Asahi’s CMO on the value of doing the ‘mundane but important’ work to drive growth

The Asahi business is looking to go back to basics, including innovation and consistently activating its brands, to drive growth this year.

The company, which owns the likes of Grolsch and Peroni, as well as Asahi, is, like every other business, hungrily pursuing growth.

Speaking to Marketing Week, Asahi CMO Grant McKenzie says that 2023 was something of an “abnormal” year for the business.

“Last year, we had to increase our prices because our cost inflation was enormous, and that had an impact on volume,” he says. “You cannot increase 15% or 20% on price and expect nothing to happen with volumes.

These price increases were necessary to protect the business amid high inflation, with McKenzie suggesting it put the strength of its brands to the test. “The stronger your brand, the better your ability to take price,” he adds.

It’s almost back to normal in a sense.

Grant McKenzie, Asahi

“In the markets where we had leading brands, we were able to take price and hold or grow market share and do well. In a couple of markets, some brands suffered because they’re not strong.”

The last few years have served as a testament to the importance of investing in brand building to allow its key players to absorb price increases when necessary.

While pricing has been at the forefront of many businesses’ minds for the past few years, 2024 is more about returning to the “traditional levers” of marketing, he says.

“It’s almost back to normal in a sense,” says McKenzie, adding that the levers that have always driven performance for Asahi are those that will again drive performance this year.

Those include activating its brands in the right way, making them “present” and utilising distinctive assets. McKenzie calls this “mundane but important” work.

How can brands drive growth in 2024?

He highlights Asahi’s innovation work as a particularly important aspect of its growth plans for this year and beyond. One of its focuses for innovation is moving into lighter, easier-to-drink beers in many regions.

“The beer market overall isn’t growing in mature markets at all, but that part [lighter options] of the beer market is,” he says.

This means using innovation to explore the opportunity of lighter alternatives is becoming increasingly important. For example, the company has recently launched a low-carb, mid-strength version of Asahi Super Dry in Asia.

It is also continuing to invest in and expand Peroni’s Stile Capri product, which is a lighter version of the beer, and its efforts on expanding its non-alcoholic offering.

‘Commercially important’ non-alcoholic portfolio

While the overall beer market is seeing fairly stagnant growth in mature markets, non-alcoholic beer is growing rapidly.

Asahi has launched non-alcoholic versions of both Peroni and Asahi. It is also investing in marketing behind these products. Peroni Nastro Azzurro 0.0% was recently revealed as sponsor of Ferrari’s Formula 1 team, for example.

“It’s commercially extremely attractive for us to market 0.0 beer because that’s where the growth is,” McKenzie says.

The category is seeing “strong double-digit growth” in the category, he adds, with Peroni 0.0 volumes “virtually doubling” in 2023. McKenzie forecasts “another year of record growth” for the brand in 2024.

AB InBev CMO: Olympics partnership will ‘strengthen’ beer as a category

Although the non-alcoholic beer category is significantly bigger in the UK than it was just a few years ago, McKenzie says that, compared to other European markets, it still has a lot of room to grow in Britain.

He says the category presents a big opportunity as it is relevant to those who don’t drink alcohol as well as creating new occasions for existing drinkers.

“In Central Europe or Germany at lunchtime, a lot of adults would drink a non-alcoholic beer with their sandwich or their lunch,” he states. “That’s what we call a switching opportunity.”

The category can also tap into what the company terms “zebra striping”, where consumers may alternate alcoholic and non-alcoholic drinks in a bid to moderate.

“This is our fastest growing category and has been for a decade in the UK,” McKenzie says, stating that he expects it to continue to “rapidly expand” going forward.

Efficiency versus effectiveness

This year will see Asahi deploy its full range of marketing levers to drive growth, but it will also remain laser-focused on both the effectiveness and efficiency of its work, McKenzie says.

He does not believe there needs to be a trade-off between effectiveness and efficiency, instead, the two have distinct roles to play.

“Our marketing budgets are not going to double every year, we’re in an environment where there’s cost pressure as a business,” he says. “We can’t pass on 20% price increases to consumers.”

That’s where efficiency comes in, he says, saving money where the business can.

Ultimately, what drives the top line is the effectiveness.

Grant McKenzie, Asahi

That could involve in-housing, choosing to film an advert using virtual production techniques rather than on location, or moving away from the notion of copy “wearing out”.

“All of these any good marketing function must be doing every year; however, ultimately, what drives the top line is the effectiveness,” McKenzie says.

Marketing effectiveness ultimately means making your brands more appealing, he says, and is determined by the quality of the work.

While the success of efficiency can be determined by numbers, i.e. how much an organisation has saved, effectiveness is “arguably more complex”, he says.

On effectiveness, a major focus for Asahi has been sharing best practice across its markets, enabling that knowledge on how to make its brands more appealing to be conveyed across the organisation.

Efficiency and effectiveness of marketing spend are both vital for any brand, McKenzie says, but attempts to drive efficiency shouldn’t undermine effectiveness.

He gives the example of Peroni’s recent sponsorship of Ferrari. This is by no means the cheapest activation, but he is confident it will deliver the most value “pound for pound”.

A search for marketing efficiency cannot “dilute” the drive for effectiveness, he says.