Carlsberg Taps The Next Big Beer Market (Really): Women

Carlsberg Group CEO Jorgen Buhl Rasmussen says in spite of gimmicky "innovations" in beer marketed to women, they remain a huge untapped market. But catering to them requires a new approach in management, strategy, and product innovation.

COPENHAGEN--Jorgen Buhl Rasmussen, the CEO of brewing giant Carlsberg Group, says the big beer industry has grown stale when it comes to innovation, and altogether too comfortable with its staple consumer: sports-loving dudes.

“The beer category has been suffering in terms of image. In the last 10 to 15 years, it is often connected with drunken people on the street sitting with beer cans,” he says. While the craft beer trend has been injecting new life into the beer market, it is also still too male-oriented. Men still buy 74% of lager beers, according to Datamonitor. For Carlsberg, men buy 80%. “We can and we must come up with more products that are appealing to females,” Rasmussen says.

Jorgen Buhl Rasmussen

That task is first product development, followed by smart marketing, he believes. And neither of those are easy, as women have traditionally been more interested in wine than beer-style brewed drinks. So Carlsberg is dipping its toe in the market, inventing a few new female-friendly products and marketing them carefully and organically in small, highly developed markets like Sweden and Switzerland.

The alternative drink laboratory is sticky-sweet and littered with failure. Beer companies have tried beer in slim-line cans, light beers, and beers so fruity they might as well be wine coolers. Brewers have tried low-carb, low-calorie, and caffeine-fused drinks. Some “malternative” and “alcopop” brands like Coors's Zima were hot for a time, but ultimately discontinued. Some wine coolers switched from wine-based drinks to malt-based mixtures and took a precipitous slide in sales in the 2000s. The Alizé cognac-based liquors became an urban product rather than high-end.

But beer industry veterans haven’t given up hope completely. Rasmussen and others still think product innovation and marketing brewed drinks toward women is possible. Increasingly, women know about different, palate-friendly beers like Abbey Ales, fruit lambics, ciders, ginger beers, and dark stouts--as well as about the more varied glassware they require and how to pair them with foods. Women want “a less bitter, non-bloating beer that does not give you a malty/hoppy aftertaste and breath,” says Carlsberg spokesman Ben Morton. “Flavor proliferation has become a key feature of beer innovation.”

Furthermore, it’s a key way forward when sales and profits in mature markets like the U.S. and Western Europe have plateaued and Carlsberg and the other top 4 beer companies in the world are facing competition on all sides from rival beverages ranging from Red Bull to wine to whisky. “If you look back at the last 10-20 years, and you think about what has been done in terms of innovation in the beer category, yes, you have some but not enough,” he says. “We are focused on doing more innovation to make this category more attractive and to get more consumers to engage.”

Rasmussen thinks a future round of innovation should start with product innovation rather than marketing the same old stuff in a different way. As CEO, he centralized innovation at Carlsberg, combining the R&D center with consumer insights and innovation marketing teams. The company doesn’t disclose R&D figures. But he has made “female drinks” a platform inside the company, identifying it as a major initiative on par with “health and wellness” innovation. He’s recruited female executives, researchers, and marketers to lead the brainstorming for these new “brewed” drink categories.

The idea, he says, is not to create wine coolers or non-beer products geared to women. Rather, he wants to come up with new types of drink recipes that can be made in Carlsberg-owned breweries but are lighter in alcohol, refreshing in taste, and perceived as healthy enough to take on wine, champagne, and other drinks vying for women’s dollars. “In a brewing facility you can do non-alcoholic products, sweet products, color products,” he says. “You can do more or less everything. It’s a very obvious question leading to a very obvious opportunity: We must be able to come up with more ideas and concepts for women.”

Instead of rolling the new drinks out worldwide, Carlsberg is testing beverages in small, trend-setting markets such as Switzerland, Sweden, and Denmark. If successful with women in some of these most developed countries, the theory goes that the drinks might work in other larger markets.

Carlsberg has developed several concepts, launching one called Eve, a light, fruity, sparking alcoholic drink that is low in alcohol and calories but beer-based. It has expanded Eve’s launch market of Switzerland to Russia. Company marketers say the drink should be served “in a Champagne glass to emphasize its aspirational qualities.”

More recently, Carlsberg launched BEO, a healthy, juice-like drink low in alcohol content. It’s “a brewed soft drink” based on natural ingredients but made with brewing equipment. It was tested in Sweden this year and the company plans to roll it out nationally there in 2013, expanding more broadly if sales perform well.

A third attempt by Carlsberg is on a minimalist, design label for a light beer called Copenhagen, a name intended to evoke fashion and design. “Many young people aren’t keen on the bitter aftertaste of beer,” said Kirsten Ægidius, VP Marketing. “We have created a highly drinkable beer with a balanced taste, a real alternative to white wine and champagne.” The product and brand is being tested in Nordic markets.

Several other companies are also working on products. Molson Coors Brewing Co. launched a BitterSweet effort in 2009 aimed to “remove the gender imbalance that exists around beer consumption” and boost its sales to women, which amounted to a meager 17% of sales in the past. Its U.K. and Ireland offices launched the Animée drink last year, which has 4% alcohol and is a lightly sparkling, finely filtered brewed drink in three flavors: crisp rose, zesty lemon, and clear filtered. The company’s marketing says it is aimed to “dispel the perception among women that all beers look and taste the same.” It said 79% of women in the U.K. never or rarely drink beer and, after many surveys, they hope Animée changes that objection without being patronizing.

Rasmussen, who spent most of his career at consumer products companies such as Duracell, Gillette Group, Mars, and Unilever before joining Carlsberg, wants to re-balance the customer gender base from 80% men and 20% women toward a 50%-50% split. When he oversaw Northern Europe for Gillette, he observed the brand bending of shaving products into the female market. That move helped expand the overall market for shaving products as women started buying more expensive, heavy-duty shavers (the type that men normally bought for their faces) to use on their legs instead of cheap plastic ones. Similarly, he remembers supermarkets 20-30 years ago only selling personal care products like lotions to women, while men just bought deodorants and shaving products. “Now, when you go into a supermarket, the number of products for male personal care is enormous and a fast-growing category.”

“We don’t know where it is going to end,” Rasmussen says. “I think with any piece of innovation, sometimes you get it exactly right to begin with. But, more often, you have to go back and do some more work and rework until you finally have the successful product.”

FastCompany