Some colleagues recently asked me about the role of “provenance” in the beer category. My personal experience, based on working with breweries on both sides of the Atlantic, suggests that a beer’s provenance (i.e., where it comes from) is an important factor when people choose one beer over another. After all, once you move beyond the type of beer—lager, pilsner, ale or stout—most people can’t tell the difference between individual brands in a blind taste test. Provenance, then, makes an easy way to differentiate among brews. But provenance could mean the beer comes from down the road, not across the sea.
Until not so long ago, beer was a very local product indeed. Almost every large town in Europe and the United States once had its own brewery. Barriers to entry were low, beer didn’t travel well, and anyone with reasonable experience and good ingredients could make a decent pint. Brews became identified with where they came from and associated with the local community.
Thinking about these issues reminded me of a conversation I had at the end of last year with the marketing director of Efes, the leading brand of beer in Turkey.
The Efes Beer operation has a unique history. Beer production in Turkey did not begin until 1890, when a brewery was founded in Istanbul by two Swiss entrepreneurs. This brewery was later nationalized, and for a time, Tekel, a state enterprise, was the only beer producer in Turkey. In 1969 a change in the regulations opened the market to private enterprise. The Efes company established its first two breweries in the cities of Istanbul and Izmir in 1969, the same year that local competitor Tuborg also started producing beer in Izmir.
Today Efes controls around 80 percent of the Turkish beer market, while Tuborg’s share is around 15 percent. Other foreign brands, so successful in other countries, have made little progress in Turkey. I asked Dilek Dolek Basarir, the marketing director of Efes’ Turkey Beer Operations, what lay behind this spectacular achievement. The following are some excerpts from my conversation with her:
Q. One of the most notable things about Efes is the degree to which the company is involved in the local Turkish community. How did this come about?
A. For many years the Efes’ mission statement has been to help improve the quality of life for Turkish society. Our main strategy in the Turkish beer market has been to grow the market by satisfying consumer preferences. While many brands consider sponsorship to be an alternative to TV advertising, Efes has sponsored local culture from the start.
Q. So the company has used TV advertising in the past?
A. Yes, the brand was established using a highly successful TV campaign. The series of comical ads is still remembered by many today. Beer advertising was banned in Turkey in 1984 but even people born after that date will be familiar with the tagline, “The beer is under this cap.”
Q. But today sponsorship seems to be the name of the game?
A. In 1976 sports sponsorship took a more prominent role for the brand when Efes bought a local basketball team and renamed it as Efes Pilsen. The team rapidly became successful and established an emotional connection with a wide audience. Today it is a team that attracts support whatever town people come from, and Efes now sponsors not just sports but the Turkish movie industry, theater and even archeology.
Q. And what about the Turkish Tourism Project? It sounds an unusual program for a beer company.
A. The project arose out of research we conducted to understand what were the big problems facing Turkish society today. The top two were education and unemployment. Efes now funds almost 70 percent of the Anatolia Education and Social Assistance Foundation, our parent company’s foundation dedicated to building schools, giving scholarships and hospitals.
We have identified that tourism has big potential to create jobs in Turkey because our people do not necessarily understand what tourists want and how to meet their expectations. So Efes is working with the United Nations Development Program on The Tourism Project. We aim to preserve a large area in Eastern Anatolia and develop it for alternative tourism. We are teaching local people how to act as guides, run pensions out of their homes, and grow organic vegetables. We have partnered with the Bosphorus University to create a one-month tourism certificate program. The courses have proved so successful we are expanding from five cities in 2007 to six in 2008.
Q. In many countries, foreign imports have much larger shares than here in Turkey. Why is that?
A. The market is composed mainly of returnable packages which makes a cost-wise entry barrier for importers. Also, in contrast to Russia, where any outside brand is seen as worthy, the competition is much tougher in Turkey because of Efes Pilsen’s well-established quality and its appeal to a broad cross-section of people. People who could afford to buy a foreign import justify their loyalty by asking “Why pay more for the same quality? And besides, it is from my country.”
Q. I understand Heineken withdrew from Turkey in 2006. Have any foreign imports been successful?
A. We brew and distribute Miller Genuine Draft, Fosters and Beck’s under license, but the only one that has achieved significant volume is Miller Genuine Draft. Its packaging is distinctive with its clear bottle, and its American heritage serves to make it more appealing to Turks. Without the presence of Tuborg, we would not have any significant competition here and I think that would cause some problems. We cannot grow the market without having a brand to compete against. The competition keeps the category alive and interesting.
Q. Does Efes plan to make its brands global?
Efes Beer Group’s vision is to become one of the worldwide leading beer systems with core strengths in Eurasia. So we have global aspirations, but today I think we are international. We have extended our production into Russia, Kazakhstan and Eastern Europe with some success. Although Turkey does not have a reputation as a beer country and Efes cannot trade on its provenance abroad, it is still available in more than 50 countries worldwide. We were the first import brand in Russia and Kazakhstan, and the brand’s Gold Medal quality helps it to sell as a premium beer, but obviously with lower volume sales as a result. To capture the mass market, we have launched local brands like Stary Melnik in Russia. Turkey has a good image in Russia so Turkish ownership is not a problem.
Efes provides us with a compelling example of a domestic brand that has become successful and beaten off multi-national competition by becoming an integral part of its home culture. The use of sponsorship from the early days of the company has helped ensure that people know and love the brand.
The only question is how successful Efes Pilsen will be on the international stage. Can the brand successfully extend itself to new countries where provenance may be a more important driver of brand choice? What recommendations would you make to help the brand succeed in the rest of the world?
(36 votes, average: 2.44 out of 5)
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February 6th, 2008 at 11:11 pm
As a member of the Campaign for Real Ale (CAMRA) and seasoned home-brewer, this one is close to my heart. I would say the brand can extend itself to other countries but only through cutting its profit margins. This is already the case in the UK where Efes Pilsen is sold in JD Wetherspoons but at a budget price.
I feel a terrible seething resentment everytime I see a fellow Brit choose a pint of Fosters or Budweiser over a home-produced ale (this has ruined evenings). Almost invariably the global fizz is more expensive than local stuff yet the quality is inavariably lower. Provenance isn’t everything but its right up there as a reason when an incorrect beer choice is made.
So for a brand like Efes Pilsen - unless Tukey becomes cool over the world - it will be very difficult to play any other game than price-cutting to appeal to a get-drunk crowd. It’s really at the whim of global trends.
CAMRA by the way represents a great product but terrible marketing.
February 7th, 2008 at 11:16 pm
As Chris says, price cutting will be an imporatnt step, specially in evolved markets. But still there are large enough markets which do not know Turkey reallly well, be it about its history and tradition(cusines) or the Formula 1 track in Istanbul. This is something that could be used by the brand in conjuction with Tourism partnership to promote the brands in develping and emerging markets of Asia. But where provenance becomes a much stronger factor, it might be important for the brand to push the Countrt first…. vietnam not being the cool place still sells the Laos beer well.
February 9th, 2008 at 11:03 am
From my conversations with several local pub owners (Istanbul and Ankara), some of which from reputable chains, Efes has bared competitors entry in the quasi totality of its market by threatening to withdraw its flagship product from those pubs/bars/restaurants that would “dare” distributing other brands.
Efes, part of the Anadolu Group (Anatolian Group), is well known for “sponsoring” businesses in usually offering to pay for interior decoration, providing beer taps so long as no other major brands be pushed to the customer. You can indeed find competing brands such as Corona and Miller, but true competition on-tap is either trivial or non-existent.
Picturing the Efes success solely on its care of its community is a rather poor PR move.
February 9th, 2008 at 1:26 pm
Thanks for the comments everyone.
Stanley, I just have to say that this post was not intended to gloss over other reasons for Efes dominant share of the Turkish market, rather I was intrigued by the extensive nature of the brand’s sponsorship. Based on my experience in the UK and US I am not sure the tactics you describe would be regarded as unusual but Efes current dominance would certainly make them very effective.
Are you suggesting this is unethical? What do others think?
February 14th, 2008 at 9:45 am
This is a really interesting post and a fascinating example of real brand community building. This is real “Brandship” stuff and there is no reason why it couldn’t be repeated in other countries.
I appreciate what CAMRA Chris says and if he thinks CAMRA need a hand with their brand building (and I would say he’s right) I am sure he has plenty of resource between us.
As for Stanley’s suggestion of restrictive practices, it seems to me that it wasn’t that long ago that it worked in exactly the same way in the UK. It certainly does in other countries that I operate in, but I would suggest that as long as Efes can get away with it they are doing exactly the right thing in investing in their brand community ready for the day when all that changes.
May 4th, 2010 at 5:16 am
Hi there Nigel, Please let me give you an ‘up to date’ comment with a resonance that is growing.
Marketing Efes in the UK… a piece of cake! Surely the company should bank on a positive reaction to ALL those tourists - a growing number who have had holidays in Turkey. The flavour, quality and pleasure that Efes, Efes Extra and Efes Dark give will be remembered by true beer fans. Personally I have lived all over the world and high on my list of enjoyable beers is Keo from Cyprus but this is a pale substitute for Efes.While my friends and relatives back in Blighty are making do with Carlesberg and supermarket own brands, I am living in Turkey and enjoying Efes to the full.
Therefore… surely Efes should market along the lines of.. ‘THE BEER TO REMEMBER’ … HAPPY TIMES AND HAPPY HOLIDAYS.
Very best regards
Richard