BY BRIAN COUCH | October 24,2022
What is happening?
This is not your father’s beer experience – gone are the days of unabashed guzzling and the seemingly unavoidable, questionable judgments that surely followed. This is a new era of measured indulgence, with new trends sweeping across the industry; most notably, consumers are choosing to drink what they consider to be premium alternatives.
Breweries across the country are introducing a bevy of products designed to entice this consumer population with brands that can provide a premium experience in various ways. Low-ABV or no-ABV beers are designed to entice younger consumers who want a hangover-free morning versus a late-night buzz. While not as white-hot as they once were, breweries continue to find a hedge against the explosion of cocktail culture with hard seltzer products including many new novel and non-traditional fruit-flavored options. Low-calorie, gluten-free, and other options aimed at health-conscious consumers continue to generate sales. And we cannot forget craft beers with their more pronounced taste profile and often higher ABV, these small batch brews continue to promote a fewer-but-better approach for those looking to enjoy a glass of cold gold.
No matter their approach, beer companies have certainly grown tired of watching their once dominant share of check evaporate. In my opinion, they have finally embraced a new era of quality-over-quantity and accordingly, have upped their game to do a better job of promoting their products and made their “premium” benefits more visible in stores and bars.
So, who is doing it best?
Well, that depends on your perspective as much as the statistics. If you are looking at overall market share, then the big beer companies are still in the lead. However, if you are looking at the proliferation of craft brewers and beers, then the smaller companies are punching well above weight. In any case, reports of malt beverage death were greatly exaggerated. According to analysis, the newly rejuvenated beer industry is now fighting back against the downward trends of the last decade and are using premium experiences to reclaim lost volume.
On-Premises Marketing for Beer Brands
In the recent stagnant beer market, one brewery has managed to outpace the competition, growing at double-digit rates for 35 of the last 38 years. That brand is Modelo.
So, what is their secret? The key to Modelo’s success has been its focus on on-premise marketing paired with smart sponsorship opportunities.
Like many other brands, Modelo has used the on-premise to build the brand and create a reputation as a premium brand among new consumers. By engaging with consumers directly and creating a strong emotional connection, Modelo has built a loyal fanbase that continues to carry the brand’s momentum forward.
What is On-Premise Marketing?
On-premise marketing focuses on engaging with consumers directly in brick-and-mortar locations. This includes everything from bar and nightclub sampling to on-site experiential activations. The goal of on-premise marketing is to create a strong emotional connection between the bar patron and the brand; a benefit that any premium brand understands inherently.
The advantages of on-premise marketing are numerous. Most importantly, it allows brands to cut through the noise and engage with consumers directly. In today’s age of constant distractions and empty promises, this method of direct engagement is more important and effective than ever before.
On-premise experiences empower brands to communicate the key differentiators which in turn help justify a higher price point. Most people won’t order something just because it costs more, they need the rationale to defend their purchase and the social currency to share it with others.
On-premise marketing activations also create a sense of excitement and energy around the brand, which can be contagious. Finally, on-premise marketing allows brands to collect valuable data about their target consumers, which can be used to produce future brand extensions as well as new marketing campaigns.
Modelo’s Success Story
Modelo has been using experiential marketing to significant effect for many years. Sampling, sponsorships, and experiential activations that convey the brand’s “Fighting Spirit” and premium positioning are key components to the brand’s success story.
Through high-touch, high-energy experiences, Modelo has been able to create a strong emotional connection with its target audience. The brand now has some of the most loyal fans in the industry and they are no doubt helping to drive Modelo’s momentum forward despite a moribund beer segment.
Looking ahead, Modelo plans to continue its focus on on-premise marketing, with an emphasis on delivering premium, unique events, and experiences that cannot be replicated online. This approach has allowed the brand to stay relevant and top-of-mind for consumers, even as the world around them continues to change.
Modelo has been at the forefront of the beer industry for years proving they have a better understanding of consumers than many of the bigger brewers. Longstanding partnerships with the UFC, College Football Playoffs, and numerous fashion brands, have helped to make the brand more inclusive and more relevant to a wider array of consumers than many if not most category-leading brands.
At the front of their strategy, most people recognize the longstanding partnership between the UFC and Modelo, a coup scored by the company when it beat out Bud Light for the Official Beer of the UFC in 2018. And it is not just the increased visibility the sponsorship affords, the brand has done an exceptional job of leveraging the deal to power on-premise activities that perfectly communicate their above-the-line Fighting Spirit campaign.
The brand never misses a chance to use this partnership to fuel on-premise consumption with watch parties, VIP events, and even athlete meet and greets. As the brand has strengthened its UFC partnership the ultra-loyal UFC fans have become more familiar with and passionate about the brand. The loyalty this type of partnership inspires is rare, perhaps only rivaled by the fidelity seen from NASCAR sponsors and fans of a particular race team. The UFC fans are equally stoked about the overall brand and have adopted Modelo as their beer.
Outside of the Ring
Outside of these onsite activations, the two companies have partnered to do community-based initiatives that elevate the lives of those from economically challenged neighborhoods that have demonstrated a fighting spirit. Modelo and UFC kicked off the initiative in Cleveland, to help revitalize Revolution Fight & Fitness in Euclid, Ohio. Together, the partners will outfit the gym with new equipment such as boxing mats, punching bags, and ropes, as well as updated lighting and new paint to benefit people living in the area. In the months ahead, Modelo and UFC will work to update additional gyms located in Austin, Texas; Saratoga, NY; and Seattle.
Experiential and On-premise marketing are powerful tools that every premium brand should consider incorporating into their marketing mix. By engaging with consumers directly and creating an emotional connection, brands can build a loyal fanbase that will help carry them through tough times and drive past the competition in good times. Modelo is living proof; despite lackluster overall growth in the beer market, the brand has managed to succeed by focusing on strategic partnerships, leveraged perfectly via on-premise marketing activations to create truly unique, premium experiences for beer drinkers.
As an aside, Soho has a unique solution for on-premise sampling that works great on fight night or gameday environments when bars are busy, and fans may not want to be interrupted by traditional on-premise tactics.
It is called *compd. It is digital sampling for the on-premise. The system allows guests to scan a QR code, complete a brief survey, enjoy a short, branded video, and then receive a free or discounted beer/cocktail. It is a terrific way to interact with bar patrons in a premium, but non-intrusive way while collecting first-party data along the way.
Do you think on-premise marketing is right for your brand? Let us know in the comments!