We caught up with the chief marketing officer of United Breweries on the sidelines of a press conference.
Craft beer, non-alcoholic beer, and a Derby title sponsorship - United Breweries and Kingfisher are having a busy year so far. The dates for the Kingfisher Ultra Indian Derby 2020, taking place at Mahalaxmi Racecourse, Mumbai have been announced. At the sidelines of a press meet, we caught up with Gurpreet Singh, head of marketing, United Breweries. Here are edited excerpts from the conversation...
Q: The state of the current economy has many people worried. What's your take on that?
I think it’ll take a little longer for the economy to come back to normal… there are no quick turnarounds in an economic scenario. The economy is like an elephant. It will turn, but when it does, it will turn with momentum – but this will take a bit of time.
Excise pressures, cost pressures and prices of products – it's going a little beyond the reach of a regular consumer. Beer in India is not a common man’s drink – it’s mostly going to be cheap whiskey. We need to be realistic about that. If you have clarity on the state of the economy, then you can make a business plan for the next two or three years. I think for marketers, the next two years are going to be all about making hard calls and choices - can we maintain advertising levels in a growth situation of four to six per cent? Probably not…
We have options and we don’t need to reinvent the wheel, but when we have five options to reach consumers, do we use all five or do we focus on using one or two to achieve maximum effectiveness? That’s what it’s going to be about in the upcoming financial year…
Any businessman in this trade needs to look beyond what his core trade is and look at other ancillary businesses.
Q: Is non-alcoholic beer catching on as a trend? We saw Heineken recently put out an ad with Daniel Craig for non-alcoholic beer...
A: Heineken Zero has focused on non-alcoholic beer in a big way, globally. Culturally, across Europe and many other countries, the consumption of alcohol has actually become stagnant. Unlike India, it’s not because of government restrictions. People are just starting to drink more responsibly. A lot of people are also taking to abstaining.
Any businessman in this trade needs to look beyond what his core trade is and look at other ancillary businesses. We’re still making beer, it’s just that it's non-alcoholic. It’s still made in a brewery and the processes and checks are exactly the same. The only difference is, at the end of it, your customer gets the option of a non-alcoholic beverage. It's only fair that you’re offering that same brand experience to other consumers who may choose not to consume alcohol.
We looked at Heineken’s numbers for non-alcoholic beer, and that became a big part of the reason we got into it two years ago – it's more profitable. The margins are higher, the volume aspirations are bigger. The non-alcoholic beverage space is significantly bigger than the alcoholic beverage category.
At a central level, not having a central singular understanding of what alcobev marketers can and can’t do with advertising – is the biggest challenge.
Q: Could you tell us about some of the marketing challenges of the alcobev sector in India?
A: There’s no central policy towards the marketing of alcohol beverages. I’m not just talking about the fact that taxation is different in different states. Excise and other authorities' interpretation of what we can and can’t do in terms of simple things like putting up posters outside the outlet are still an issue.
At a central level, not having a central singular understanding of what alcobev marketers can and can’t do with advertising – is the biggest challenge. At a macro level, the biggest challenge is that you can't show your product in an advertising message. I understand the ethos behind it, but even if a person is an adult of legal drinking age, it's still a challenge to reach out to the right audience.
Some countries have laws that say that alcohol brands are allowed to advertise on television after a certain time, but we don't have that in India. Apart from social platforms like Facebook and Twitter, we're also closely looking at TikTok influencers right now to reach a wider audience - their influence spans nearly 11.7 million people.
Unlike a FMCG company that can launch a product across the country and make its presence felt with an advertising burst, we can't do that.
Q: How has the digital medium changed the way you reach your audience and how you speak to them?
A: The opportunity is that digital allows you to pinpoint and reach out to audiences with geo-targetting. Because we're state excise based, we don't typically launch a new product across the country in one shot. Unlike a FMCG company that can launch a product across the country and make its presence felt with an advertising burst, we can't do that. We have to go step by step, so to begin with, we launch in one state, follow it up with on-ground activities, events, etc. It takes us two to three years for a newly introduced product to be launched and available in every part of the country. It's available in the key markets within 12-18 months, but other markets might take longer.
On the digital front, till a few years ago, it used to be mainly Facebook, but as audiences evolve, we find that Instagram is emerging as an interesting marketing platform for marketers, especially at the affluent end. Our digital handles provide a way for people to experience an event (such as, say, Sunburn) without actually being present there.
TikTok touches the heartland of India - the numbers are mind boggling. There are almost 130 million users in India. While considering influencers recently, we identified that on TikTok, you can reach nearly eight million followers. As long as there's a marketer who can understand it and a market that is willing to be part of the conversation, you can take an effort to understand it and make your presence felt there. Digital lets us break our dependence on mass media and helps us reach the audience we're looking for, even though we have all these restrictions on advertising.
An ad can't look like an ad - it has to resemble content or it has to be embedded within content in the right way. Your product message needs to be discovered, not delivered.
Q: How has ad consumption on the digital medium evolved?
The concepts of yesteryear - making an ad film and playing it till it comes out of your ears - just don't work anymore on digital. On most digital media, a user doesn't want to watch ads. There are two types of digital media consumption. At one end, it is appointment based consumption which is similar to television largely, a lot of it sports driven and some of it driven by TV serials - generally, a user doesn't skip these ads as they don't want to interrupt the content playing out. The other type of digital media consumption is when you're on a medium like Facebook or Instagram and a user is scrolling vertically through a feed. There, if you have to capture an audience in an ad in between that content, you need to think less like a classical advertiser and more like a content creator. An ad can't look like an ad - it has to resemble content or it has to be embedded within content in the right way. Your product message needs to be discovered, not delivered.
There is an evolving market for craft beer in India. The way I interpret it, there is no realistic large scale market for craft beer in India yet, but there is opportunity with wheat beer.
Q: Tell us about how you plan to use brand ambassadors to further your brand message.
A: The brand ambassadors that we've appointed will be an integral part of our campaigns. We feel that having a brand ambassador helps with visibility since they are famous within their niches.
Millennials are hard pressed for time. I think the new generation is a little different in that they don't want to be defined by their jobs and official roles. They are particular about work-life balance. In most Asian countries, your learning ends at 20 - the younger generation is trying to get this balance right and that's admirable to see. The kind of advertising we did earlier is insufficient for this audience, so we need to find new ways to connect with them.
There is an evolving market for craft beer in India. The way I interpret it, there is no realistic large scale market for craft beer in India yet, but there is opportunity with wheat beer. Our analysis showed that 70 per cent of craft beers sold are wheat beers.
When it came to launching Kingfisher Ultra Beer, we could've used a Kollywood celebrity who would've gotten us the eyeballs. But while launching a wheat beer, the consumer might be interested in the ingredients and where it originates from - can an influencer effectively narrate that story and be believable? Debatable...