Dave Perkins has returned to Canada with a clear goal for Molson Coors Brewing Co.'sTAP-N Canadian operations – to build on the strength of the iconic brands that were central to the company's past success.
Mr. Perkins, who took over as chief executive officer of Molson Canada on June 5 after spending eight years in top-level marketing jobs at Molson Coors in Denver, says cementing the company's brands in the consciousness of beer drinkers is key to the company's future growth.
“You really have to build powerful brands to really break through these days, much more so than when I was here before,” he said.
Intense brand loyalty is a thing of the past, Mr. Perkins said, and consumers now respond only to a brand image that is “very, very clear.”
In addition, no beer drinker is likely to limit his or her choice to a single brand any more, so it is crucial to be in the “repertoire,” he said.
“Discounting is more pervasive today so people shift around from one brand to another … You have to be a part of the person's accepted set of brands.”
Molson Coors already has an enviable position in Canada. Its Coors Light brand is the second most popular in the country (after Budweiser from Labatt), and that brand has a well-defined image as a light, refreshing beer.
But Molson's other top brand, Molson Canadian (now No. 3 in the country), has slipped in recent years.
“Frankly it is not at the level that it needs to be,” said Mr. Perkins, who, at 55, has now spent 28 years in the Molson organization.
“It's still a great brand and a huge brand, but we need to continue to add excitement to it.”
The days of the “I am Canadian” campaign that roused many – and not just beer drinkers – into an ecstasy of patriotism, are long gone. A new – and so far top-secret – campaign is in the works, and will likely be unveiled around the time of the Vancouver Olympics.
At the same time, Molson Canada has to strengthen its premium beer brands such as Rickard's and Creemore, which have stagnated during the recession as drinkers shift to cheaper brands, said Bob Scott, principal at Toronto beer research and consulting firm Ascot Marketing Ltd.
Mr. Scott says discounting has become a big factor in the Canadian beer market, and this is “a huge challenge for mainstream beers such as Molson Canadian to remain price competitive without devaluing the brand.”
He said Mr. Perkins' central assignment is clear: “What is absolutely key is to protect and build the market share for their more profitable brands.”
While Coors Light and Molson Canadian spin off significant profits because of the sheer volume of sales, the premium products such as Rickard's and Creemore are potentially even more profitable, Mr. Scott said.
These are “relatively underdeveloped,” and face intense competition from imports and microbrewery products, he said.
Still, Mr. Perkins is an ideal person to tackle these issues, Mr. Scott said, because as a Canadian, he knows the market intimately and has also spent years in top marketing jobs in the United States. “He's got just a tremendous pedigree. You couldn't have a better choice.”
In recent years, cost cutting, plant closings, and the merger of Coors and Molson operations were at the top of the agenda in Canada while “marketing definitely took a back seat,” Mr. Scott said. “Now it has to take a front seat.”
Mr. Perkins says one way to boost beer consumption in a relatively flat market is to bring new drinkers to the fold.
Molson Coors has set up a group in Britain to look at ways to make beer more attractive to female drinkers, he said, and what is learned there could be imported into Canada.
Another area of potential growth is among immigrants. Another British innovation – a joint venture to brew the Indian beer Cobra – has made strong inroads at Indian restaurants in Britain, and the product could end up in Canada too.
At least the Canadian beer market is finally showing some signs of life. After several years of stagnation, beer sales grew by about 4 per cent in 2008, according to figures from the Brewers Association of Canada.
But almost all the expansion came from imported products, with sales of domestic brands up less than 0.5 per cent.
One puzzle that Mr. Perkins is trying to tackle is whether the recession has permanently changed attitudes toward beer purchases.
Will the desire for discounted products remain when people feel more secure? And will people continue to stay close to home, entertaining friends instead of travelling? Mr. Perkins says his hunch is that some of these shifts may remain for the long term.
“You just don't know what kind of behavioural changes will come out of it, and which you will want to reflect in how you position your brands,” he said.
To keep Molson plugged in to consumers' attitudes, the company is using every new piece of technology it can, including rapidly evolving social networks.
“The trick in this business is to be a good listener,” Mr. Perkins said.
“With digital technology you have this incredible ability to connect at the individual level, or at an affinity-group level, with beer drinkers.”
Molson has an “insider database” of more than one million individuals who it keeps in touch with, along with 20 websites, and it is experimenting with blogging, Facebook and Twitter.
“This is one of those areas where the wisdom about trying a bunch of things and seeing what works is absolutely right,” Mr. Perkins said. “That's how you learn [and] when you find something working, you ride it.”
