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Some Things Stay The Same While Others Change Drastically In Beverage Marketing

Some Things Stay the Same While Others Change Drastically in Beverage Marketing

In 1992 I moved to the “Brew City” and, fittingly, I worked promotions on a number of Miller Brewing brands. Whether it was on- or off-premise, the bulls-eye target for our work was 21- to 28-year-old males. The men who made up this group were the so-called “heavy consumers.” Not only were they the biggest buyers, they were also forming brand preferences that would likely last for their entire life. Are you going to be a Miller guy or a Bud guy? Some 20 years later the 21- to 28-year-old segment remains key, but beverage marketers have expanded their efforts by devoting plenty of attention to females. And how we market has changed drastically.

Last week the Interactive Advertising Bureau (IAB) released their Digital Mixology Playbook. The document provides a good overview of how the beer, wine and spirits industry now markets itself. While creativity and the beverage industry have often been linked together, the industry has been slow to the game in its use of digital marketing and is now catching up very rapidly.

“Our industry is going to change more in the next 5 years than it has in the past 50 years,” said Tim Murphy, vice president, digital and media, Pernod-Ricard, USA.

Part of the reason for this ground swell has been changes in TV advertising regulation and age-gates for digital. Spirits were just approved for TV in 2012 and it now accounts for 39% of the industry’s more-than-$2 billion in ad dollars. Digital currently only accounts for 4%, although more progressive marketers such as Bacardi and Constellation allocate more than 15% of their ad budgets to digital.

The increases in TV and digital have come at the expense of the more traditional media choices. Most significantly, since 2000 radio has fallen 77%; it now accounts for only 1% of all spending. Magazine and newspaper has dropped 47%, but still banks a healthy 44% of the total, while outdoor has slipped 13% to now take in 11% of the total.

The playbook for the next few years will be driven by the millennial generation (I know, I’m tired of hearing about them also). However, we can’t ignore the power they have in the marketplace. Nielsen predicts that by 2021 millennial consumers will account for 40% of the 21-and-over population. And, even more striking, is that the millennial segment now accounts for 55% of the adult population that plan to purchase beer, wine or liquor in the next 90 days. This age group is and probably always will be the “heavy” consumer group when it comes to the booze business.

Beyond just the millennial group, the entire drinking audience uses digital more than the population as a whole. For Constellation Brands (marketer of giant beverage brands such as Mondavi, Mark West, Corona and Svedka) their 2013 audience research study showed them that wine consumers spend 22 hours per week online. This point drove their decision to spend upwards of 15% of their total budget on digital efforts.

Marketing via mobile devices will most likely be the fastest growing segment in the beverage business and millennials and mobile are a perfect fit. They were born into the digital age and 80% of them even sleep with their mobile devices. In fact, millennials rank “technology use” as the single biggest attribute that makes their generation unique.

On-premise promotions are a natural fit for mobile marketing and Brown-Forman, Pernod and most of the other beverage giants are working with Foursquare, Shopkick and other location-based services to deliver content that enhances the social experience while promoting their brands. Location-based push-notifications serve to pull in consumers to bars, clubs and restaurants with special incentives or just the desire and curiosity to be at the hottest spot of the night. Foursquare has seen their revenues from spirits increase 600% for 2014 so far.

The tactics and media options we in the beverage business use to communicate with the 21- to 28-year-old market will continue to move toward digital and mobile. However, one thing I will guarantee that won’t be changing anytime soon is that this age group will continue to be the one that receives the lion’s share of attention and budgets.

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