Just the Answer - Jose Ramon Ortiz Monasterio
In this month's Just the Answer interview, Jose Ramon Ortiz Monasterio, managing director and chairman of Eurocermex, the Grupo Modelo subsidiary which acts as exclusive distributor for Corona Extra in Europe, Middle East and Africa, talks about Corona and the premium imported beer market.
J-D: Which geographical areas does Eurocermex cover for Corona?
Ortiz Monasterio: We cover Europe, Middle East and Africa - 85 countries in total. The best growth for Corona at the moment is coming from the UK and Ireland. We are witnessing important growth in the Arab countries, which, while they are all quite small, are growing a lot. Russia is also providing strong growth, and I expect that to grow even more in the next year. Although it's not my region, China is also an expanding market for Corona.
J-D: How does the premium imported bottled beer market differ from the general beer market worldwide?
Ortiz Monasterio: We get the feeling that the main characteristic of premium, imported beer is giving that little bit extra. People are keener to accept the original proof. This makes it interesting, for example, in the UK, where Heineken is now only importing from Amsterdam. They could do it from Germany, or from wherever. The category of 'imported from origin' is becoming more important in the mind of the consumer. This gives great possibility for growth. I think also that the growing number of countries where you have increasing standards of living benefit us. The more available income you have to spend on alcohol, the more you want to invest in authentic products, even if you have to pay more.
J-D: How are you getting that message across?
Ortiz Monasterio: We are finding that consumers are deciding this for themselves. Although we do try to let them know that we are the original, the people are reacting - the consumer is the king. The more choice they have, the more they will go for the original brews, and the ones that give them a little bit more than the others, in terms of image, in terms of taste or in terms of the product in general.
J-D: Who are your main competitors in this sector?
Ortiz Monasterio: Mainly we have a few top worldwide beers: Heineken, Beck's, Budweiser in certain countries. But we also have RTDs as our main competitors. The consumer's perception of Corona is that it is half-and-half. It's not normal regular beer, but it's not a soft drink, it's seen as somewhere in between. So we have competition from both sides. This is tougher, but at the same time it's a window of opportunity for us to extend our market to non-beer consumers.
J-D: How is Corona surviving in as stagnant a market as Western Europe?
Ortiz Monasterio: In these markets, as an average, Corona is growing by 30%. So it's not a stagnant market at all. There are still opportunities for a good beer brand to sell well. We are taking market share from other products, be it beer or RTDs. I agree, Western Europe is a more saturated market but, given our positioning, we take advantage of the others who are struggling. OK, our base is not as big as the other brewers', but we are taking market share from them, so we must be doing something right.
J-D: Why do you feel that consumers are moving from traditional beers to premium beers?
Ortiz Monasterio: Possibly because they perceive premium bottled beer to be something different. It's little consumption but it's more selective. You can also see this with wine. Less and less cheap wine is being sold, with more people spending money on wines that are more expensive, even if that means drinking less wine per capita.
J-D: What regions offer the best prospects for growth for Corona?
Jose Ramon Ortiz Monasterio
Ortiz Monasterio: We still have a lot of room to fill in Western Europe, but the one area that has the biggest opportunity for growth in the short to medium term is Asia, China in particular. Almost all brewers are brewing locally there. We don't have that strategy. We're staying as the original, imported brand, highly priced and premium, and this opens up a huge opportunity for us. Another market that will grow, and which we hope to take advantage of, is India. They have a rising income level, the market will open, and we will take advantage of that, for sure.
J-D: But routes to market in countries like India are not well established?
Ortiz Monasterio: We are a niche product so we're not attacking the masses. We are attacking the high-level market. There are more millionaires in India and China than in the rest of the World, so we'll go for that market. We won't fight price-wise. If we maintain this high price policy, then that will allow us to do the kind of promotions we do. Even if it is an expensive way of promoting, we will get the beer to the people who have the income to pay for it.
J-D: What sort of marketing spend does Corona put behind its promotion of the Superbike motorcycle championship?
Ortiz Monasterio: It is by far the biggest expenditure in my region - it is my core promotion. We spend a little over US$10m a year. This amount allows us to pay for huge TV exposure without having to pay advertising costs. In the UK, for example, at least 40 minutes of Superbikes (coverage) will appear on television per weekend. And we have 13 weekends (in the championship) per season. Can you tell me how much that would cost in terms of advertising?
J-D: What plans does Corona have for the future?
Ortiz Monasterio: We want to keep on growing as much as we can. We also want to consolidate our position in the American market. With improvements in the Mexican economy and income levels, we also hope to see increased growth in Corona's home market.
In Europe, we'd like to extend our hold on our niche market to those who want to be seen with a Corona in their hand. So, we want to give pleasure to everybody.
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