It's been a very busy week so I've only just been catching up on some reading of beer news from around the world, and a couple of things struck me as a I read a couple in succession. First I read this...
Leaving aside that fact that this 600 word self-congratulatory article about their marketing genius barely even mentions that the product is beer (the only words that indicate that this could be an advertising campaign about beer are the words ''clean, crisp taste''. The rest could be about anything. It is just a fast-moving consumer good after all.) But the point is to note that Lion "increased its spending into television, print and radio advertising to ensure its target audience of young metropolitan men are aware of the extra content such as websites, video diaries and the like that builds up the ''back story'' essential to give a brand credibility." Note too that they credited their six advertising and media partners.
Then read this story in marketing magazine B&T about Fosters whittling down a list of 117 agencies and selecting its stable of 21 marketing, advertising and PR partners (all good people, I assure you, many are avid readers this blog for some reason...morning all - congratulations on being selected!)
These show the cost of advertising in the world of commodity beer. Recently, the SMH noted that in the 12 months to November 2008, Fosters' VB brand spent $5.3 million in advertising, up from $3 million in the same period in 2007. A recent article in the Financial Review, which has no weblink, said Lion Nathan's CEO Rob Murray increased the company's marketing spend by 30 per cent when he took the top job in 2006 to bring it to "between 8 to 10 percent of annual net revenue". That's revenue, not costs, this must make marketing the single most expensive ingredient of beer.
And then I saw this about Lion in NZ putting prices up, citing the cost of glass and aluminium.
It always seems that when beer prices go up, it's the cost of ingredients that get's the blame (though as I've noted, it's never the cost of sugar which makes up more than a quarter of some of these beers - even when the price of sugar doubles), never the cost of the expanding teams of marketers or the advertising.
I wonder why that is.