“This is real innovation for the beer category,” says Francois Mahot, pointing to a clear, sleek bottle of Amstel Pulse. The general manager of UAE beer marketer Sirocco has an array of beer bottles behind his desk – for display purposes only, of course. The fact that Mahot is free to speak openly about the rising importance of beer branding in the UAE speaks volumes by itself.
Alcohol marketing is a tricky business in the Gulf, where most countries have severe restrictions on the sale and consumption of alcohol. It’s also a booming business, especially in the UAE, where each emirate has its own set of rules ranging from relaxed to completely dry.
Even relatively liberal Dubai has strict rules on consumption. Only non-Muslims with permission from their employer and an alcohol license are allowed to buy alcohol from one of two booze sellers in the UAE – Maritime & Mercantile International (MMI), a joint venture between Heineken and Emirates Group; and African & Eastern (A&E), which is controlled by Foster’s Group – or drink in Dubai’s licensed hotels, restaurants and bars. (It’s extremely rare for anyone to be asked to show their license in one of the latter outlets, but the rules are still there.)
Booze marketers are understandably keen to capitalize on rising alcohol consumption and marketing budgets. But they’re operating in uncharted waters, legally. With no written guidelines beyond a vague remit forbidding them to “openly” advertise alcohol, they are mainly restricted to pushing their products at point of sale. But they’ve also developed some tactics to promote their products more aggressively – and overtly.
Some industry professionals claim they feel freer than ever to push their brands. Says one alcohol brand manager, who asks to remain anonymous, “I wouldn’t say the line between what’s acceptable and what’s not has become blurrier. There are restrictions and we stick to them. The general feeling is that restrictions are easing up, but it’s difficult to say.”
“The market is a big grey area,” says Donna Williamson, marketing services manager at MMI. The fact is: Nobody really knows what’s allowed and what’s not.
POP CULTURE
Marketing budgets are up 15 percent from last year at Sirocco, a beer marketing venture co-owned by Heineken and an unnamed local investor. And sophisticated branding is playing an increasingly important role in the marketing of alcohol, especially beer, Mahot says. Amstel Pulse, which debuted in Dubai, Moscow and Australia last year, is a good example.
The beer is aimed not at the power drinker or even the beer aficionado, but rather a younger generation that grew up on sugary alcopops, the fastest growing category last year. Research suggests that beer drinkers are created before the age of 25, or never – an insight seemingly lost on beer marketers in the past. “Beer has been a bit too passive and lost its trendy appeal,” Mahot says. So Amstel chose an attractive, modern bottle that seems influenced by the vodka wars in Western markets during the 1990s. “Amstel,” he says, “isn’t your father’s beer.”
The fact that Amstel sees a Muslim country like the UAE as a suitable market for its “trendy” beer highlights the potential that booze marketers see in the region. Understandably, this is leading to bigger budgets.
A&E markets spirits via two or three club events per month at venues like Dubai’s Peppermint Lounge. Spirits manager Alan Sequeira says he rarely spends more than $10,000 per month stocking and branding these events. But that is likely to change. “It’s moving away from being a sellers market to a buyers market in the sense that brands are becoming more important, and customers are becoming more aware of that,” he says.
There are more international brands than ever on offer in Dubai, Sequeira adds. “Johnny Walker and Smirnoff were not very aggressively marketed until about two years ago. Now we’re trying to secure our position in this market. So yes, budgets are increasing.
“This market is in a growth phase, and I would imagine it’ll be in a growth phase for the next few years,” he continues. “There’s enough room for everyone to be profitable.”
OUTSIDE INFLUENCES
With 1,200 licensed hotels, restaurants and bars, the UAE is the biggest booze market in the Gulf, with sales rising 13.5 percent over 2006, according to Euromonitor, a London-based market research firm that surveyed the alcoholic drinks market in a number of countries. UAE expatriates (locals were not counted in these calculations) consume a total of 32.2 litres per capita per year – much higher than, for instance, annual per capita consumption of 17 liters in Tunisia and 2.5 in Egypt, but still small compared to 100 litres in the US, 138 in the UK, and a whopping 187 litres for the beer-crazed Czechs.
There is an obvious connection between rising tourism and rising alcohol consumption, says Elena Harper, the research analyst who ran the Euromonitor project. The jump in consumption over 2006 “doesn’t mean that people in the UAE are drinking more. It does mean that incoming people are contributing a lot.”
At Sirocco, Mahot says there is also a direct correlation between marketing budgets and tourism spending. Sirocco spends in the hundreds of thousands of dollars each year marketing a portfolio that includes Tiger, Budweiser and Heineken, the region’s leading beer. Given the Dubai government’s ambitious tourism goals for the next decade, it’s clear that the UAE’s alcohol market has room to grow.
Targeting tourists can be tough for marketers, though. It’s important to move fast, says Mahot. “The average stay in Dubai is three days. It’s quite difficult to build a brand in three days. How good are you at convincing a tourist to choose your product when the magic moment happens and he has $100 in his pocket and is going to spend it?”
Good research helps, says MMI’s Williamson. For example, the vodka category gets a big push in beach hotels in the Jumeirah district because they are popular with Russian tourists. “We now know which nationality is going into which hotel and we target those groups,” she says.
THE HOME FRONT
For A&E’s Sequeira, Dubai’s resident drinkers are much easier marks. “It’s easier to understand the consumer in Dubai because there are very strict lines between groups. You can take one brand and be sure that everyone at that event will interact with it.”
A&E builds consumer profiles based on cultural background and status-consciousness to segment the market. The three key Johnny Walker brands, for example, are marketed to distinct groups: Some crowds go for the premium Johnny Blue, some for Johnny Black, while others settle for Johnny Red.
“Based on psychographics, you make decisions about what brand to use,” says Sequeira. Westerners tend to care less about drinking premium brands that other groups with disposable income, for instance. “The Western self-actualizer is focused on his investments or buying a house in London. Drinking a Belvedere [a premium American vodka] on a night out doesn’t make a difference to him. If you have an event or a party with a high profile audience, Johnny Blue is not so important for them.”
So A&E focuses its premium-brand marketing budget elsewhere. “Our target consumer is mainly the Arab and Asian expat,” he says. The Asian self-actualizer, like his Western counterpart, tends to care more about homes and family, so events for him are stocked with “Johnny Black and a nice cocktail.”
But others are seen drawing a lot more status from booze: “The Arab self-actualizer – you put him on Johnny Blue.” Then there’s the Asian “experiencer” – young and rebellious – who starts with Johnny Black then develops a taste for the really expensive stuff.
In Dubai, though, it’s not just the tourists that come and go quickly. The entire population is transient, creating its own set of problems – especially when it comes to direct marketing.
A change of address can mean trouble, says Williamson, who was brought on board to streamline MMI’s direct marketing operation. The company’s database contains about 20,000 names. “We make sure there aren’t any repeats in the database or a wrong PO-box number. We make sure that the license is still valid. We have to make sure that [the license holders] get it and no one else does.”
Mahot expresses the same concern. It’s not simply a matter of wasting money with imprecise targeting. When doing an “SMS blast,” for example, you have to make sure the database contains only non-Muslims, he says.
THE CAMERA NEVER LIES?
The Gulf’s booze marketers must constantly remind themselves that they’re operating in a Muslim country, even if they’re not interested in targeting Muslim consumers. While it may not be against any written law to expose Muslims to alcohol promotions, it’s certainly not a good idea. It makes media providers extremely jumpy, for example.
It took just a single complaint for publisher ITP to pull copies of Time Out Dubai that had been packaged with MMI’s brochure describing the alcohol licensing application procedure. It included an application form. “We thought we’d get away with it. It was a legal document and we thought that would be fine,” says Williamson. The promo was pulled after a few days on newsstands following the complaint.
“It is not Time Out policy to promote alcohol or its consumption,” says Alexander McNabb, an ITP spokesman and group account director of Spot On PR. A quick look at Time Out’s Eating Out bar and restaurant guide, with its glossy pictures of stocked bars and fancy cocktails, may suggest otherwise, but McNabb says readers shouldn’t assume they’re looking at pictures of drinks that contain alcohol.
“Is that picture actually a drink? It might as well be a Virgin Mary as a Bloody Mary. A beer can is obviously beer, but a big pint of [non-alcoholic malt beverage] Barbican is perfectly acceptable to everyone,” McNabb says. (It’s not clear whether McNabb has tested this theory on British package tourists.)
PLAYING INNOCENT
The most important message for booze marketers, given the murky legal situation, seems to be: Cover your ass. They often employ an “alibi logo,” an instantly identifiable brand symbol for consumers who already know what the brand stands for, but one that has no mention of alcohol of any kind. The alibi logo forges a connection between the product and the consumer without flouting the myriad unwritten rules that define the trip to market.
“If its Budweiser, it’s Bud. If it’s Tiger Beer, it’s Tiger,” says Lina Vasiloudis, a brand manager at Sirocco. If the marketing takes place within a licensed establishment, the full name can be used, she says. “Everywhere else, you really shouldn’t be advertising the name at all. You have to use the alibi logo.”
Using recognizable brand properties to avoid mentioning alcohol is a long-standing tactic in the UAE. Back in 2003, an MMI press release promoting a concert described the show as “the latest in the ‘Keep it real’ series of events sponsored by the ‘green can’ beverage company.” That ‘green can’ would be Heineken.
Event sponsorship, understandably, remains a popular strategy. It’s unlikely, after all, that anyone attending a licensed event is going to be outraged by the sight of beer banners. But even when an event has all the necessary approvals from Dubai’s Criminal Investigation Division, sponsors must still be cautious, says Mahot.
“We always take care with CID that there is no issue with visibility from the outside,” he says. “It may seem like a small detail, but if the door is left wide open and somebody who doesn’t want to be exposed to alcohol is passing by on the street – someone who doesn’t want to be exposed to the branding at all – that could be an offense.”
So the rules might be loosening, and improved consumer profiling and brand development will certainly see promotions having more impact, but don’t expect Johnny Walker billboards to pop up in the Gulf anytime soon. Eager as booze marketers are to push their brands in the UAE, as long as the grey area remains, they’ll still be winging it.
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