centric branding come into play in the Indian beer industry.

SABMiller (formerly South African Breweries) had announced in June this year that it would invest about Rs 535 crore in capital projects and marketing in India over the next five years to expand its existing operations and develop its brands. The company has been in present in India for almost five years now, beginning with the purchase of Narang Brewery in Uttar Pradesh.

SABMiller India’s brands account for a third of the Indian beer market at 88-89 million cases annually, making it the second largest domestic brewer after United Breweries Ltd. Its four brands – Hayward’s, Knock Out, Royal Challenge Premium Lager and international premium brand Castle Lager – compete with several regional, national and international brands in their quest to increase market share in India.

In conversation with exchange4media’s Gokul Krishnamurthy, Vinod Giri, Director Marketing, SABMiller India Ltd throws light on the global brewer’s journey so far in the Indian beer market and the road ahead. Excerpts:

Q. How does each brand in SABMiller’s portfolio contribute to your share in the Indian market?

We hold around a third of the total beer market in India with our four brands. The portfolio has Haywards 5000, which accounts for 28 per cent of the strong beer segment, and then there is Knock Out, also a large strong beer brand. We also have Hayward’s 2000, Royal Challenge, and the urban centre driven brand Castle Lager.

SABMiller believes in rooting the brands in consumer insight, where they are able to meet well differentiated need state gaps in the market. This necessitates that all brands are well differentiated and distinctly positioned and rooted in a big idea that is owned by the brand. If a brand does not have all of these, it effectively has no real place in the portfolio.

Q. How much does the strong beer segment contribute to the total beer market?

Strong beer contributes nearly 65 per cent to the total beer market in the country. The rate of growth of the segment is also faster than the mild brands. We expect it to grow to 65-70 per cent in the near future.

Q. Would you agree that the beer industry is dominated by regional brands? This seems to be the case if you look at it historically…

Like any market that goes through the process of development and consolidation, the beer market, too, has been evolving. Today, you have two companies that account for 80 per cent of the market. As the market evolves, the generic nature of the segment is vanishing. There is rationalisation and we see the role of national brands increasing.

Q. You have brought in Castle Lager, and then there is Foster’s. What is the future of international beer brands in India?

SABMiller is the world’s second largest brewing company with renowned expertise in operating developing markets across the world. It has been in India for nearly five years and has gained a deep insight into the market, consumers, trade dynamics and competitive context, which is critical in a complex, fractured market like India. This insight and expertise, along with a bouquet of very strong brands in our global as well as Indian portfolio, well established structures, systems and processes in India, gives SABMiller a clear headstart over its global peer groups.

As the Indian market develops and the economy keeps moving upwards, a large number of consumers will choose these brands over others. However, a large part of the market in the foreseeable future (three to five years) will be driven by Indian brands.

Q. What are the brand properties that have been created around Castle Lager? There was a Men’s Fashion Fair…?

The Men’s Fashion Fair will be an annual feature. It was started in Bangalore and we plan to keep it in Bangalore in the near future. It provides a platform for designers and brand labels to display men’s fashion. We realised that men’s fashion does not have a prominence in the fashion scene in India. Beer, at the end of the day, is a lifestyle product and men constitute the primary audience. There is also a point of differentiation. Our event is more like a Fashion Fair than a Fashion Show. It’s a unique opportunity for labels and provides them a forum to address their audiences too.

Q. By focusing on men, are you narrowing down your audience?

I would not say narrowing down the audience. Instead, I would look at it as targeting better, with better focus. At the end of the day, men are the heart of our target audience. The percentage of Indian men among beer and alcohol consumers would be in the high 90s.

Q. Have there been any initiatives to expand the beer market by targeting women?

We have not undertaken any such initiative as far as I can remember. I cannot comment on any such strategies, if any, undertaken by the competition.

Q. How much of a challenge is marketing in this segment, given the advertising restrictions?

There are restrictions on advertising, and they do reduce the efficiency of communicating the brand positioning. Having said that, every market has its own facilitators and its own barriers, and the role of marketing is to maximise efficiency and effectiveness within the defined framework. We try to ensure that each brand is distinctly positioned with low reliance on fine nuances. We try to engage the consumers at various points of influence – touch points – through a 360-degree programme.

Q. Kingfisher has a ready association with lifestyle, fun, sport. What does Castle Lager stand for?

Castle Lager is an international brand on a solid platform, which is that of a ‘Perfectly Balanced Beer’. That is the core idea that has been communicated since its launch. The tonality of the messaging will go through a change, but the core positioning is that of a ‘Perfectly Balanced Beer’.

Q. Geographically, which are the top markets in India for beer? What’s the second rung?

Andhra Pradesh, Maharashtra, Tamil Nadu and Karnataka are the top four markets for beer, in that order. The second rung is made up of Delhi, Rajasthan and Uttar Pradesh.

Q. Which are most difficult markets?

Every market is difficult. They all have their own dynamics. One can generally say that the markets that operate under the auction system are the most difficult, and the next would be those controlled by the government. The relatively free markets are the easiest to operate in.

Q. Which are the mineral water brands from the portfolio? How do they help in brand building given the advertising restrictions on beer in India?

We have a very strong mineral water brand in Royal Challenge. It is an independent business by itself, and it is worthwhile to have it in the portfolio. Royal Challenge has been selling in excess of 10 million litres over the last few years.

Q. What are the other promotional activities you are engaging in?

Castle Loud is a property we are actively building. It’s a music property we’re taking across the country again this year. We are bringing in DJs from all over the world and Loud by itself is a property that is present in several countries across the world. We have, of course, Indianised it to suit the market. Castle Loud is an initiative of Castle Lager to bring a perfect balance of music and beer.

Q. What do you think about celebrity endorsers?

They help cut through the clutter. If the endorser has a perfect brand fit, it also has a constructive rub-off effect. However, with a limited number of celebrities with mass appeal, and a large number of mass brands trying to use them, we have reached a situation where the same celebrities are endorsing many brands, and often brands with divergent image and personality. The effectiveness and efficiency of such endorsement is a matter of debate. We have used some of them in the past. We had Manoj Bajpai for Knock Out and Darshan now endorses our brand in the Karnataka market.

Q. Has the celebrity route delivered for you?

Yes, it has. It really depends on the fit between the brand and the endorsers. Also, these were not people who were into endorsing a whole bunch of products, so the ability to break through the clutter was high.

Q. You have been in the Indian market for around five years now. How has the experience been as a challenger in a single-player dominated market?

India was never a one-player dominated market. In my view, this market has always been a fractured one. The largest brand has less than a third of the market share. This is lesser than the market leader’s share in several international markets. The absence of focused brand building, low focus on consumer, and relying on incentivising trade have resulted in this market being ‘under-consumerised’. Now there is an emerging focus on consumer-focused branding and marketing across parameters like pricing, promotions, positioning and other factors. Only recently has consumer centric branding come into play in the Indian beer industry.

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