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May 7, 2019

JULIE HENNESSY

Stella Artois in South Africa:

Cause Marketing and the Building of a Global Brand

On January 17, 2017, Ricardo Tadeu, AB InBev Zone President for Africa, sat in his office in
Sandton, South Africa. He could not remember being more excited about a business opportunity
than he was about launching Stella Artois beer in South Africa. He was thrilled not only by
the challenge of introducing the premium brand to the South African market but also by the
opportunity to further a cause marketing effort about which he was passionate.*

Tadeu had just returned from the World Economic Forum in Davos, Switzerland, where he
had spoken on a panel alongside Matt Damon and Gary White, cofounders of Stella Artois’ partner
Water.org, a leading global nonprofit created to help provide access to clean water and sanitation
to people in the developing world. The trio used the conference as the platform to announce a new
four-year partnership renewal that planned to reach 3.5 million people by 2020.

From 2015 to 2017, Stella Artois had not only reached over a million people through its
promotional campaign selling limited-edition Stella Artois branded chalices but also had increased
its sales in markets where the campaign had run, with one exception: Mexico.

With water supply problems fresh in the minds of South African consumers due to water
shortages in the country’s capital of Cape Town, Tadeu felt the timing could not be better to use
the water initiative to launch the brand. He began working to finalize his recommendations for

* See “The Wait for Water | Water.org & Stella Artois,” posted by Stella Artois, February 2, 2018,
https://www.youtube.com/watch?v=9hEwOoBKD80.

©2019 by the Kellogg School of Management at Northwestern University. This case was prepared by Professor Julie
Hennessy. Cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements,
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 S t e l l a A rto i s in South Africa KE1132

launch activities and to address concerns that launching with a water initiative in South Africa
might repeat the disappointing experience of Mexico.

The Beer Market

Global beer sales were nearly 600 billion USD in 2017. The five largest markets were Germany,
the US, Brazil, Russia, and China. Global beer sales peaked and then stalled in 2015, with all those
markets but Germany seeing lower consumption (see Figure 1). However, global consumption
was predicted to grow at a CAGR of over 3% through 2025, with the highest growth forecast for
markets in Latin America, Africa, and the Middle East.1

Figure 1: Beer and Alcohol Consumption, 1994–2016

Source: “Around the World, Beer Consumption Is Falling,” Economist, June 13, 2017.

Although beer was a truly global category, consumption patterns varied according to the
maturity of each market. As markets matured, consumer demographics, usage occasions,
competition, and price points evolved in predictable ways. Market maturity was categorized
as follows:

• Level 1: In Level 1 markets, beer was consumed primarily by men, usually at a bar or on
very informal occasions without food. A bar was often nothing more than a stand or shed
with a few tables and potential access to ice or refrigeration. Home-brewed beverages were
also sometimes served at bars; commercially produced beer was usually the most expensive
product available. That said, Level 1 markets had no premium beer segment or higher-
priced brands. Uruguay and Uganda were examples of Level 1 markets.

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 KE1132 S t e l l a A rto i s in South Africa

• Level 2: In a Level 2 market, women began to enter the beer category, and consumption
occasions expanded to include mixed-gender parties and social gatherings, sometimes
accompanied by food. Category pricing began to expand, and premium-priced beers
emerged. Brazil was a Level 2 market.

• Level 3: When a market matured to Level 3, consumption moved for the first time to the
home. Relaxed occasions, including parties and other events, occurred at home, usually
with meals. Women and families were present, and food was plentiful and important. Beer
was often not the only alcoholic beverage option; wine and spirit-based mixed drinks also
played a role. Category pricing expanded further, and premium-priced options experienced
the greatest growth. The US and Germany were Level 3 markets.
It should be noted that these levels were not mutually exclusive. Level 3 markets such as the
US also had Level 2 occasions and establishments. The level of a market, therefore, referred to the
highest level of maturity within it.

Stella Artois History

Stella Artois had a long and notable history. In 1717, in Leuven, Belgium, Sébastien Artois
purchased a brewery that had been established in 1366 and renamed it Brouwerij Artois.* Stella
Artois was created as a seasonal beer in 1926 and was produced year-round beginning in the
1930s. A premium brand in most markets, it has been depicted served in a trademark glass or
chalice (see Figure 2).† In 2017, Stella Artois was available in most drinking establishments in
Belgium. Although “common” in terms of being readily available, Stella Artois was viewed by
Belgians as a brand with a reputation for quality.

Figure 2: Chalice

* In 1988, Artois Breweries formed a partnership with a competing Belgian brewery to create a company called
Interbrew. That company merged with Brazilian brewer AmBev to form InBev in 2004, which merged in 2008
with Anheuser-Busch to create AB InBev.
† The nine-step “Belgian Pouring Ritual” shows the proper way to pour and serve a glass of Stella Artois, both
historically and today. See “How to Pour a Beer - The 9-Step Pouring Ritual | Stella Artois World Draught Masters
2014,” posted by Stella Artois, April 25, 2014, https://www.youtube.com/watch?v=0kOSAaTeG1c.

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Stella Artois’ first major overseas market was the UK, where the beer was brewed under license
starting in 1976. The brand was positioned as a premium product with a high price and supported
by a famous advertising campaign called “Reassuringly Expensive.” The campaign, which ran from
1982 to 2007, emphasized the unique quality of Stella Artois beer and the lengths customers
would go to get it.*

The original formulation sold in the UK had an alcohol content of 5.2%, which was stronger
than most mainstream lagers. Deep discounts offered to the retail trade throughout the 1990s
and early 2000s helped the brand gain wide distribution, but the combination of high alcohol
content and low price created an unanticipated reputation as the drink of choice for “lager louts—
stereotypical binge drinking and pub brawling scoundrels who you normally associate with football
hooliganism.”2 The Stella Artois brand management team’s efforts to counter these associations
were notably aided by lowering the alcohol content to 4.8% in 2012, by discouraging discounting,
and by trimming distribution.

Stella Artois was introduced to the US in the early 2000s. Because it was European and sold
in a green bottle, it was perceived as a premium beer. Marketing efforts prioritized on-premise
sales (bars and restaurants) versus off-premise (liquor and grocery stores). Having Stella served
on-premise in the branded chalice was a successful marketing tactic in the US. Whereas the use
of branded glasses was a common practice in European bars and pubs, it was novel in the US and
enhanced the beer’s premium image.

Stella Artois continued to use highly distinctive advertising to build its brand reputation in
the US market. Print ads supported Stella Artois in the “She’s a Thing of Beauty” campaign. The
advertising was shot by well-known photographer Bert Stern, with a Vogue-like, artistic style that
was distinctly different from advertising for other beer brands (see Figure 3). A similarly distinctive
approach was used in TV advertising, which became increasingly sophisticated over the years.†

Figure 3: “She’s a Thing of Beauty” Ad

* See “Stella Artois Whip Around directed by Jonathan Glazer,” posted by angelakard87, December 21, 2011,
https://www.youtube.com/watch?v=My8BZc9b0fU, and “Stella Artois Advert,” posted by grahamf19, December
26, 2006, https://www.youtube.com/watch?v=ogy2xC6ores.
† See “Stella Artois 5% - Preparation,” posted by DigitalCinemaMedia, June 17, 2010, https://www.youtube.com/
watch?v=QgiKZLbYrGY, and “Romantic Stella Artois Beer Commercial,” posted by Shaun Dimmick, March 9,
2013, https://www.youtube.com/watch?v=b8V_8pxsWPY.

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 KE1132 S t e l l a A rto i s in South Africa

This approach succeeded in positioning Stella Artois as a luxurious beer for a more
sophisticated beer drinker and beer-drinking occasion. US sales of Stella Artois grew 123.7% from
2000 to 2015.3

Challenges in 2015
Stella Artois’ sales growth in the US slowed in 2015 along with the whole category. In
addition, the brand team was concerned that the brand advertising might not be working as well as
before. Response to new executions of the “She’s a Thing of Beauty” campaign was disappointing.*
Another campaign, which dramatized the founder story of Stella Artois, called “Be Legacy,” also
failed to meet expectations.†

The global brand team commissioned a large-scale research project to try to understand the
reasons for the slowdown. The US brand team combed through the research data to recommend
a plan for reinvigorating volume growth. They concluded that the notion of “premium” in the
US market was changing. Although Stella Artois had been successfully positioned as pricey and
exclusive, these were no longer completely positive notions (see Figure 4).

Figure 4: Changes in “Premium” Perception

Source: AB InBev.

A new set of premium brands was emerging. Within the beer category, craft beer brands defined
quality and premium through founder stories, craftsmanship, and authenticity. Brands in other
categories were increasingly building a “better world” purpose into their core positioning—that
is, connecting their mission to outside causes to make themselves more distinctive and relevant.
For example, Toms focused on providing shoes for children in need, while Patagonia emphasized
resource conservation.

* See “Worth The Effort - She Is a Thing of Beauty Advert,” posted by Stella Artois UK, September 16, 2015,
https://www.youtube.com/watch?v=s6_h0HUSZ_Y.
† See “Stella Artois Be Legacy - The History of Sebastian Artois - Stella Artois Advert,” posted by Stella Artois UK,
March 14, 2016, https://www.youtube.com/watch?v=GSKkYUCqIho.

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“Buy a Lady a Drink”

While still experimenting with other advertising platform ideas, the Stella Artois team began
looking for a relevant cause marketing approach. In 2015, the team entered into a one-year
promotional partnership with Water.org.* At the time, Water.org was active in Bangladesh, Brazil,
Cambodia, Ethiopia, Ghana, India, Indonesia, Kenya, Peru, the Philippines, and Uganda.

With its new partner, Stella Artois developed a joint promotional campaign called “Buy a
Lady a Drink” (BALAD). The centerpiece of the campaign was a call to action to buy a limited-
edition Stella Artois chalice, the purchase of which would provide five years of clean water for one
person through Water.org.† Although the campaign was envisioned as a short-term promotional
endeavor, its success prompted the team to consider whether it should be a longer-term “brand
purpose” campaign.

Nevertheless, interest in the campaign was not universal across the teams responsible for Stella
Artois in each country. The Stella Artois team in the US strongly supported the campaign, but
Stella Artois teams in the rest of the world were not convinced that it was right for them. By 2017,
however, data showing the success of the BALAD campaign (part of Better World Activation) had
most countries eager to participate (see Figure 5).

Figure 5: Results of BALAD Campaign

Source: AB InBev.

Based on the positive results from the US and several other markets, Stella Artois decided to
use the BALAD campaign as a foundation for its entry into the Mexican market. Typically, the
global team had introduced Stella Artois to a new market by positioning it as a premium European
beer and focusing on the on-premise market. Stella Artois was placed in higher-end bars and
restaurants with Stella Artois-branded chalices and strong trade support.

* See “‘Buy a Lady a Drink’ | Matt Damon Announcement | Stella Artois | 1:36,” posted by Stella Artois, January
21, 2015, https://youtu.be/-jerKL6qCpk.
† See “Stella Artois Water Leaves a Mark Commercial :30,” posted by Stella Artois, February 18, 2016,
https://www.youtube.com/watch?v=NyH5xsiH8ro.

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 KE1132 S t e l l a A rto i s in South Africa

In Mexico, however, the water campaign was included as a central part of the Stella Artois
brand launch as soon as awareness for the beer reached about 15%. Results were disappointing,
which made Mexico the first market in which the water campaign failed to produce significant
revenue gains.

Plans for South Africa

Following its 2016 combination with SAB, AB InBev was planning for the introduction of
Stella Artois to South Africa in 2017. The South African beer market was growing, but beer still
held a relatively low share of total alcohol consumption. Beer consumption was predominantly
a male activity in off-premise social occasions; penetration for women was 37% vs. 62% for the
overall population.

The beer market was dominated by SAB, which had 85% share, mostly through local brands
Castle and Castle Lite. Heineken was the leader in the small premium segment, which had a total
share of less than 8% by volume.
The introduction of Stella Artois was a major undertaking for Tadeu and his team. After his
presentation at Davos with Water.org, he was anxious to make the BALAD water campaign a
central part of the launch. Water.org was not active in South Africa, but access to water had
recently been a high-profile issue in Cape Town, which had imposed extreme water use restrictions
in the midst of a countdown to Day Zero, when the city expected to run out of water.4

The timing for the launch could not be better, Tadeu thought. He was aware of the troubles
with the brand launch in Mexico, but he was confident that circumstances were different in
South Africa. He needed to prepare arguments to convince the doubters and to develop his
recommendations for introduction activities.

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Discussion Questions
1. What learnings should be derived from Stella’s early positioning and image problems in the
UK market?

2. How does the market development model serve as a guide for growing both beer category
volume and brand sales?

3. Can you diagnose what went wrong with the Mexico market launch of the Stella brand? Is this
campaign appropriate for a new brand launch? How do you think the cause marketing issue of
water would resonate with consumers in a market like Mexico?

4. As it planned for the South Africa launch, Ricardo Tadeu’s team considered the success
of the BALAD campaign in the US and many other markets. The team also had some
knowledge of the disappointing results in Mexico. What are the pros and cons of centering the
introduction activities on Stella Artois’ global sponsorship of Water.org? What would be your
recommendation for introduction activities?

Endnotes
1 Allied Market Research, “Beer Market by Type, Category, Packaging, and Production: Global Opportunity
Analysis and Industry Forecast, 2017-2025,” March 2018, https://www.alliedmarketresearch.com/beer-market.
2 Best Beer HQ, “Top 5 Facts About Stella Artois,” May 21, 2015, http://www.bestbeerhq.com/top-5-facts-about-
stella-artois.
3 Samuel Stebbins, “Modelo Especial, Stella Artois Are Fastest Growing Beer Brands,” USA Today,
December 17, 2016, https://www.usatoday.com/story/money/business/2016/12/17/americas-fastest-growing-
beer-brands/95203352.
4 Aryn Baker, “What It’s Like To Live Through Cape Town’s Massive Water Crisis,” Time, February 2018,
http://time.com/cape-town-south-africa-water-crisis.

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