How Heineken Discovered Its Niche In An Overcrowded Market

Want to know the reasoning behind Heineken's "Legends" campaign? HEINEKEN USA's CEO Dolf van den Brink is here to clue us in.

What’s happening in the beer market today? To answer this, you have to look beyond beer to what people are buying and how they make their buying decisions today in the market at large. You’ll discover there are two major forces at work, and they are pulling in opposite directions.

One of the forces is the acceleration of innovation in all categories. Consumers are demanding new choices in every part of their lives. And suppliers, who know that innovation creates value, are doubling down. Beer in particular is now one of the most innovative segments in all of consumer goods. And much of that innovation is actually happening right here in the U.S., which is why we at Heineken like to call the U.S. the Silicon Valley of Beer.

The other very significant force is that we live in what some have called an "Age of Skepticism." Brand overexposure has turned consumers into skeptics. They use technology, including social media, to inform themselves and decide what’s really important to them.

So how do we deal with this reality?

By finding out what really resonates with consumers. In this environment, successful brands have been able to stay relevant by building meaningful relationships with their customers. They’ve focused especially on two questions: Who are our consumers and what do they want?

Heineken interviewed nearly 9,000 consumers to explore the factors that drive their alcoholic beverage purchases, yielding two intriguing, market-wide megatrends.

There are two distinct sets of behaviors and attitudes that align with two very different types of consumers. One type of consumer is quieter, more internal, and yearns to "live thoughtfully." The second is louder, more adventurous, and socially active. They’re determined to "live legendary."

The live thoughtfully set wants to slow down and enjoy a more mindful experience in our hyperactive world. They crave an opportunity to turn off, tune out, and cherish private moments. They favor Whole Foods, Starbucks, and Kettle Chips, and they seek out brands that emphasize trust, honesty, and transparency.

Now what about those who aspire to live legendary? These are the folks who are up for anything that pushes their limits. They’re not preoccupied with what’s fancy or what’s unaffordable. They’re after the experience.

They want to dance at Coachella until dawn. They want to ski down a remote back bowl in Colorado with a GoPro slapped on their helmets. They want to come out of a Tough Mudder obstacle course covered in mud and wearing a smile, then reach for a Dos Equis. For the live-legendary consumer, it’s not about what you buy but rather what you do.

Aligning consumers with the brand

Looking deeper into the data, Heineken’s researchers identified a number of needs a consumer has when he or she is buying an alcoholic beverage, with these consumers falling into two distinct categories: "savor" and "amplify."

The first group wants to savor, say, a small-batch craft beer, a specific vintage of wine, an aged whiskey, and so on. The second wants to amplify every experience—they want to meet new people and embrace new possibilities. They love events, celebrations, and nightlife. And they enjoy cocktails, vodkas, and import beers.

Notice how these two segments, "savor" and "amplify," correlate directly with "live thoughtfully" and "live legendary"? Both trends are relevant, but it’s the latter that perfectly fits with Heineken USA’s portfolio.

The "live legendary/amplify" segment has been explored by energy drinks and spirits, but Heineken USA is squarely focused on this space in beer. For example, our ad campaigns celebrate what makes the everyman legendary, we’re engaging consumers to create their own film shorts, and we’re offering consumers a chance to win the $25,000 Stay Thirsty Grant, which sends one lucky fan on a global adventure.

In everything we do we strive to carry out the "live legendary" ethos: "We believe that life is more rewarding if you go beyond who and what you are."

Who said that? A marketing executive? One of our researchers? No, it was Freddy Heineken, member of the founding family and long-term CEO of the company during the second half of the 20th century. It’s been part of Heineken’s ethos since the beginning!

Dolf van den Brink is the President and CEO of Heineken USA. Dolf joined Heineken USA in October 2009, and in 2012 was named one of Fortune’s "40 Under 40" for his efforts in turning around the business and dramatically changing the culture. To learn more about Heineken USA's activations, point of view, and leadership, visit http://heinekenusa.com/news-room/blog/.

[Image: Flickr user Incase]

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