2017 alcoholic beverage trend...

2017 Alcoholic Beverage Trend

Analysis

April 28, 2017

-2-

Data in this portion of the presentation can be found in the following BMC resources:

The One-Stop Destination for the Beverage Industry

-3-

2017 State of the Industry

• Total Beverage Alcohol

• Spirits

• Wine

• Beer

-4-

On a shipment basis, the beer industry grew modestly for the 3rd consecutive year. The second half of the year beer volume eroded with shipment volumes declining 0.5% and depletions declining over 2%

Beverage Alcohol Market Shipment Growth 1995 – 2016e

% C

ha

ng

e

-0.3%

1.7%

1.0%0.9%

1.0%

1.1%

0.8%

1.2%

0.0%

0.7%

0.0%

2.2%

1.2%

0.2%

-2.1%

-0.9%

-1.8%

1.3%

-1.4%

0.7%0.1%

0.3%

-1.9%

1.1%

-1.0%

1.4%

2.6%

3.1%1.1%2.0%

3.8%4.1%

2.8%

3.7%

2.8%

2.1%1.6%

1.9%

3.6%

3.5%

0.8%

1.6%2.3%

2.4%

1.1%

7.2%

3.7%

1.3%

3.1%

4.4%

1.0%

7.0%

3.4%3.9%

3.8%

3.6%

3.4%

0.5%

2.2%

2.7%

5.2%

3.3%4.0%

0.8%

3.0%

1.5%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Beer Spirits Wine

Source: BMC Strategic Associates, Wine Institute, DISCUS

Acquisition of ABI by InBev and MC by

Molson Coors

Beverage Alcohol Trends

-5-

83.3%

10.5%

6.2%

2011

Beer

Wine

Spirits

82.3%

11.0%

6.7%

2016

Beer

Wine

Spirits

• Since 2011 Beer had continually lost share of Beverage Alcohol volume to both Wine and Spirits

7.63 Billion Gallons 7.78 Billion Gallons

-6-

52.6%

16.0%

31.4%

2011

Beer

Wine

Spirits

50.7%

16.3%

33.0%

2016

Beer

Wine

Spirits

• Beers losses are more pronounced particularly to Spirits when looking at it on a servings basis. While Beer has lost 1.0 share points on a volume basis, that loss is 1.9 share points on a servings basis while Spirits share has gained

128.68 Billion Servings* 134.57 Billion Servings*

*12 oz. beer, 5 oz. wine, 1.5 oz. spirits

Beverage Alcohol Category Share by Servings

-7-

55.0%

13.7%

31.3%

2011

Beer

Wine

Spirits

54.2%

13.8%

32.1%

2016

Beer

Wine

Spirits

• However beer share lost .8 share points in the on-premise while Spirits (+.8) and Wine (+.1) share gains are both lower in bars and restaurants

30.6 Billion Servings* 30.5 Billion Servings*

*12 oz. beer, 5 oz. wine, 1.5 oz. spirits

Beverage Alcohol On –Premise Category Share by Servings

-8-

The premiumization trend continues to strengthen while the influence of the on-premise has returned, this is similar to before the great recession and; at the same time, e-commerce is begining to take hold in beverage alcohol

• While on-premise, high-end and ecommerce accelerate, other strong recent trends are moderating to include flavor growth, rate of innovation and craft

Key Beverage Alcohol Trends

Strengthening Trends

Moderating Trends

Premiumization - across all segments

On-premise Influence

Growing e-commerce / home delivery business

Flavor Introductions

Craft no longer leading growth

Slowing new product launches

Evolving Beverage Alcohol Market


-9-

While certain trends have accelerated, others have moderated; although certain attributes remain extremely relevant

Flavor is Moderating

Craft No Longer Driving High-end

Growth

Slowing New Product Launches

• Although flavor addresses consumers seeking variety, overall volume growth from flavors is growing modestly

Slowing Alternative Beverage Alcohol (ABA) growth

Momentum back to traditional straight spirits Millennials moving more to wine with 1/3 of wine

consumers now Millennials

• Number of new product introductions has slowed as failure rate has risen

Flavored Whiskey/Vodka product introduction has slowed as failure rate has risen, 32 entries in 2016 versus 90 in 2012

Seasonal beers has slowed, e.g. Sam Adams attributes large part of its declines due to weakness in seasonal beer segment

• Craft no longer best performing segment in beer or spirits

Craft beer growth only 5% - 6% in 2016 Craft spirits grew only 13% in 2016 Craft spirits slowed although it is only a

modest 2.5 share


-10-

Trading-up began over two decades ago and has accelerated in recent years as overall per cap consumption of beverage alcohol has been flat to down since 2009

• Not surprisingly, other trends that support trading-up are gaining momentum

On-Premise

• Drink menus showcase above premium brands

• Majority of consumers choose cocktail based on flavor profile, not brand

• Strong connection between on-premise to off-premise – 2/3 who like a brand will buy it off-premise

• Flights expanding across all categories not just beer

• Education/story key engagement attribute for brand

Growing E-commerce / Home delivery business

• Amazon increasing its offerings and setting up physical stores from which to deliver Beverage Alcohol

• Direct shipments to consumers of wine hit all time record 5.0 Million cases in 2016 (3.0 Million cases in 2013)

• Delivering to home from retailers accelerated through sites like Drizzly.com

Premiumization

• Consumers view high-end brands as unique and contemporary “cool”

• Perceived healthier products viewed more premium

• Unique aging methods differentiating product and supporting premiumization, e.g. Whiskey fermented in Pinot age casks or single malt scotch finished in ex-IPA barrels


-11-



• Spirits

• Wine

• Beer

-12-

Current Key Beverage Alcohol Market Trends in Spirits

Spirits

• American whiskey, +5%, remains the hot segment, aided by the strength of rye whiskey and small batch and single barrel offerings

• 2016 marks the 4th consecutive year whiskey has either equaled or surpassed the growth of non-whiskey, previous to this current trend non-whiskey outgained whiskey for over 20 years

• Irish whiskey, Tequila, and Cognac all experienced solid growth

• Craft continues to grow rapidly at 13% but still category represents only 2.5% of spirits

• With the growth of the craft segment, brands are highlighting their craft like qualities with authentic brand messaging

• Flavors, in the vodka segment posted a slight upturn following three consecutive years of declines with Mango, Citrus and Apple flavors all posted positive results

• Many “hot” brands last year were not premium-priced (i.e. Rum Chata, Fireball, etc.), but their growth noticeably slowed in 2016

• Trading up accelerated in spirits with high-end and super-premium growing 5.5% and 10.8% respectively as per DISCUS


-13-

Source: Beverage Marketing Corporation

U.S. Distilled Spirits Market 2010 – 2016

192.3

199.0

205.1 207.9

210.8

214.4

218.7

175

180

185

190

195

200

205

210

215

220

225

Millions of 9-Liter Cases

2010

2011

2012

2013

2014

2015

2016

+3.5%

+3.1%

+1.4%

+1.3%

+1.7%

+2.0%

-14-

P: Preliminary Source: Beverage Marketing Corporation

U.S. Distilled Spirits Market 2011 – 2016

$61.2

$64.1

$65.8

$67.3

$69.2

$71.3

$56.0

$58.0

$60.0

$62.0

$64.0

$66.0

$68.0

$70.0

$72.0

$74.0

Billions of Dollars

2011

2012

2013

2014

2015

2016p

+3.5%

+4.8%

+2.2%

+1.3%

+3.0%

+2.6%

+2.9%

-15-

Adult beverage consumer attitudes

Bars and full-service restaurants are top locations for adult beverage occasions

• Bars are top-of-mind when consumers are sourcing beer, mixed drinks, and straight spirits away from home. Restaurants and bars share top-of-mind status when consumers are seeking wine.

Trial on-premise drives off–premise purchase, especially for younger consumers

• Roughly two-thirds of consumers who try and like a beer, wine or spirits drink in a restaurant or bar are likely to purchase the same product at retail. Younger consumers express a higher likelihood of doing so than their older counterparts.

Knowledge is key, bartenders are key gatekeepers

• The majority (80%) of cocktail drinkers believe it is important for servers to be knowledgeable about the spirits offering, and three-quarters (73%) prioritize a variety of spirits selections.

Flavor is driver of cocktail consumption

• The majority of consumers (60%) choose a cocktail based on its flavor profile than by its base spirit; younger consumers are more likely to do so, indicating the importance of flavor.

Key insights

Source: Beverage Marketing Corp., Technomic Inc.

-16-

Flavor feud: Vodka vs. Whiskey

*includes flavored whiskey and whiskey specialty cordials/liqueurs

23.3%

11.4%

-0.3% -1.4% -0.3% 0.3%

56.3%

37.9%

54.5%

39.4% 34.2%

24.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2011 2012 2013 2014 2015 2016

Flavored Vodka Flavored Whiskey*

Volume growth


+2.3 Mil cases

+150K Cases

-17-

Flavor feud: Vodka vs. Whiskey

*includes flavored whiskey and whiskey specialty cordials/liqueurs


71

78

63

32 26

20

3

12 21

25

15 12

0

10

20

30

40

50

60

70

80

90

2011 2012 2013 2014 2015 2016P

Flavored Vodka Flavored Whiskey*

Product introductions

-18-


Spirits Category Volume by Type 2010 – 2016P

Vo

lum

e in

Th

ou

sa

nd

s o

f C

ase

s

Non-Whiskey +2.1%

Whiskey +2.3%

2010-2016P CAGR

Since 2013 growth of Whiskey has either equaled or surpassed that of Non-Whiskey, a trend not seen in decades

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

2010 2011 2012 2013 2014 2015 2016

-19-


Whiskey Category Volume by Type 2010- 2016P

Vo

lum

e in

Th

ou

sa

nd

s o

f C

ase

s

Straight American Whiskey +5.4%

Canadian Whisky -0.3%

Scotch Whisky -0.4%

Blended American -1.7%

Irish Whiskey +15.6%

2010-2016P CAGR

While Whiskey is helping drive the overall industry, within it Straight American Whiskey and Irish Whiskey are the drivers

0

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013 2014 2015 2016P

-20-

Innovation in the industry spurred by consumers desire to try new thing • Trend started with flavored vodka now flavored whiskey • Similar pushing the envelope trend that’s currently occurring in craft beer is occurring in

craft spirits

Some examples of these flavored products include new flavor launches such as: • Strawberry & Cream flavored gins • Pumpkin flavored rum • Bacon infused Bourbon • Pistachio Liqueur

There has also been an influx of different aging methods utilizing wine and beer barrels to produce unique flavor profiles, including: • Rye whiskey finished in Sherry casks • Whisky finished in Pinotage casks • Sherry matured Anejo Tequila • Cabernet finished Extra Anejo Tequila • Single Malt Scotch finished in ex-IPA barrels

Ways Suppliers Are Staying Ahead of Todays Consumers

-21-

Number of Craft Spirits vs. Beer Producers Comparative Time Periods

*Craft is defined as a producer that have no more than 750K proof gallons removed from bond and not openly controlled by a larger supplier.

Source: TTB, ACSA

204 280 455

656 906

1,163 1,315

3,422

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Craft Spirits

199 247 284 312 359 446

601

1,564

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Craft Beer

• Craft spirits suppliers are growing at a faster rate than craft breweries at comparative time periods

• If craft spirits grows at a similar rate 5 years out as craft breweries then the number of suppliers would exceed 3,400 by 2021.

+36.4% CAGR +20.2% CAGR

-22-

Craft Spirits Share of Overall Distilled Spirits Industry


Source: TTB, ACSA

0.8% 1.0%

1.2%

1.5%

1.8%

2.3% 2.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2010 2011 2012 2013 2014 2015 2016P

Craft Share*

Craft Share

-23-

Craft Spirits Retail Sales by Value


Source: TTB, ACSA

$0.7 $0.8 $1.0

$1.3

$1.8

$2.4

$3.0

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

2010 2011 2012 2013 2014 2015 2016P

Billions of Dollars*

Craft Sales

-24-

With the growth of craft spirits over the last few years can we draw a comparison to craft beer and its long term sustainability

• Since the Millennial generation is always seeking innovative flavorful products with a true brand story, craft spirits inherent characteristics play right into that trend.

• Consumers are embracing smaller, craft and locally produced. Authenticity is the key word, messaging conveying authentic brand story

Craft Beer versus Craft Spirits

2016

Source: Beverage Marketing Corporation, Brewers Association; DISCUS; ASCA

• 5,301breweries , up nearly 800 from 2015

• 12% of total beer

• +7% production increase, down from low 20’s in 2015

• Culture that has embraced locally brewed craft beers has enticed more entrants into the marketplace

• 1,315 craft distilleries (+152 or 13.1% from ‘15)

• Estimated at 2.5% of spirits

• About $300,000 to build facility

• Concentrated market with 2% of producers responsible for 60% of the cases

• Wholesale channel could pose a barrier to growth

• Some of the early successful distilleries have been acquired by larger producers , this is unlike the early days of craft beer segment

Craft Beer Craft Spirits

Spirits Market Brief

Q: How often do you consume the following types of alcohol beverages away from home (e.g., at a restaurant, bar or other foodservice location such as a hotel, concession stand, etc.)? Base: 1,500; 192 (21–24), 266 (25–34), 248 (35–44), 266 (45–54), 528 (55+)

How often do you consume the following types of alcohol beverages away from

home? Monthly+

84%

69%

81%

85%

76%

85%

74%

71%

78%

70%

54%

66%

55%

52%

49%

Beer

Spirits

Wine

21–24 25–34 35–44 45–54 55 +

% Overall

70%

62%

67%

2016 2014

71%

63%

66%

Beverage Alcohol Volume On Premise 2012-2016

1800

1810

1820

1830

1840

1850

1860

1870

1880

Millions of Gallons

2012

2013

2014

2015

2016

Source: Technomic, Inc; Beverage Marketing Corporation

• Adult beverage volume decline continues and consumer on-premise drink occasions plateau

-26-


On Premise Beverage Alcohol Dollars 2012 – 2016P

• Dollar sales has grown due to premiumization and higher drink prices • Carefully crafted drink menus, product selections and promotions that showcase premium

and above-premium offerings to prompt higher spend while still delivering on perceived value can result in greater sales and profits.

92,000

94,000

96,000

98,000

100,000

102,000

104,000

106,000

2012 2013 2014 2015 2016P

Millions of Dollars

-27-


On Premise Spirits Category Volume by Type 2010 – 2016P

Vo

lum

e in

Th

ou

sa

nd

s o

f C

ase

s

Non-Whiskey +0.2%

Whiskey +1.0%

2011-2016P CAGR

Since 2011 growth of Whiskey in the On Premise is outpacing both non-whiskey and the overall spirits market

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2011 2012 2013 2014 2015 2016

-28-

46%

43%

57%

48%

50%

32%

28%

47%

4%

5%

1%

4%

4%

2%

4%

3%

Fine-dining

Casual-dining

Bars/nightclubs

Lodging

Casinos

Concessions

Other recreation

Total

% Expecting growth % Expecting decline

Net: 2016 2015 2012

+42 +22 +14

+38 +41 +33

+56 +50 +28

+44 +42 +28

+46 +48 +18

+30 +32 +6

+24 +26 +16

+44 +42 +25

Spirits growth expectations by segment

Base: 650 on-premise operators

• On Premise Spirits volume grew 0.3% in ‘15 and 0.7% in ‘16 • Operators expectation for spirits growth has increased every year since 2012

Source: Technomic Inc., Beverage Marketing Corp.

-29-



• Spirits

• Wine

• Beer

• Implications

-30-

Current Key Beverage Alcohol Market Trends in Wine

Wine

• Domestic shipments were led by Prosecco as sparkling continued to outpace table wine

• Prosecco sales volume was up approximately 15%. This helped lift the entire sparkling wine category to 6.8% growth.

• Millennials have become a driving force in wine sales and now are largest consumer segment at around 1/3 of total consumers

• This age group is now the largest in the industry surpassing Baby Boomers. In addition, these consumers are more adventurous and seek more variety. This age group looks more outside the U.S. for wine, including varietals from Portugal, South Africa, Greece and Austria.

• Direct to Consumer sales hit a new high in 2016, +17.1% to 5 Million cases, the highest rate of growth since 2011

• In addition, Direct to Consumer shipments have shown steady growth during the past six years, growing from less than 3 million cases in 2011 to that 5 million cases mark last year.

• Red Blends continue to outperform, advancing 20%; fits variety trend with Millennials

• Wine growth also spurred by strong growth of Rose and Sauvignon Blanc

• Rose enjoyed 20% growth in 2016 and the varietal has doubled in volume since 2012.

• Sauvignon Blanc grew 6.0%.


-31-


U.S. Wine Market 2010 – 2016P

321.2

338.2

345.6

350.3 354.1

356.4 359.0

300

310

320

330

340

350

360

370

Millions of 9-Liter Cases

2010

2011

2012

2013

2014

2015

2016p

+5.3%

+3.1%

+1.1%

+1.4%

+0.7% +0.7%

+2.2%

-32-


U.S. Wine Market 2011 – 2016P

$42.5

$43.8

$44.8

$45.5

$46.1

$46.8

$40.0

$41.0

$42.0

$43.0

$44.0

$45.0

$46.0

$47.0

$48.0

Millions of Dollars

2011

2012

2013

2014

2015

2016p

+3.5%

+2.9%

+1.7%

+1.3%

+1.5%

+2.3%

+1.3%

-33-

11.3%

13.6% 14.2%

19.1% 18.3% 18.0%

15.3%

17.7% 18.2%

27.1%

33.9% 33.6%

27.2%

16.5% 16.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

2011 2015 2016p

Super-Premium ($15.00 and above) Premium ($12.00-$14.99) Popular Premium ($9.00-$11.99)

Fighting Varietal ($6.00-$8.99) Value ($5.99 and below)

Table Wine Volume Sales by Price Tier 2011, 2015 & 2016p

Sweet spot for Millennial consumers

-34-

23.7% 22.5%

11.9% 13.4%

11.1%

9.1%

4.6%

7.5%

6.0%

7.2%

9.8%

6.2% 5.1% 5.3%

1.4%

4.3%

26.4%

24.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

2010 2016p

Chardonnay Cabernet Sauvignon Merlot Pinot Grigio Pinot Noir

White Zinfandel Blush/Rose' Red Blend Other

Table Wine Volume Sales by Varietal 2010 and 2016p

• Despite a lower share of Table Wine volume, Chardonnay has experienced an uptick in volume over the last three years. It has ceded its share to faster growing varietals

• Red Blends share of Table Wine has increased to 4.3% in 2016 from 1.4% in 2010.

-35-

Net: 2016 2015 2012

+60 +44 +30

+30 +25 +20

+18 +14 +9

+41 +30 +38

+26 +22 +12

+22 +22 +22

+16 +28 +16

+28 +23 +19

64%

33%

23%

45%

30%

26%

20%

32%

4%

3%

5%

4%

4%

4%

4%

4%

Fine-dining

Casual-dining

Bars/nightclubs

Lodging

Casinos

Concessions

Other recreation

Total


Wine growth expectations by segment



-36-



• Spirits

• Wine

• Beer

-37-

Current Key Beverage Alcohol Market Trends in Beer

Beer

• Imports have become the growth leader within beer driven by Constellation Brands. Craft and FMB’s have slowed, impacting overall high-end growth

• ABI and MillerCoors continue to see declines in their domestic premium and below brands. This weakness drove domestic beer depletions declines to over 4% in 2H 2016.

• As with wine and spirits, the high-end is driving growth within beer

• The beer industry faces headwinds both inside and outside the category. The influx of craft beers to the marketplace has made competition for cooler space at retail fierce.

• Craft

• Consumers continue to thirst for the newest brand or flavor, this segment of the market is characterized by increased consumer experimentation and without true brand loyalty.

• IPA’s and barrel aged beers remain hot segments within craft. Aging your beer in different types of barrels from wine to whiskey barrels produces unique flavor profiles. Moreover gose’s or sour beers have gained traction.

• Locally focused craft brands have found success, making connections in their home marketplace and engaging those consumers at the expense of large national craft brands

• Imports

• The pullback in craft beer growth has aided in imported beers sustained growth. Heritage and lifestyle marketing has also provided a boost to imported beer, particularly those from Mexico.

• Alternative Beverage Alcohol continue to evolve as hard seltzers are newest in the segment


-38-


U.S. Beer Market 2010 – 2016P

2,859.0

2,822.0

2,856.3

2,829.8

2,839.9

2,849.3

2,843.6

2,800.0

2,810.0

2,820.0

2,830.0

2,840.0

2,850.0

2,860.0

2,870.0

Millions of 2.25 Gallons Cases

2010

2011

2012

2013

2014

2015

2016p

-1.3%

+1.2%

+0.4%

+1.4% +0.3%

-0.2%

-0.9%

-39-


U.S. Beer Market 2011 – 2016P

$90,245

$92,949 $93,363

$95,094

$96,726

$98,586

$86,000.0

$88,000.0

$90,000.0

$92,000.0

$94,000.0

$96,000.0

$98,000.0

$100,000.0

Billions of Dollars

2011

2012

2013

2014

2015

2016p

+3.5% +3.0%

+1.9%

+1.3%

+1.6%

+0.4%

+1.7%

-40-

Net: 2016 2015 2012

+66 +44 +34

+58 +62 +51

+52 +43 +27

+63 +44 +42

+62 +60 +34

+56 +52 +36

+38 +61 +38

+56 +51 +38

Beer growth expectations by segment

70%

62%

56%

63%

66%

60%

38%

59%

4%

4%

4%

0%

4%

4%

0%

3%

Fine-dining

Casual-dining

Bars/nightclubs

Lodging

Casinos

Concessions

Other recreation

Total




-41-

Note: High-End segment includes International Brands and Malt Alternatives

Mainstream and value segments continue to decline and lose share. While high end continues to grow. • Michelob Ultra and craft beer lead high-end growth.

Source: BMC Strategic Associates

Segment Vol % Chg

Value Brands -3.7%

Mainstream -3.4%

Super-Premium +6.4%

High-End +6.6%

Beer Market Share by Segment 2015 vs. 2016

Beer Market Vol Change by Segment

2015 vs. 2016

1

Ryan Barker: Managing Partner [email protected] www.Berafindlove.com

mailto:[email protected]

http://www.berafindlove.com/

3

Case 1

HERE lies the gap between marketing & finance

PROMOTION

Case 2 EMOTION

4

emotion not promotion

5

The relationship consumers have with a brand drives its

economic value

Growth in economic value starts by knowing the current quality (and direction) of that relationship

5

BERA

4,000 brands

200 categories

up to 1M participants per country

cloud- based

census- matched (no weighting)

real- time

BERA

BERA Brand Management |

Brand Management

ACQUIRE RETAIN REVITALIZE

6

• Brand is meaningful and unique to consumers despite lagging familiarity and regard

• With smart tactics and strategy, brand’s growth and earnings prospects are strong (high multiple)

• Brand has high familiarity and regard, but consumers are fatigued – they no longer see brand’s meaningfulness and uniqueness

• Absent break-out innovation of some kind, brand’s growth and earnings prospects are in jeopardy (low multiple) Tomorrow > Today Today > Tomorrow

Brand Equity Relationship Strength

• Five relationship stages describe: ...the degree of connection between a brand and the population it seeks to inspire; ...the degree to which that brand has positive or negative momentum; ... the distance between its current position and available opportunity

begins and ends @ the 75th percentile

7

75% of brands are not loved

REALITY

8

50% of loved brands

LOVE BITES

9

“If it can’t be measured, it can’t be managed”

Management Tension

SOURCE: CMOsurvey.org, Duke University Fuqua School of Business, AMA

Allocation of corporate resource is among the most hotly-contested issues at both executive and operating levels. And, in light of enormous spend and ambiguous metrics, the marketing function is always under tremendous pressure to demonstrate effectiveness and efficiency.

The crucial challenge lies in ensuring the cultural influence of brand output –both managed and unmanaged– is valued as concrete and justifiable. The unfortunate alternative is budget reduction, bruised equity and, ultimately, declining share value.

10

PROBLEM so where is the

11

quantifying in a credible way the economic impact of brand building

(which often biases investment to promotion)

11

12

THIS is the kiss of death

13

CFOs need our help

so let’s focus the conversation

14

is the largest provider of brand intelligence in the market today, delivering assessments on a real-time basis of 4,000 brands in 200 categories with up to 1 million participants per country.

assesses the strength of your brand relative to in AND out-of category brands, based on what’s important today vs. tomorrow. also sizes unique engagement audiences and informs marketing mix optimization to reach brand love

The Linchpin You can’t get to actionable finance without scale – local market investment requires local market measurement and an adaptive market-level view.

15

The Economics of Brand Love In pursuing sustainable, profitable differentiation, our ultimate goal is to reduce price sensitivity. We do this through all of our actions; actions that have an associated cost BUT also a character.

Scenario 1 overhaul product, expand distribution

Scenario 2 modify communications, improve customer service, minor product refresh

16

So what does it mean in the real world when you achieve a higher –or lower– score?

NEW DATING BOREDOM DIVORCE

0

50

100

LOVE

Observations of Monobrands across 80 Sectors

[aka In what stage of relationship development is my brand?]

“Relationships take work!”





62 51


My Emotional DNA



NOW THEN

2016

2017 (up until this week)

score


My Emotional DNA

28

Ryan Barker: Managing Partner [email protected] www.Berafindlove.com

mailto:[email protected]

http://www.berafindlove.com/


Brand Management

May-2-17 29

Tomorrow > Today Today > Tomorrow

Some of the Most Loved Brands among

LDA Millennials



Brand Management

May-2-17 30


AUTOMOBILES

SUPERMARKETS & WAREHOUSE

CLUBS

INDOOR & OUTDOOR FURNITURES

QUICK SERVICE RESTAURANTS

CABLE NETWORKS & PROGRAM

DISTRIBUTION

HOTELS

TAXI & LIMO SERVICES

It is instructive when brands break

the ceiling of their category

Brands from dozens of different categories have earned their way beyond traditional boundaries and into the hearts of LDA Millennials



Brand Management


May-2-17 31


It is equally instructive when brands

return from the brink of irrelevance

It is very possible for brands to defy gravity and rekindle lost love


Brand Management

May-2-17 32

THEN

Once-Powerful American Brands that Changed Their Futures

Irrespective of their operating reality or category, this fraternity of brands is united in their productive reaction to a declining Tomorrow. Their chosen routes overcome the difficult crawl out of Boredom (and in some cases Divorce), and manifest in either a strong reset of consumer perceptions or a reminder of what made them special in the first place.

exciting

real

hardworking

family-oriented

successful

successful

cool daring

leader

charming


Sample: USA BERA Brand Management Survey,, Total Population


Brand Management

May-2-17 33


Sample: USA BERA Brand Management Survey, Q1-2016, Millennials, Ages 21-34

Can an alcohol brand be Loved?

0

100

50

ACQUIRE REVITALIZE SUSTAIN

2017 alcoholic beverage trend...

Documents