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United Breweries’ adspend up 20% in 2020, to focus on TV and digital

Investing 60% in ATL activities, the company will focus more on non-alcoholic beverages this year. The alcobev industry is growing at a low single-digit but the company expects a faster rate, UBL’s Marketing Head Gurpreet Singh tells BestMediaInfo.com

UBL’s Marketing Head Gurpreet Singh

United Breweries, always known for its alcohol brands, now has a flourishing non-alcoholic category. In fact, one of its products, Heineken 0.0, has become the highest selling brand in the non-alcobev category in the world in just three years of its inception — keeping the spotlight on the category this year. The company, however, still gets bulk of its revenue from its alcobev portfolio. 

“Certain global trends seem to indicate that consumers are becoming more anxious about how much alcohol they are consuming and there is a drive towards health. Thus, we are investing a lot on non-alcoholic beverages,” Gurpreet Singh, Head of Marketing, United Breweries, said in an interaction with BestMediaInfo.com.

The company has separate advertising strategies for both the alcobev and non-alcobev brands, which makes it a healthy mix between digital and TV for the company.

“We do a combination of largely TV and digital. And then we have on-ground experiential programmes and associations. TV and digital is about 90% of all media spends. Overall, on ATL, we spend about 60% of all spends. This year, there would be an increase of about 20% in the total adspend. Digital, which was 25% of our adspend last year, will be 30% this year,” Singh said.

With a ban on advertising alcohol brands in India, it is often argued that non-alcoholic beverages of major spirit companies are actually helping promote their alcohol brands. Is this a major reason why UB is focusing on the non-alcobev category?

“It is actually the other way round for us. The traditional thinking is that launching non-alcoholic will help the alcoholic business. For us, this thinking changed in the last three years, primarily looking at the growth of Heineken 0.0. This space is significantly bigger than the alcoholic space. Also, the alcohol business is complex with high-taxed products. In non-alcobev, the production cost is low,” he said.

The brand has been manufacturing beer for over a hundred years now. The bulk of its business still comes from bee, but the non-alcoholic business remains an area of focus. It has around 21 alcobev and around nine non-alcobev brands.

“The non-alcobev space is growing at a very rapid pace. However, today, it is still very small compared to the beer business, which won’t be the case in coming times,” he said. 

Over the last year, the growth of the alcohol beverage industry has tapered down quite a bit due to the economic slowdown. The growth has been in single digits compared with the low double-digit growth that the segment recorded last fiscal year. Major brands, including Pernod Ricard, the second largest spirit maker globally, had 3% growth in the last quarter, which was a sharp decline from the 34% growth the company witnessed a year ago.

On this, Singh said, “Time has come for this industry to adjust the aspirations, where the growth will be low single-digit as compared to other industries. In low single-digit industry growth, there are many players and everybody is hoping to grow faster than the industry. A lot will depend on what brand portfolios they have. Since we have invested in such a huge portfolio over the years, it will help us grow. We expect to grow a little faster than the industry growth.”

Singh said with the recent budget announcement, the industry is seeking more disposable income in the pockets of people and more sales of beverages.

The company had in December last year launched Ultra Witbier. The brand is doing phenomenally well for the company. It is right now available in Karnataka and Goa only but will soon be launched in other key markets, including Maharashtra and Delhi. Talking about how the wheat beer space is growing in India, he said it has a sizeable opportunity.

“About three years ago, it was an expensive and inaccessible space. However, a lot of brands experimented in this category by importing products. There is a sizeable opportunity in the wheat beer category, now,” he said. 

Apart from this, the company recently announced Farhan Akhtar, Ben Stokes and Rakshith Shetty as brand ambassadors for Kingfisher Ultra non-alcoholic, UB export and London Pilsner, respectively, and launched a 30-second campaign. The company also plans short inspirational stories showing the multifaceted nature of millennials.

“We are committed to this philosophy that we are targeting all consumers with a multi-faceted approach and a 30-second ad is a very difficult medium to be able to communicate that strategy. So, we are working towards some content-based ideas for the future through stories to millennials which will inspire them. We would like to narrate some stories built on this multifaceted approach that the brand has picked up,” said Singh.

Talking about the opportunity IPL offers, Singh said it allows service from alcobev brands in certain stands and sections in the stadium, which is a direct opportunity. The brand will take advantage of that and the company plans to shoot ads with cricket players it associates with by March-end.

Info@BestMediaInfo.com

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