March 31, 2015

Corporate cultures are interesting. When my airline (Western) merged with Delta in the 80s, I noticed a very distinct culture clash. Seldom did the boys from the South agree with the guys from the West. Today, I am seeing this same challenge play out in the beer industry.

Seven years ago two major brewing companies, Miller and Molson Coors, joined as partners to take on #1 Anheuser-Busch InBev, which then had about 49% of the market (they now have 45%.). By combining freight logistics, marketing, production and procurement the Wall St. Journal reports that they saved $1 billion in costs, driving profit increases for six years straight. Now, it is not working as well. Why?

First, the dynamic growth of craft beers (they have more than doubled their market share since 2008 from 4.2% to 9%)  is making the lack-luster taste of American beer, especially light beers, less appealing to serious beer drinkers (80% of beer is consumed by 20% of the market). Also, Mexican beers have gained a 15% share of the $14 billion import market, according to Beer Marketer’s Insights.

But perhaps the biggest challenge is that Miller executives, they are called “the suits” and Molson Coors executives from Colorado, they are called “the cowboys,” just can’t seem to agree on much of anything. Right now, they can’t even agree on a CEO. It doesn’t help that they have competing beer products. If Miller Light sales go up, Coors Light sales go down. Plus, Miller and Molson Coors have no Mexican beers.

What does all this beer talk have to do with your marketing? It is a prime example that in a changing market, everyone has to be on the same page. Your marketing strategies must have universal agreement within the organizations, not just within your marketing team. Is everyone on your team rowing the boat in the same direction? Good question to ask as you look at the results of the first quarter.

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