Five Questions with Carlsberg
Denmark In New York talks with the Danish brewery’s Senior Director about how Denmark’s biggest beer brand is tackling the US market
When Carlsberg first opened in 1847, it was a small, local brewery on the outskirts of Copenhagen. Today, it has grown into one of the largest breweries in the world.
For many, that impressive growth sums up Carlsberg’s whirlwind history: it’s the world famous Danish beer brand that produces “probably the best beer in the world.”
But, for Arun Adhikary, Senior Director at Carlsberg Group, there is much more to Carlsberg’s story than that.
With 41,000 employees working on 140 brands and a yearly revenue of nearly 10 billion USD, Carlsberg has set its sights on expanding across the US market — in a very sustainable way.
Denmark In New York sat down with Arun Adhikary to talk about Carlsberg’s plans in the US.
Denmark In New York: Carlsberg is a giant of the beer brewing industry and known to many in Europe. But perhaps it’s less known here in the US. How do you plan to broaden Americans’ exposure to the Danish beer?
Arun Adhikary: Carlsberg Group is the third largest brewery in the world. Though Carlsberg brand has been present in the US since the 1950s, we are a niche player here. In the US, we are adopting a ‘Big City’ approach where we have a start-up type of set-up and are purposefully focused on select markets. We started with Boston as a priority market in 2017 and have now expanded our reach to New York, Philadelphia, Miami and Tampa. We have physical distribution across major cities in the US but the five mentioned above are our priority markets for 2019.
We have clear strategies in place to broaden the US consumer base’s appeal and exposure to Carlsberg as a brand and company. Let’s start with the product itself. In 2019, we will be launching an all-new packaging for Carlsberg brand that highlights its origin as a Danish Pilsner. There are several sustainability elements built into the new packaging materials including the cradle-to-cradle certified ink that we use on labels which helps with recyclability and is produced using renewable energy; the ZerO2 cap with oxygen scavenger in the lining of the cap which actively absorbs oxygen and reduces flavour oxidization; and the recycled secondary packaging materials that bring about more demand for recycling and helps close the material loop.
From a marketing perspective, apart from highlighting our sustainability initiatives, we aim to establish hygge and the Danish way of life, along with Liverpool FC activations, in our priority markets here. Expanding our bandwidth with successful Carlsberg Group-owned global brands such as Kronenbourg 1664 Blanc and Somersby Apple Cider, will enable us to unlock latent awareness for those US consumers that are well-traveled across Europe and Asia as well as build new awareness and consideration for those who have not been exposed to our portfolio before. Further, our collaboration with Microsoft in using Artificial Intelligence to speed up innovation is well-documented and advertised in the US mainstream media. Collectively, our increased investment in the US market over the next few years, along with strategic partnerships to generate awareness, trials and repurchases will certainly help broaden Carlsberg’s appeal.
What challenges do you as a company face in the US market?
The US market is peculiar in the sense that there is a three-tiered distribution system. Scaling distribution takes a lot of coordination throughout the value chain. The beer market is very fragmented. It takes time and significant resources to build consumer awareness and affinity towards a brand. The vastness of the market makes it easy to spread too thin and not make an impact. However, we have an amazing group of customers including our importer St. Killian Importing Co., along with retail partners across the US, and a very capable team at Carlsberg USA that have helped grow our business significantly over the past two years. We continue to work to find ways to scale our growth and amplify our successes across multiple cities and states.
What is the biggest difference between working with Danish consumers and US consumers and how is Carlsberg working to address this difference?
I believe there are a lot of common aspects along with key differences between consumers in the two countries. Both sets of consumers are keen to associate themselves with brands that hold the right purpose. At Carlsberg, our purpose has always been prominent from the beginning. We pursue perfection every day and strive to brew better beers. We don’t settle for immediate gain when we can create a better tomorrow for all of us. As such, we are brewing for a better today and tomorrow.
The key differences between consumers in the two countries are largely around awareness, experience and diversity that perhaps results in a set of expectations or curiosity. In Denmark, the majority of consumers know what Carlsberg Group is about and the portfolio of beers that are around to cater to various occasions and moments. Carlsberg is imbedded into more than just beer — into society, heritage, culture and arts. Consumers get to experience Carlsberg in several different ways in Denmark. There is likely a set expectation among consumers of what Carlsberg is and should be.
Whereas in the US, diversity and variety play significant roles. Each State is like a country and consumers have varied lifestyles. We have multi-ethnicity with significant population of minorities including Hispanic, African American and Asian communities. We can see consumer preferences change from Massachusetts to Florida, and Texas to California. There are more than 7000 brewers in the market offering a tremendous amount of choice to the consumers. Each brewer is pushing information across multiple channels to influence consumer attitudes and behaviors. It’s not an easy feat to win over such consumers, and the trends move very quickly in the US market. Consumers are curious and are constantly on the lookout for what’s new and better.
We are deep rooted in generating insights that allow us to innovate and cater to the evolving consumer preferences. In the US, we are a niche player with significant agility that allows us to identify the mega and micro trends and accordingly shape our proposition in a relatively short amount of time. Our aspiration for Carlsberg Group’s portfolio is to resonate with US consumers in due course as it does today with the consumers in Denmark.
Carlsberg has launched its Snap Pack to reduce waste consumption and is working on a number of other ground-breaking sustainable initiatives. When can American consumers expect to see these planet-friendly products in US stores?
Snap Pack is truly a breakthrough that will save over 1200 tonnes of plastic which is equivalent to 60 million plastic bags. It also helps reduce CO2 emissions significantly. I sincerely hope that the Snap Pack is an inspiration across all categories in the CPG/FMCG sector and collectively we are able to make a significant positive impact towards our environment. We expect the Snap Pack to hit US stores in the first half of 2020. Meanwhile, with our redesign of Carlsberg brand in 2019, the US consumers get to experience several subtle yet impactful sustainable initiatives across all our packaging.
What is the best thing about working in the US?
The US is one of the most complex markets where consumers are extremely passionate about their choices. We don’t ever have a dull day simply because there is so much to do and plenty to grow. The beer industry is at the center of entertainment and woven directly into the social fabric of American popular culture unlike any other market. It’s a premium, affluent, educated consumer, in the world’s biggest beer market by value. The import beer segment is growing and consumers are shifting towards purpose-led brands. Carlsberg Group has all the right ingredients to scale up our operations in the US and contribute to business, society and the environment. The opportunity to create roadmaps for growth, execute strategies, and positively impact the lives of our employees, customers, and consumers makes it really exciting to work in the US.
Ema Seferovic is the Press and Communications Intern at DenmarkInNY.