Focusing on our values of Challenge and Innovation, Asahi Europe & International Chief Marketing Officer Grant McKenzie shares the story behind the successful sales expansion of non-alcohol beer in Europe.
In February 2021, Peroni Libera 0.0%, a non-alcohol beer offered under the global Peroni Nastro Azzurro brand, became a sponsor of the Aston Martin Cognizant Formula One™ Team. This sponsorship was made possible through the leadership of Asahi Europe and International Ltd. (AEI), which handles the global marketing activities of the Asahi Group. This sponsorship helped us communicate the stylish and premium worldview of the Peroni Nastro Azzurro brand to an even greater number of people around the world and, as such, represented a new major step toward expanding our global brand sales.
The Asahi Group is currently promoting a non-alcohol beer growth strategy with a view to reducing inappropriate drinking and creating new drinking occasions, and Europe serves as the focal point of this strategy. In this region, non-alcohol beer is often sold in the premium price range, which means that the non-alcohol beer growth strategy coincides perfectly with the Group’s premiumization strategy. The non-alcohol beer market in Europe has continued to grow at a double-digit rate each year, and non-alcohol beer is increasingly being consumed not only as a replacement for alcohol beer but as an adult soft drink. At the moment, rapid growth is being seen in not only classic non-alcohol beer but also fruit-flavored non-alcohol beer. Accordingly, the overall market for nonalcohol beer is expected to continue to grow strongly going forward. The Asahi Group boasts a high share in this market in Central and Eastern Europe, including an approximate 60% share in the Czech Republic, a 40% to 50% share in Romania, and a 30% to 40% share in Poland. One of our leading non-alcohol beer brands is Birell in the Czech Republic and Slovakia. Since the brand’s launch in 1992, we have supported growth through various campaigns and introduced new flavors for the brand while leveraging it as a foundation of our overall beer business, thereby cultivating tremendous brand power. At AEI, we plan to expand the non-alcohol sales composition ratio from its current level of between 5% and 6% to 20% by 2030.
The aforementioned Birell now boasts overwhelming brand power in the Czech Republic; however, the road to achieving such brand power has not always been easy. After around 20 years of growth since its launch, Birell’s growth began to temporarily wane, impacted by the emergence of various soft drink alternatives and reaching the peak market share in the category. However, in response to this situation, AEI formed the analysis that non-alcohol beer could offer a new kind of value that people of this day and age desire. AEI’s Chief Marketing Officer, Grant McKenzie, explains how AEI was able to realize a recovery in the Birell brand: “As marketers, we approached Birell as our biggest business opportunity. People wanted a beverage that is low in sugar and calories, refreshing, and offers an adult with an active lifestyle a positive brand experience. We realized we had to grow the category, making it more appealing. We therefore started to enhance the flavor lineup of Birell, in addition to the traditional beer taste. We then began to communicate Birell as a refreshing beverage brewed from natural ingredients without additives that can be enjoyed with lunch or while participating in hobbies, sports, or watching a sporting event. Upon shifting our messaging, we saw the non-alcohol beer market become invigorated once again. Our strategy of developing a product that transcended from something consumed as a beer alternative into something that people actively desired to drink, and communicating it accordingly, is what helped steer Birell back on a course for growth and provided a platform for our other brands in the region.”
Non-alcohol beer was often selected by consumers as an alternative to beer in situations where they felt like they had no other choice, and AEI’s marketing team challenged this kind of negative consumption behavior head on by changing strategies. McKenzie explains how it is possible to generate synergies between alcohol beverages and non-alcohol beverages: “We position non-alcohol beer as an option that caters to the tastes of consumers. The non-alcohol beer market still has plenty of room for growth in light of the rising health consciousness among consumers and the diversification of people’s individual tastes. If we can enable people to feel a brand experience through non-alcohol beer, we can ensure the beer category retains relevance for changing lifestyles. As a result, we will see a positive impact in the beer market overall.”
In order to encourage trial and drive penetration of non-alcohol beer among consumers, AEI believes it is necessary to offer around four to five flavors. Refreshing fruit flavors work particularly well as people want to enjoy beverages during lunch or after playing sports and not everyone wants the taste of beer in all occasions. AEI intends to accelerate investment in non-alcohol beer aimed at building more penetration for the category, including investment in technologies that are able to improve taste by removing only the alcoholic content of beer. Interestingly, not all of AEI was overly positive about non-alcohol beer from the beginning. Amid a lack of production technologies and distribution networks, AEI endured various challenges as it strove to create new markets for non-alcohol beer. McKenzie reflects on the challenges he faced when arriving at his role as the head of marketing: “Although we had brewing techniques and knowledge that we had cultivated for over 100 years, we really did not have a lot of experience in development and production of non-alcohol beer and the flavored varieties. Originally, not many people believed that non-alcohol beer could be developed into a scale business. However, I maintained the belief that non-alcohol beer could indeed become something that complements our beer-focused earnings base. Although there were numerous challenges, including building distribution and raising consumer awareness, the growth story I envisioned for non-alcohol beer was strengthened, driven by numbers. In time, we saw momentum in multiple markets. When we came to understand how non-alcohol beer is attractive to both people’s lifestyles and to our business, I eventually was able to garner a great deal of support from those working around me. From then, AEI steadily expanded its focus on non-alcohol beer, with innovation, communication, activation, and distribution priority leading to fast growth.”
The Group’s global non-alcohol beer strategy has now entered into a new phase. In 2022, to follow up on the aforementioned Peroni Libera 0.0%, we have launched the all-new Peroni Nastro Azzurro 0.0%, which will be rolled out simultaneously in over 20 countries around the world. Through this initiative, McKenzie expects to see positive results particularly in the United Kingdom, where Peroni Nastro Azzurro enjoys a status as a major brand, and in Australia, where there is a steadily growing non-alcohol beer market. “I believe the launch of Peroni Nastro Azzurro 0.0% in Australia will serve as a flagship moment for growing the non-alcohol beer market in the country.” After successfully expanding the global non-alcohol beer market, McKenzie sets his sights on helping to realize the Group’s premium strategies centered on global brands. “Sales of the Group’s global brands are still relatively small in scale compared to other global-leading brands. However, the accelerating shift toward premiumization across the globe provides a significant opportunity for the Group, as we possess some truly relevant and unique brands. Going forward, I will continue to take on the challenge of expanding our global market share through a wide range of world-class marketing initiatives.” McKenzie’s strong passion for marketing will certainly help us further grow the non-alcohol beer business in Europe and will create various synergies with the Group’s overall marketing strategy.