These are challenging times for major beer makers. Beer sales in the United States have fallen by about 4% since 2008, with the biggest declines being experienced by some of the largest brands. Bud, Miller High Life and Miller Lite have lost a quarter of their sales volume. Some might chalk this up to the encroachment of craft brewers, but while sales of craft beers have grown by roughly 80%, they still represent only 7.6% of beer sales nationwide. A recent article in Forbes suggests that the real reason for the decline in major brand beers sales is that the Baby Boomers who drink them are drinking less as they age, and millennials, partly because the major beer brands have failed to connect with them, are finding other things to drink. Among the exceptions is Dos Equis, which has doubled its sales volume while other major brews have been declining.
Dos Equis’ success can be attributed to a number of factors. One is the ongoing success of its “Most Interesting Man in the World” campaign. But, Dos Equis and its parent, Heineken International, have also been successful innovators in mobile and digital marketing, an especially effective channel with the millennial audience that other major beer brands seem to be using.
Just last Halloween, Dos Equis launched its Masquerade campaign, in which consumers were encouraged to post Halloween-themed photos of themselves to Instagram for a chance to attend a masquerade party in New Orleans that included a performance by rap artist Q-Tip. As part of the campaign, Dos Equis also flooded bars with virtual reality headsets that allowed users to attend a masquerade party hosted by the Most Interesting Man in the World.
As Heineken looks to build on the growth of Dos Equis and continues to make inroads into a younger market, it’s putting even more of its resources into mobile and digital advertising. The Wall Street Journal recently reported that Heineken will be devoting a full quarter of its ad spending on mobile and digital media, and will team up with video ad technology firm TubeMogul to facilitate its push.
The Way I See It
- Heineken and Dos Equis are in a great position. Not only are they making smart, effective use of digital and mobile marketing, they’re also benefiting from the growth in the United States’ Hispanic market. Hispanics are the fastest growing demographic in the country.
- Heineken’s brands are also hitting home runs in traditional media, and by blending traditional and digital. Dos Equis’ Smartest Man in the World has become an icon, and Newcastle’s generated a lot of buzz around last year’s Super Bowl with its “If We Made It” digital campaign, and this year by trying to raise money for a Super Bowl spot by selling portions of its ad to other brands.
The Way the Industry Sees It
I sat down with Andrew Katz, Vice President of Marketing at Dos Equis, to discuss marketing beer in a time of shifting tastes and demographics.
How have beer drinkers changed over the past few years, and what opportunities do those changes represent?
The beer category in the United States is being driven by two major trends – one is the proliferation of Mexican Imports like Dos Equis, as consumers are increasingly seeking more interesting flavors and experiences. The second is the craft movement where drinkers are exploring different styles of more locally brewed beers. Another shift on the periphery is the “blurred lines” between beer and spirits. Early legal drinking age consumers are looking for new, change of pace experiences that are as interesting as they are, like the unexpected taste of the Dos Equis Dos-A-Rita – which is a mash up of Dos Equis and a Margarita. We can’t state enough how important innovation is to the success of growing the millennial segment. Given these trends, Dos Equis is well positioned to win in the United States.
What’s the potential for Dos Equis? Is it a beer targeted to the United States’ Hispanic market, or does it have the potential to become another imported beer that transcends its country of origin?
Dos Equis quadrupled its volume in the last decade (according to Neilson) and just passed Stella as the #4 imported beer in America (according to Beer Market Insights)! This fantastic performance makes us very optimistic about the brands’ prospects for growth, because we know that the brand appeals to people who “seek out interesting” – whether they are, millennials, or bicultural consumers. Our goal is to not only sell a great beer, but also connect with our fans to deliver memorable, interesting experiences that will make them come back.
I read recently that Ron Amram, Heineken USA’s senior media director, has embraced a mobile first approach. What are the practical implications of that? How does it change the creative process? How does it change the media planning process?
Everything we do begins with the question of ‘How are we going to create an experience worth sharing?’ How can we better serve them and their needs? Where can Dos Equis add the most value in their lives? Given our core millennial consumer, it is essential that we are where they are which increasingly is on their mobile phones. Some call this the second screen, but with our target, in many ways, it’s neck and neck with television. Creatively, we think about the context so that we are as relevant as possible. A 30 second commercial works great on a 60” television – but in social for example, we tend to think more “bite-sized” content that is sharable on a 4” screen. Media-wise, it’s really a function of shifting our investment to most effectively and efficiently reach our core audience.
How do your different consumer segments interact with mobile and digital? Are there different approaches for age, gender and other demographics?
We’re very focused on reaching Millennials of a legal drinking age. For Dos Equis, we are committed to reaching our audience on their terms. Since they are predominantly consuming content on mobile and digital – we are delivering ads, information, and experiences to them in interesting ways.
What’s the most interesting object in your office?
A soccer ball signed by Pele, an original Annie Leibovitz framed photograph of Tina Fey, and a painted portrait of the ‘Most Interesting Man in the World’. I guess I take inspiration from interesting, talented, iconic people!