from a recent LinkedIn conversation with Mikkel Pilemand, Regional Marketing Director, Carlsberg Group...

Mikkel Pilemand:

Beer market decline? What are the reasons for this and how reverse trend? Many beer markets are seeing very slow growth or even decline. Has accelerated over recent years. In a market like Denmark consumers consume more wine... [Any] learnings on reasons for this trend and what activities companies can undertake in order to get beer market back to growth?

Russell Volckmann:

In Denmark and other countries, the trend is beer pubs  gradually disappear. Even in beer-renowned haunts like Ireland, wine bars quietly pop up in their place.

However, smaller beer producers seem to be staying ahead of the curve, despite the decreasing demand for beer overall. The boutique beers account for increasing market share. Relative to a volume beer producer declines, smaller brands are overtaking the market.

The beer market demographic changed so gradually over the past 5 years, that it took the beer industry off guard. During the same period, the wine industry has exploded. Including an economic downturn, wine markets actually increased by 20% in the US between 2005 and 2009.

Clearly, beer's fall from grace is a matter of perception, positioning, and branding:

Savvy wine producers will position and execute wine brands brilliantly—labeling, shelf differentiation, flavor profile—highly relevant to today's audiences. Beer brands, with few exceptions, rely on the same tired old ad techniques in hopes of salvaging brand declines.

Wine brands connect with audiences on both sensory and cognitive touchpoints. Beer brands are firing random darts in the form of ads that depict genders or society in a narrow light. Funny beer commercials, maybe... but "funny" does not necessarily equal sales.

Generally speaking, wine brands appeal to heritage aspects, tradition, understated elegance, storytelling, and/ or flavor profiles; Beer brands appeal to irrelevant and overdone social stereotypes—and/ or have lost the essence of their heritage qualities in story, messaging, and label. Large producer beer labeling & marks have become outdated and need an astutely planned rebrand.

What is a common theme here between both successful wine & successful boutique beer brands? Producers surgically place products (brand, market, shelf, visual, story, flavor profile) to appeal to a specific audience demographic, as audiences increasingly reject the feeling of "bulk" or "mass produced" or "generic", or "volume"... perceived or real. Wine & boutique beer brand differentiation usually exists with definitive brand space throughout extensions.

Many other beer brands also fail to differentiate, or else differentiate into dangerous territory. Differentiation through beer brand extensions sometimes downgrade and/ or cannibalize overlapping channels. Light beer is one easy cannibalization example. Miller, Bud, Michelob and other beer brands continue to experience light beer extensions eating away their premiere brands' market share. Overall association with the light beers in such close proximity on the shelf may also cause deterioration in overall brand perception. I'd like to see a focus group study on the perception aspect. Properly executed, the results should be very telling.

Compared to beer, wine sales and markets remained relatively stable for over the past 10 years. One reason for wine stability is that, despite competition between brands, regional wine alliances continually strive for collective benefit in terms of strategies and execution in order to help support a sustainable wine industry as a whole; Large & small producers participate, and allocate capital to grow the industry. By contrast, brewery alliances seem scattered, and unsupported by larger producers.

Finally, here's further reading... a good article (below) with a measure of truth.

http://news.bbc.co.uk/2/hi/7103268.stm

Your thoughts?

The Orígami Wine Book below describes how the agency's rebrand of Gélinas Winery resulted in selling out the entire annual wine production in only 24 days—and completely pre-sold production for the following year.

See also: other wine label brand strategy, positioning and creative—plus a small sample of experimental design work.

(A click on the 2nd-from-the-right icon will go full screen.)

Have a branding success you want to share? Let us know!

By the way, I am now working with Montréal's Orígami to help spearhead the San Francisco office. I am overjoyed to be working with a great team of very creative strategic thinkers.

Cheers!

Russell Volckmann