E-Malt.com News article: Mexico & United States: Femsa makes Most Interesting Man in the World responsible for its beer sales

Fomento Economico Mexicano SAB, Latin America’s largest beverage maker, is counting on a tuxedoed gentleman with expertise in martial arts and jai alai to thrive in a slumping U.S. beer market, Bloomberg communicated on July, 7.

The fictitious “Most Interesting Man in the World” who endorses the brewer’s Dos Equis brand in U.S. TV spots has boosted exports so much that the company, known as Femsa, accelerated plans to expand the ad campaign this year, Luis Duran, vice president of international markets for the beer division, said.

Femsa plans to use advertising to win market share from Mexican rival Grupo Modelo SAB, maker of Corona Extra, even as a recession has drinkers cutting back. While overall U.S. beer imports fell 3.4 percent last year, Femsa said its export sales volume rose 9.2 percent. The U.S. represents about 90 percent of its exports, according to Carlos Velazquez, a company spokesman.

“There is growth, at least when it comes to our brand,” Mr. Duran said. “If it were not a recessionary period, we would be doing much better.”

Total U.S. beer shipments fell 1.6 percent this year through May, compared with a 0.6 percent gain in all of 2008, according to the Washington-based Beer Institute, an industry group.

In the Dos Equis spots by Euro RSCG Worldwide SA, Jonathan Goldsmith plays a bearded, tanned, graying James Bond-like character, suave and adventurous. He arm-wrestles, frees a bear from a trap and steers a boat while surrounded by beauty-pageant contestants.

“He once had an awkward moment, just to see how it feels,” a narrator intones. “He lives vicariously through himself.”

Euro RSCG, based in New York, designed the campaign to “spark chatter and pique curiosity, and, most importantly, look beyond the conventional Mexican imagery of beaches, burritos and burros,” according to the agency’s Web site.

Modelo, based in Mexico City, still leads Femsa in U.S. sales volume, with its top brand, Corona Extra, selling 2.95 million cases in the four weeks ended June 14, compared with 264,172 cases of Dos Equis Lager, according to Chicago-based Information Resources Inc., which measures sales in supermarkets, drugstores and other retailers, excluding Wal-Mart Stores Inc.

While Corona sales dropped 12 percent from the same period a year earlier, Dos Equis Lager climbed 26 percent, according to IRI. Dos Equis Ambar rose 7 percent to 68,298 cases.

“It’s still small, but the encouraging thing is even in this type of environment they’re actually able to grow this portfolio,” said Lauren Torres, an analyst with HSBC Securities Inc. in New York. She has an “overweight” rating on Femsa shares, meaning she expects them to gain in value.

Sales of Dos Equis, Tecate and Femsa’s other U.S. brands gained 9 percent by volume from a year earlier in the two weeks before May 30, the period around the U.S. Memorial Day holiday, while Modelo’s sales fell, Duran said, citing Nielsen Co. statistics.

Duran declined to provide growth data for the second quarter, citing company policy.

Selling expenses in Femsa’s beer unit gained 12 percent last year to 13.4 billion pesos ($1.01 billion) as the company expanded its marketing activities, according to its annual report. Duran said Femsa won’t back off on a chance to gain more share in the U.S.

This year, the company began buying national airtime for the “Interesting Man” campaign, which had been airing in selected U.S. markets and is now in its third year. Femsa has also introduced the ads in Canada and is getting exposure online in English-speaking countries such as Australia, Duran said.

“It’s a very powerful effort, and also very expensive,” he said. “We’re investing aggressively when a lot of people are not, thank God.”


10 July, 2009