Less Filling, Tastes Imported... And Profitable

Focused marketing to the growing Mexican American market is the secret of Tecate’s success.

By Marissa Rodriguez

Beer aficionados have long looked to imported brews for the next big beer, and their next big purchase. Although Americans as a whole prefer national brands, these persnickety drinkers look to brands from beyond the borders for their drink of choice.
While brands from Japan, the UK and Latin America have developed a growing cult following, the majority of import sales have gone to Mexican beers. And with good reason. In addition to luring American drinkers with their exoticness—as the Mexican beer brand Corona has done, in part by its campaign images of white-sand beaches and cold beer—Mexican beers have enjoyed popularity with both acculturated Mexican Americans and with Mexicans as they cross the border and move to the U.S. As Corona and other import brands have gone after all segments of beer drinkers with their campaigns, however, Tecate has taken a different, more focused approach to its marketing.
“I think what is unique about Tecate is how specific its target is,” says Eduardo Casas, brand director for Tecate and the new Tecate Light. “Think of Corona or other brands; they look to other markets. But the secret to our success is to go after one market, and this has served us extremely well. The more authentic we are, the more Latin we are, the more well-received we are in the general marketplace.”
The company’s marketing efforts are homage to the beer’s long history in Mexico, where it is more than just an established brand, it’s part of the beer culture. Tecate first launched in Mexico in 1944 as a regional beer in Baja, California. Ten years later it was acquired by Cerveceria Cuauhtémoc, a Mexican brewing company that took the brand national and made Tecate the first canned beer in Mexico. In 1994, the beer celebrated its 50th anniversary and became the No. 1 imported canned beer in the U.S.
In the U.S., marketing and advertising for the Tecate brand is geared toward Mexicans and Mexican Americans. Ads have traditionally included nods to Spanish phrases, have borrowed Mexican jargon or have used images of boxing, soccer, baseball or rodeo, all popular cultural cues for Mexicans and Mexican Americans. In March, Tecate announced a new campaign called “Con Caracter” or “With Character” in Spanish. The 30-second television ads, which premiered on a Spanish-language boxing program sponsored by the beer, feature Mexican working men. Radio ads have run in 36 key Hispanic markets, reports Brandweek.
Tecate is already among favored top imports in the U.S. Among all imported beers, both canned and bottled, it ranked No. 4 in 2006, and some sources report it currently holds the No. 3 spot among imports. In 2005, high-ranking officers at Heineken USA estimated that the brand sold about 13.5 million cases per year. (Corona, popular in the U.S. since the mid-1980s and which The New York Times has called Mexico’s equivalent of Budweiser, has been near or at the No. 1 spot, and estimates put 2005 sales of that brand at 100 million cases per year.)
As popular as imports have been to the U.S. beer drinker, Hispanic or otherwise, foreign been companies or their U.S. subsidiaries have taken cues from American tastes, which tend toward the light beer. Anheuser-Busch’s Bud Light has been the top-selling beer since 2001. Thus the imported light beer was born, and recent reports put this new type of brew at owning 2 percent of the light beer market. With a double punch of appeal, being both imports and light, these beers have all the opportunity in the world to cultivate that share.
“Light beer has been growing in the U.S.,” Casas says. “The light beer category represents 50 percent of [sales] in the U.S. and is one of the few growing industries in the U.S.” The publication Beverage Marketing Quarterly echoes those figures and adds that it’s the import specialty market that has driven the growth in recent years.
In the summer of 2007, Tecate introduced its lower-calorie variety to the U.S. And the first announcement about the plan to launch Tecate Light in the U.S. occurred in September 2006.
Tecate Light had already found big success in Mexico as the country’s first and top-selling light beer. The beer launched in Mexico in 1992, because the company saw light beer sales growth in the U.S. and interpreted that as an opportunity for sales in Mexico, says Casas. However it wasn’t until about four years ago that Mexican beer drinkers really tapped into light brew.
“Right now it’s the fastest growing brand in Mexico and outsells the other competitors 10 to 1,” Casas says. “It is growing throughout Mexico and we anticipate that the beer will enjoy more growth. We expect that to translate into growth in the U.S.”
Armed with successful sales south of the border and with the successful launch of another product, Heineken Premium Light, Heineken USA felt assured it could find cross-over success for its Tecate Light variety stateside. Tecate, owned and distributed by FEMSA Cerveza in Mexico, is distributed, imported and marketed by Heineken USA, along with FEMSA’s other beer brands—Dos Equis, Tecate, Sol, Carta Blanca, Bohemia.
The launch strategy for Tecate Light was to introduce the beer in select cities across the country and hold individual launch events one by one, first in Los Angeles and then following in cities such as Las Vegas, Austin, Phoenix, Albuquerque and San Jose, all cities with large Hispanic populations that are predominantly of Mexican descent.
“Right now we are focused, geographically speaking, on states along the Southwest... launching [in 2008] in Colorado and Oklahoma,” says Carlos Boughton, brand director for Tecate. “We are going to expand into other markets, we are going to grow the brand through a slow build as opposed to a national launch. There are a lot of benefits of building through momentum. We have a calculated growth strategy.”
According to the Tecate Light website, the beer is available in 18 cities in Illinois, Texas, New Mexico, Arizona, California and Nevada, as of press time.
“Retailers are excited about it. They are promoting it,” says Casas. “One of the reasons we launched it is that Wal-Mart came to us and said they [were interested]. FoodCity in Phoenix has been asking for it for years. They see what is going on the other side of the border.”
Tecate Light however, will have its own brand image. As both Casas and Boughton describe, the original Tecate beer will be targeted more toward the first-generation Mexican immigrant in the U.S., whereas “the light brands will focus on Mexican-American born consumers,” says Casas.
“The most interesting thing about Tecate Light is that [we are taking] an iconic brand and giving it a personality more in tune with the English speaker,” says Boughton.
This time around, the product seems to have found a foothold. This is the second attempt at introducing a light variety for Tecate. In 1993, the year after its debut in Mexico, Tecate Light Premium was launched in the U.S. by importer Wisdom Import Sales Co., a subsidiary of FEMSA Cervesa. That original launch—in California, Texas, Colorado, New Mexico, Arizona, Nevada and Illinois—was reportedly described by some sources as a failure.
This time around the Tecate and the Tecate Light brands have been receiving major attention and extra TLC as a new agency, Adrenalina in New York, has been tapped to create marketing efforts. That, coupled with a larger pool of potential drinkers in a growing Hispanic population, point to probable success these 15 years after the first attempt. Another good sign: while it’s been reported that the first quarter of 2008 saw a slump in beer sales in the U.S., Tecate was not among those beers that took a hit.
Only time will tell if the differentiated marketing techniques, wider pool of potential drinkers and imported light appeal will amount to success. Sales figures were not available as of press time. “We are still in the first year, continuing to generate awareness as part of the launch,” says Casas.