HAPPENING MARKETING

MARKETING STRATEGY

Labatt Breweries of Canada

Bud Light

HAPPENING MARKETING
HAPPENING MARKETING - STRATEGY - 2013
Written by Benoit Pratte and Adam Mitchell
Introduction
Labatt Breweries of Canada has been shaped by more than 160 years of brewing excellence. Throughout the
company's history, Labatt has never lost sight of the fact that it is in business to exceed the expectations of its
customers. From coast to coast, 3,200 employees come to work every day dedicated to achieve this objective.
In 1847, the company's first brewery produced close to one thousand bottles of beer a year. Today, Labatt is a
proud member of AB InBev and produces approximately 60 local and world-renowned beers available to
customers across Canada. Much has changed at Labatt since its founding, but one thing remains the same
our commitment to brewing great beer.
AB InBev was formed following the acquisition of American brewer Anheuser-Busch by Belgian-Brazilian brewer
InBev, which itself is a merger of AmBev and Interbrew.

Interbrew has its oldest roots in the Den Hoorn brewery in Leuven, dating back to 1366. In 1987 the
two largest breweries in Belgium merged: Artois, located in Leuven, and Piedboeuf, located in Jupille,
forming Interbrew.
AmBev (short for Companhia de Bebidas das Amricas, or "American Beverage Company") was
created in 1999 with the merger of the two biggest Brazilian brewers, Antarctica (founded in 1882) and
Brahma (founded in 1888).
Anheuser-Busch was established in 1860 in St. Louis, Missouri, USA as Anheuser & Co.

In 2004 Interbrew and AmBev merged, creating the world's largest brewer, InBev.

[3]

In 2006 InBev acquired the Fujian Sedrin brewery in China, making InBev the No. 3 brewer in China (the world's
largest beer market). In 2007, Labatt acquired Lakeport in Canada, and InBev increased its shareholding in
Quinsa, strengthening the companys foothold in Argentina, Bolivia, Chile, Paraguay and Uruguay.
On 18 November 2008, the merger of InBev and Anheuser-Busch was completed, creating AnheuserBusch
InBev, the leading global brewer and one of the top five consumer products companies in the world. Under the
terms of the merger agreement, all shares of Anheuser-Busch were acquired for 70 USD per share in cash, for
an aggregate of 52 billion USD. Beer, the original social network, has been bringing people together for
thousands of years and our portfolio of well over 200 beer brands continues to forge strong connections with
consumers. We invest the majority of our brand-building resources on our Focus Brands - those with the
greatest growth potential
The Industry
The beer industry, despite climate changes, economical trends and other special events, is relatively inelastic. It
has seen a CAGR of +0,18% over the past 6 years (see Appendix 3 for growth per year). In addition to a being a
stable environment, it is also a highly regulated market being bound by minimum price rules set by the

Labatt Breweries of Canada

Bud Light
government, which put a limit to how low brewers can discount their beer prices and prevents them from giving
beer away for free. There are also contracts with retailers, either with the corporate banners or independent
locations, which work to regulate the space and visibility that each brewer is allowed in stores for their products.
Such restrictions limit new product introduction, as a brewer must find room within their allocated space to list
new product, often having to remove product to make room for such innovations.
The beer market has experienced big changes in the way consumers enjoy their favorite beer. With frequency,
cans are replacing bottles as consumers favorite containers and brewers have been taping into this trend by
offering new aluminum bottle which combines elements of both. Imported product has also taken a bigger place
in the market with a growing number of products available, such as Stella Artois, Hoegaarden and Leffe creating
a high end segment where consumers are ready to pay more for an equivalent format.
Lastly, consumption is largely driven by off-premise purchases (bought in a grocery or convenient stores to
consume at home) compared to the on-premise segment (Bar, Restaurant, Tavern). Roughly 80% of
consumption is made off-premise and the gap between the two keeps increasing.
Beer Segment
Beer is divided into 4 different segments which tend to appeal to different consumer needs and purchasing
behaviors.
1- Core
Often referred as mass produced beer; they represent more than 50% of the beer sold in Quebec.
These beers offer a smooth taste, are easy to drink and can be enjoyed by the majority of the
population. These are the beer you will find in your every day grocery flyer.
2- Domestic
Probably the largest segment in terms of number of brands, this segment represents a variety of flavor
and taste. These brands are generally produces locally, either by one of the major brewer or one of the
many micro-breweries. Key players are the Alexander Keiths family and Rickards family of brands..
3- Imports
Brewers started importing beer from other countries in order to grow their portfolio and bring top brands
from across the World. Beers such as Stella Artois, Corona and Heineken are perfect examples of these
global brands. They tend to be sold at a higher price but retailer have been using promotional pricing to
gain consumer appeal and gain customers that usually shop somewhere else.
4- Discount
There is one key lever that drives the discount segment and it is price. Consumers will most often buy
smaller formats, and look for the best offer on shelf. Once they have found the best price, they tend to
choose their brand and remain loyal as long as it remains the best offer on the market. Some of the
brands from this segment are subject to an underground movement which has increased their sales
through LDA-25 consumers. Brands in this segment include Busch and Pabst Blue Ribbon.

Labatt Breweries of Canada

Bud Light
Competition
Major Brewers in the industry have been trying to increase their respective market share in Quebec for a long
time. Labatt, Molson and Sleeman have been launching and establishing a large variety of brands that play in
each of the various product segments in order to have a balanced portfolio. Through event sponsorship, mass
media campaigns, in-store contest activations or other promotions, each of the major brewers has been trying to
win over consumers.
But the competition in the beer industry doesnt end with these 3 brewers, the market for consumers is fierce.
Micro-breweries have also been growing in the past couple of years, especially in more urban regions. Each
brewer must find new ways to grow in this flat industry. Innovations are one of the key ways to differentiate and
position new products on the market.
In addition to competition within the industry, beer is facing increased competition from other alcohol segments
in order to win the share of throat of consumers. On one side, we have the Wine category that has grown
strongly through the SAQ and that has taken the top of mind position especially in a food companion mission.
How often do you see people opening a bottle of wine during a diner? They have been able to fully own this
occasion. Then if we look at spirits, they have been able to be the alcohol of choice for night clubs and nights
out.
Labatt Brand Strategy
At Labatt, our brands are the foundation of the company, the cornerstone of our relationships with consumers,
and the key to our long-term success.
Values Based Brands
All of our brands must have clearly defined and consistently communicated values, to make them what we refer
to as Values Based Brands. The process of defining these values is a key discipline for all marketing activities
in our business and is proving particularly powerful in renovating (ie. new packaging) and innovating (ie. new
product innovations like Bud Light Lime) our premium brands around the current and changing habits and
preferences of consumers.
The intent of the Values Based Brand approach is to build an enduring emotional relationship with consumers,
based on their lives and their values. It starts from the consumer, not the beer category. This is important
because emotional connection drives purchase intent, and preference is a key driver of market share.
Bud Light Background
In April 1982, Anheuser Busch introduced Budweiser Light into the burgeoning light beer market and
promoted it as an extension of its namesakes quality and heritage. Production began in Canada in 1986;
th
Labatt was the first brewery to produce Bud Light outside the U.S. Bud Light has become Canadas 4
rd
(Quebec 3 ) largest brand and is the fastest-growing Top 10 Brand. Bud Light is a light-bodied brew with a
fresh, clean and subtle hop aroma, delicate malt sweetness and a crisp finish for ultimate refreshment. In
2009, Bud Light introduced Bud Light Lime to the beer category, a beer with a crisp, clean finish and the
taste of freshly squeezed lime for ultimate refreshment. Since the launch of Bud Light Lime, the brand has
also introduced and Bud Light Lime Mojito (summer 2012).

Labatt Breweries of Canada

Bud Light
Consumer Portrait
Meet Marc, our Trendseeker. He is a 21-year old high school grad (69%), either currently in post-secondary
school (43%) or working his first full-time job (55%). He is single (79%) and rents his home (32%), sharing
accommodation (21%) with his bros.
Consumer Values
The Bud Light target consumer is one who seeks adventure in his day to day life and who values looking good.
As such, he is always looking for brands that will help him make a good impression upon others
The Opportunity
As part of AB InBev, Bud Light has pioneered marketing strategies that have created enduring bonds with
consumers so that they enjoy our brands time and again. As one of the beer leaders in Canada, we constantly
challenge ourselves to engage new entrants into the alcohol category to ensure long term growth. More and
more entrants are looking to other categories and a multitude of brands to satisfy their needs in various drinking
occasions.
The specific opportunity is to develop a brand strategy that will engage new legal drinking age consumers
(LDA) and ultimately drive consideration of the Bud Light family brand.
Bud Light Lime Mojito
In 2009, Bud Light Lime became Canadas biggest beer innovation of the decade. Building off the success of
Canadas #1 flavoured beer, in 2012 we introduced, as a limited summer release Bud Light Lime Mojito.
Inspired by one of the worlds most popular cocktails, Bud Light Lime Mojito is a light beer with an exceptionally
refreshing sweet taste. Bud Light Lime Mojito is a premium light beer with the subtle twist of natural lime and
mint flavours, and at 4% alcohol, delivers the easy-drinking and refreshing taste of Bud Light Lime.
Bud Light Lime Mojito was an overwhelming success in 2012, and due to popular demand, will be coming back
in 2013 for a second limited time summer release.
Nationally Bud Light Lime Mojito oversold forecast by over 35%
Bud Light Lime Mojito achieved a 0.4 share nationally in 2012
Bud Light Lime Mojito outperformed the leading ice tea beer innovation in terms of likeability by 11%
Bud Light Lime Mojito outperformed the leading ice tea beer innovation in terms of likelihood to
consume the liquid by 9%
Hit an all time high 57% brand awareness amongst beer drinkers in summer of 2012.
You will find in the appendix 2 the existing packaging that were launched in 2012, the different visual material
that supported the launch.
For its launch in 2012, the strategy was to display Bud Light Lime Mojito with Bud Light Lime in order to create a
mega-brand impact in store and thus creating a bigger impact for consumer. (See appendix 3 for example)
The Challenge
nd

How should we position Bud Light Lime Mojito during its 2 year of activity in the Quebec market in order to
grow in the share of throat against other industry categories and also grow inside of the beer category without
cannibalizing our current portfolio of brands? Your strategy should incorporate the brand positioning, media
campaign and brand activation to achieve these objectives. To do so, you have a budget of 3,5M$.

Labatt Breweries of Canada

Bud Light
Appendix 1 Industry Growth

Labatt Breweries of Canada

Bud Light

Appendix 2 Bud Light Lime Mojito Packaging

Labatt Breweries of Canada

Bud Light

Appendix 3 Bud Light Lime Mojito Execution

Off-Premise execution

On-Premise execution