‘Humans are tribal creatures’: Lion Breweries on the future for alcohol brands

In an interview for the WARC Marketer’s Toolkit 2023, Anubha Sahasrabuddhe – CMO at Lion Breweries – spoke to WARC’s Rica Facundo about the importance of local brands, rethinking segmentation, and the data conundrum.

Anubha Sahasrabuddhe, CMO, Lion Breweries

How do you see trends in deglobalisation affecting the marketing landscape in APAC and in the alcohol category? Is it making consumers or brands less open or closed?

If I'm agnostic of the category, there's a bifurcation in that question. On the one hand, supply chain disruptions, wars and COVID have created a strong sense of provenance and national pride that has created great opportunities for local brands to really have a distinctive point of view. Through this chaotic period, consumers also have a better understanding of the power of local support.

This is also playing out in the alcohol category with the continual rise of local craft beers and locally distilled spirits. It has put the pressure on the traditionally safe, trusted choices of global brands. Supply chain disruption has meant unreliability in access and therefore a real questioning of what matters to consumers.

On the flip side, I think there are certain categories where there’s huge trust in the global brand, whether that’s an Oreo or a Coke, because they have such local roots. Because of the equity and trust of the brand, they're seen as local anyway.

There are now different communities and “tribes” that marketers can speak to. Does this cause more problems for marketers who now have to speak to more types of people?

Regardless of what era of marketing we’re in, humans are tribal creatures. And it's really technology that has allowed us to identify humans in far more differentiated ways. When I started in marketing, the only way to look at your consumers was like “teens” and “mums”. These were very homogenous groupings of people that don't actually take into account what binds them other than their demographic or life stage.

Now we are able to aggregate or cluster through profiling around values or passion points. But whether you can identify three or 30 relevant tribes, what has to be unchanging is your brand’s core values.

The ability to understand shared values via different tribes enables you to reach consumers that you would never have reached. You can now have groupings such as “I may be a mum in my 40s but I love gangsta hip hop”. And so, when the clever algorithm feeds me content on the latest, whether it's street fashion or music, it's because it understands that regardless of my age, that's what matters to me.

How is this specifically playing out in the alcohol category and in Australia?

The segmentation that we’re doing in the total alcohol category is much more interesting because it's what they are coalescing around, whether that links to art or culture. This informs better strategies of where to reach and service our offerings in the right place, whether that's a physical place or with merchants.

In countries like Australia, we've got the added layer of being such a multicultural country. You can’t be so binary around ethnicities. It makes it really interesting for marketers to go beyond the obvious.

If this type of segmentation is important, what are your thoughts on the claim that the era of mass marketing is dead?

It’s so easy to say that mass marketing is dead. But when you get into the “one to one” or “one to many”, it’s not either/or but both.

The reality is that for a category like laundry detergent, penetration is 100%. So you actually need to reach everyone to talk about your brand difference. For other categories, it makes no sense to reach 90% of the addressable audience. But now we have the ability to minimise wastage and to actually get to the right people faster, with a better likelihood of conversion probability.

What is the biggest challenge your brand is facing in today’s fragmented and increasingly regulated media landscape?

For FMCG and, within that, alcohol, the biggest thing that scares us is the cookieless world coming so fast. All that profiling and tribal segmentation I talked about earlier would suddenly disappear without first-party data.

As an FMCG brand, we are not  a high involvement purchase where there’s a high value of data exchange with consumers. When you're buying and transacting on a $5 product, it’s harder to build up your own first party data. We are trying to unlock what the value exchange is.

For example, if someone is buying a $10 beer in a pub, how do I incentivise you to give me enough detail beyond just your email address? How can I know that this person likes going out on Friday and Saturday, that she likes to start with a beer, move on to a cocktail and that she also likes sports and watches the Grand Prix?

When that disappears and you're caught without enough data on your consumers, then you're flying blind. We would go back to the old “spray and pray" days of not knowing where to focus.

How are emerging platforms or technology impacting your marketing strategy?

Recruiting the next generation is the other big thing on our mind because it’s vital to future-proofing our brand and category. So we start thinking about what platforms they are on and the lack of regulation and safety mechanisms in place. And clearly in the alcohol industry, advertising to minors is an absolute no, so we need to be hyper vigilant. 

So it’s still the Wild West. I don’t know a single marketer who isn't trying to figure out how to get the very complicated youth of tomorrow into their brands to ensure that the brand is renewing that pipeline of recruitment.

Data is undoubtedly important but there's the first-party data that a brand can control on the platforms it owns, and then there’s data on the other platforms. What’s your approach for collecting data on platforms you don’t own?

Brands are never going to have the same type of data that those partners or platforms have. It’s a really complicated issue. But you have to be comfortable with how they've captured the data. I was in the US when everyone boycotted Facebook. But then the reality sets in and marketers realised that without Facebook, you're not going to make your reach.

We’re trying to build our own aggregated data lakes. We need to ingest multiple data sources. None of us are experts at this. But we have to be more responsible than just relying on the second party data that our media agency might be collecting for us. Otherwise the regulation will hit us versus us shaping what that self-regulatory mechanism is.

What are the brand guardrails before you start playing with new technology or platforms?

I’m acutely sensitive to the fact that we’re in the alcohol industry, which responsibility vis a vis minors is paramount. When I was at Mars and Coke, you thrive on being first mover, and then test and learn as you go. But of course, they were the first because what’s the risk? What is the downside for Nike to be in the metaverse but continuing to reinforce that they are trailblazers, which is a key part of their brand? We can’t do that, so we need to take a wait-and-see approach because the risk and the downside of getting in there too quick, untested and unregulated could be damaging for us.

So we are cautiously observant. We’ve got a lot to do just to get our foundations right to be future fit. This means making sure that we are as good as we can be with the data we can collect, control and then leverage back out right versus running to the next hottest thing which is unproven. We don't have the luxury of just frittering away money that's got zero ability to even suggest it's got the potential for good returns versus optimising the returns we need to drive right now.

What are the key category and consumer challenges that your brand has experienced because of the economic climate?

It’s challenging for beer right now in Australia. And it's an accumulation from a post-COVID world into now one where there's high inflation.

There’s a shift in consumer behaviour of people pulling back on going out to the pubs and bars, which are our most profitable channels. And then in your traditional retail, such as liquor stores, there's a reduction in frequency. If a consumer is faced with “do I need to buy enough for dinner or a case of beer?”, I think you know who's going to win. We're also seeing declines in package sales, as we lap last year's lockdowns.  So you've got that impact at what I would call the mainstream level within the category.

What are the opportunities you are seeing?

It’s in the trade up and in small rewards. It’s the lipstick effect happening. We’re seeing growth in spirits because when you buy a bottle of spirits, it's going to last you longer than beer.

It’s the volume/value pain. So whilst you're seeing a dip in volume share and volume, you've got an opportunity to at least mitigate some of that through value creation. You have to make sure you've got the right offerings from a trade up perspective and make sure that in the mindset of consumers right now, you're making sure that that you have something the consumer is willing to pay more for in that moment of savor or reward.

How has this impacted your brand strategy?

What scares me is getting trapped in the middle. If you’ve got clear offerings that are sitting in premium trade up, it’s clear that you can position it to consumers as a reward and that they deserve indulgence. On the opposite end, you have pure value which is quality and affordable accessibility.

And then there’s the messy middle where I've got a few brands. These are brands which are still in the turnaround phase in terms of building more equity to create value.

So what would be the most important metric of success that the brand will be focusing on next year?

It's brand power and brand premium. All the short-term metrics that we usually track are going to be all over the place.

So to me, it’s about the output measures that are annualised to give us a sense of the northward trajectory of where the portfolio is going to be placed for the future.

Two things will tell us if they're moving in the right direction. We're actually saying what we said we would do, which is to invest in our brands. That means we should come out on the other side with stronger brands that have improved their relative premium in the market because of it.