But there were also more substantial changes. "One of the things we noticed, in looking at the market a couple of years ago, was that there was only one imported light beer, Amstel," says Kucich. "That looked like a substantial opportunity. Imported beers were growing at 12% a year, far faster than domestic brews, and light beers were growing faster than imports -- about 20% annually. We thought importing a light beer would make sense. In 1985 we called up Derek Oland [president and CEO of Moosehead Breweries Ltd., in Saint John, New Brunswick] and tried to convince him to introduce Moosehead Light.'
It took a lot of convincing.
First, introducing a new brand in the States is expensive -- $15 million to $20 million in the first year alone, even with very little TV advertising. And that would be money coming straight out of Oland's pocket, not Kucich's.
Second was the high cost of gearing up. A new brand would mean expanding capacity, capacity that would lie idle if Kucich turned out to be wrong. And finally, there was the very real question of risk versus reward. The United States already accounted for 40% of Moosehead's sales, and how much more volume would a light beer add? Besides, how dependent on the United States did Oland want his company to be?
Still, Oland was finally persuaded. "This is a partnership, and their objectives are the same as ours," says Oland. "We brew the product, but we have to rely on them when it comes to marketing decisions." Moosehead Light was introduced last October, and while neither Oland or Kucich is willing to disclose figures, both use exactly the same words in discussing the light beer's progress: it is doing very, very well.
And that kind of relationship is just what it takes to make importing work at its best. The person doing the importing has to convince his source that he understands the market, can work with the advertising agency, and knows which distributors are really going to give the product the push it needs.
"This is something All Brand is very good at," says Anita Rosepka, senior editor of Beverage Media, which bills itself as the oldest and most widely read magazine in the liquor industry. "They know how to pick premium brands and tie them to the country of origin. By signing Paul Hogan, [star of the Crocodile Dundee films and the "say g'day" pitchman for the Australian Tourist Commission] they were perfectly positioned to take advantage of the Australian craze.'
Of course, the importer also has to select the right product to begin with. Unless the brewer is offering a good beer, one that would be easy to introduce and promote to the American market, All Brand won't handle it.
All Brand is owned by two British concerns, Grand Metropolitan PLC, which holds 51% of the stock, and Whitbread & Co. But even though they have more than a score of beers between them -- including Watney's and Stella Artois, the leading Belgian beer -- All Brand handles only two: Whitbread Ale and Mackeson Stout. "The other brands just don't measure up to our import criteria," says one All Brand executive, who not surprisingly pleaded for anonymity.
That its owners allow All Brand to snub them tells you an awful lot about what they think of its marketing strategy. It also suggests there might just be something to importing someone else's mousetrap instead of struggling to see if you can build your own.
ALL BRANDS' RULES
What to look for when you look to import
All Brand has reduced its business strategy to a series of marketing rules. In the following list, if you substitute whatever you're thinking of importing for the word "beer," you'll have a pretty good set of guidelines for importing anything.
* The country of origin must be known for brewing beer. The thought here is simple. Consumers already have a mind-set about certain countries. France is known for wine, women, and cheese; Iceland for long summer nights and for hosting chess matches. If consumers already have an image of the country of origin, you are going to have a hard time convincing them otherwise. Instead of fighting their prejudices, just take advantage of them.
* The beer must be a leader in its country of origin. This is market research at its most basic. If the people who know beer -- the home market -- like the brew you are thinking of importing, you have a decent shot of scoring with it in the United States.
* The beer must be produced by an export-minded brewer. It's all well and good that you have spotted what you are sure will be the next great imported beer craze. (Mexico's Corona is currently the beer to drink.) But the sad fact is that if the brewer isn't truly interested in exporting, you're going to have a problem. After all, the brewer is the person paying for your marketing effort.
* The beer should be able eventually to gain 1% of the total market. On the surface, this borders on the silly. The total imported beer market is just 6% of all beer sales. "But our competition is not just imported beers, it is all beers," says All Brand marketing vice-president J. Timothy Nolan.
We never met a marketer who thought small.
THE TOP 10 IMPORTS
Ranking % of import market
1 Heineken 22.4
2 Corona 18.7
3 Molson 10.8
4 Beck's 8.1
5 Moosehead 4.8
6 Labatt's 4.7
7 Amstel Light 2.7
8 Dos Equis 2.7
9 Tecate 2.7
10 Foster's 2.5
Source: Beverage Media n
