Annual Report - SABMiller

SABMiller plc Annual Report 2010 Strategic priorities 17Blue Moon risesin a falling marketAlthough much of the beer market in the USA hassuffered from the economic slowdown and a trendamong some consumers to switch to cheaper beers,craft beers have continued to sell well among drinkerswho value their heritage and distinctive characteristics.During the year MillerCoors launched a programme tobuild on the success of the country’s leading craft beer,Blue Moon. Breaking the tradition that craft beers rely on‘discovery’ and word of mouth rather than advertising, thebusiness mounted a national advertising campaign, oneaim of which was to increase sales through supermarketsand bottle stores. To create further buzz around theproduct, it also launched the special edition Blue MoonGrand Cru in a distinctive indigo bottle to mark the bluemoon (the second full moon in a calendar month) thatoccurred on New Year’s Eve, 2009. The move attractedmore attention to the Blue Moon brand and followed twoother seasonal brand extensions, Honeymoon and – in thefall – Full Moon.Coupled with wider distribution, the advertising campaignand the flow of innovative variations on the product havehelped to keep Blue Moon relevant and interesting to itsconsumers. Sales for the year were up by high single digitpercentage growth and the brand continues to make avaluable contribution to MillerCoors’ overall results.Transforming a brandwith community marketingBy 2008, Hungary’s third largest mainstream brand, Arany Ászok,was losing the loyalty of its consumers, especially in its home region.To become more relevant and re-establish brand loyalty, the Hungarianbusiness carried out a detailed analysis of the market and Arany Ászok’starget consumers, namely blue-collar workers aged 30 to 49.The crucial insight was that these were the country’s unsung heroes,that what they valued was recognition and the sense of belonging totheir community, and that where they found it was playing or cheeringfor the local amateur football team.The upshot was an innovative community marketing programme thatnow sponsors approximately 1,000 town and village teams. As well asreceiving free football kit, local teams are publicised on billboards and inthe media in a way that links Arany Ászok with local pride. At the heartof the programme is the local bar through which SABMiller channels itssupport – many teams have an official pub where the sponsorship contractis signed. Themed packs and promotions carry the message into storesthat are also keen to support the local heroes.The results have been dramatic. Loyalty measures are rising, as is AranyÁszok’s share of value within the segment. In a market still suffering fromrecession with volumes declining and pubs closing at a rapid rate, thebrand has gained access to many new outlets. Furthermore, its revenueper hectolitre is up as its brand equity has strengthened and there is lessresorting to price promotions.A new opportunity in local premium brandsThe group’s strategy within each market is to provide a full portfolio of brands with offeringsat each point on the price ladder. Between local mainstream beers, which make up the vastmajority of sales in most markets, and top-end international premium brands, SABMiller isfinding attractive opportunities for local premium brands. More affordable than internationalpremium brands, the concept trades on local provenance and pride and widens the choicefor aspiring consumers wanting an affordable luxury.Local premium brands have proved very successful in Europe and Latin America and the same conceptis now being applied in Africa.SABMiller’s strategy for local premium brands in Africa is to make each brand unique as ‘the premiumbeer from here’ while positioning its brands on the basis of common insights and taking a sharedapproach to marketing and advertising. That works because local premium brands tend to be drunkfor the same reasons on the same occasions by similar types of consumer. Success lies in combiningcross-border skills and the benefits of scale with a distinctive local twist in each market.Local premium brands in Africa have grown by 80% compared with the prior year. The star has beenMozambique’s Laurentina Preta, up more than 80%, with other strong performances from Maluti inLesotho and Ndovu in Tanzania. The recent launches of Nile Gold (Uganda), Mosi Gold (Zambia),Sebebe (Swaziland) and Laurentina Premium (Mozambique) have all been well received.Overview Business review Governance Financial statements Shareholder information