In this article, we review the Alcohol Beverage Market: USA. Understand briefly, how a new entrant can establish its brand and increase its marketing value. Mention how outsourcing sales and marketing can boost their reach and reduce expenses.
The alcoholic beverages market in the USA is highly competitive and constantly evolving. It consists of various segments, including beer, wine, spirits, and craft beverages. Key factors driving the market growth include changing consumer preferences, increasing disposable income, and a growing culture of socializing and celebrations. However, new entrants face significant challenges in establishing their brand and increasing their marketing value.
Establishing Brand and Increasing Marketing Value:
1. Differentiation and Unique Selling Proposition (USP): A new entrant needs to identify a unique selling proposition that sets it apart from competitors. This could be a unique flavour profile, production process, or brand story that resonates with consumers. By highlighting this USP, the new entrant can create a distinct brand image.
Example:
a. Tito's Handmade Vodka positioned itself as an independent, craft vodka brand in a market dominated by large-scale, mass-produced vodkas. Its USP lies in its handmade production process using old-fashioned pot stills and its commitment to using only high-quality, locally sourced ingredients. Tito's Handmade Vodka effectively communicated its unique story, emphasizing its "handmade" nature and its dedication to creating a premium product. This differentiation helped Tito's gain a loyal following and become one of the fastest-growing vodka brands in the United States.
b. Blue Moon differentiated itself in the beer market by introducing a Belgian-style wheat beer at a time when such beers were relatively unknown in the United States. The brand positioned itself as a craft beer, highlighting its distinctive flavour profile, and the use of Valencia orange peel, and coriander in the brewing process. This unique combination of ingredients, along with its cloudy appearance, set Blue Moon apart from traditional American lagers. By tapping into the growing interest in craft beers, Blue Moon successfully established itself as a unique and refreshing choice for beer enthusiasts.
2. Product Quality and Innovation: Emphasizing product quality and continuous innovation is crucial in the alcoholic beverages market. Investing in research and development to create unique flavours, blends, or brewing/distillation techniques can attract consumers and generate positive word-of-mouth.
Examples:
a. Dogfish Head Brewery, based in Delaware, is known for its relentless pursuit of innovative and high-quality beers. The brand has gained recognition for introducing unconventional ingredients and brewing methods. Dogfish Head's flagship beer, the 60 Minute IPA, is continuously hopped over a 60-minute boil, resulting in a bold and hop-forward flavour. They have also experimented with ingredients like fruits, spices, and even culinary elements like oysters and maple syrup in their brews. This commitment to innovation has allowed Dogfish Head to stand out in a crowded craft beer market.
b. Patrón Tequila is known for its commitment to product quality and innovation. The brand introduced the concept of ultra-premium tequila to the market by focusing on handcrafted production methods and using high-quality ingredients. Patrón implemented innovative techniques such as hand-harvesting agave, slow-roasting it in traditional brick ovens, and using a tahona stone wheel to crush the agave. These processes result in a smooth and distinct flavour profile that sets Patrón apart from other tequila brands.
3. Targeted Marketing and Branding: Identifying and understanding the target market is essential. New entrants should conduct market research to identify their ideal consumer demographics, psychographics, and preferences. Based on this information, they can create targeted marketing campaigns and develop a compelling brand identity that resonates with their target audience.
Examples:
a. Stella Artois, a Belgian beer brand, has successfully targeted upscale consumers by positioning itself as a premium, sophisticated choice. Their marketing campaigns focus on the brand's rich heritage, quality craftsmanship, and elegant presentation. Stella Artois emphasizes its unique glassware and the "Pouring Ritual" to create a sense of exclusivity and elevate the drinking experience. By targeting consumers who appreciate a refined and stylish brand image, Stella Artois has established itself as a premium beer choice.
b. Baileys is a well-known liqueur brand that targets a predominantly female audience. The brand has successfully positioned itself as a versatile and indulgent drink choice. Baileys' marketing campaigns often feature images of women socializing, enjoying a luxurious lifestyle, and savouring moments of relaxation. They promote the drink as a treat, encouraging consumers to indulge in the creamy and smooth flavour. Baileys' targeted marketing efforts have helped them build a strong presence among their desired demographic.
Outsourcing Sales and Marketing:
Outsourcing sales and marketing can be a strategic move for a new entrant in the alcoholic beverages market. Here's how it can boost reach and reduce expenses:
1. Expertise and Networks: Outsourcing sales and marketing to specialized agencies provide access to professionals with expertise in the industry. These agencies have established networks with distributors, retailers, and influencers, which can help the new entrant gain faster market access and expand its reach. For example, distilleries like Clear Creek Distillery, Don Michael’s Distillery, and Michter’s Distillery outsourced their services to agencies, such as Tipping Glass, to grow their brand presence and increase and boost sales.
2. Cost Efficiency: Outsourcing also allows the new entrant to avoid the upfront costs associated with building an in-house sales and marketing team. It eliminates expenses related to recruitment, training, salaries, benefits, and infrastructure. Instead, the new entrant can allocate their resources towards product development and other core business activities.
How can the new entrants focus on creating uncontested market space, rather than competing in existing markets? Here's how a new entrant can apply this strategy:
1. Value Innovation: Identify unexplored opportunities in the alcoholic beverages market by offering unique value propositions. This could involve introducing a new category or creating a combination of attributes that haven't been explored before, such as low-calorie craft beer or organic flavoured spirits, or a create a whole new category of spirit.
2. Non-Customer Analysis: Analyze the non-customers of the alcoholic beverages market to understand their reasons for not consuming alcoholic beverages. By addressing their concerns or providing alternative options, the new entrant can tap into a new customer base and expand the market size.
3. Strategic Pricing: Rather than competing solely on price, focus on creating value that justifies premium pricing. This can be achieved through innovative packaging, branding, sustainability initiatives, or personalized experiences that differentiate the brand from existing players.
4. Partnerships and Collaborations: Seek strategic partnerships with complementary businesses, such as local breweries or wineries, to create synergies and leverage their existing customer base. Collaborations can also provide opportunities for co-marketing efforts and cross-promotion.
Remember, the success of a new entrant in the alcoholic beverages market requires a combination of a comprehensive understanding of consumer preferences, effective marketing strategies, and continuous innovation to stay competitive in this dynamic industry.
In summary, a new entrant in the US alcoholic beverages market can establish its brand and increase marketing value by focusing on differentiation, product quality, and innovation. Outsourcing sales and marketing functions can provide access to expertise and networks while reducing expenses. Embracing a blue ocean strategy enables the brand to explore untapped markets and create uncontested market space. With a comprehensive approach and strategic decisions, new entrants can successfully navigate the competitive landscape and carve out their own path to success.