When the door swings open, our beloved traditional Irishman is met with the unexpectedly tinny refrains of a Mexican mariachi band. He giddily skips into the pub, ducks under some Corona promo flags, and is cheerfully greeted by a sombrero wearing bartender who in a thick Irish brogue says, "Hiya Sean, happy
Cinco de Mayo."
The television ad ends with our country Irishman removing his heavy overcoat and revealing a festively colored, short-sleeve shirt. The Irishman then eagerly reaches for a cold Corona.
So why do even the Irish become Mexican for a day on the fifth of May? And why do people celebrate Cinco de Mayo anyways? Similar to the other great beer selling holiday of St. Patrick's Day, Cinco de Mayo is not welcomed as warmly in its native land as in its adopted homeland. Mexican historians and tourism boards agree that the holiday is only a regional one celebrated mainly in the state of Puebla. But with a little creativity and targeted advertising, American commercialism turned a relatively insignificant historical event into a major marketing opportunity. From the belly of the advertising industry, the American celebration of Cinco de Mayo was born, plastic sombreros and all.
Cinco de Mayo does not commemorate Mexican Independence Day as many people believe. The holiday of Cinco de Mayo, the fifth of May, commemorates the Mexican victory over a French army during a battle in the city of Puebla on May 5, 1862. A few months earlier, French, English and Spanish troops had landed in Mexico to collect debts owed to them by the government. After settling the debts, only the French remained in Mexico.
Through the orders of Louis Napoleon to fulfill his dream of expanding his empire, the strong French army began to fight for control over the country. On May 5, 1862, a Mexican general led approximately 4000 troops into battle against 6000 French soldiers at the forts of Loreto and Guadalupe. In this battle, the underdog Mexican fighters defeated the well-equipped French army and scored a symbolic win.
What is often overlooked is that a mere three days later, the French regrouped and crushed the Mexican army. The French captured Puebla and made its way to Mexico City, where Napoleon installed Maximilian of Hapsburg as emperor of Mexico. The French went on to rule over Mexico for another five years. Today, the Cinco de Mayo holiday honors the bravery and victory of the small Mexican militia at the Battle of Puebla in 1862.
Putting aside Cinco de Mayo's questionable historical significance, there is no denying that it remains a sizable marketing opportunity for Mexican beer importers and retailers. Industry sources say the holiday season contributes between five and ten percent of annual sales volume for Mexican brands. Cinco de Mayo also remains an opportunity to link product sales with a celebration of Mexican culture - of food, music and customs.
RECLAIMING CINCO de MAYO
The beer industry's commercialization of Cinco de Mayo has not been without its critics. In the 1980s, the major breweries latched onto the holiday and transformed it into the commercial success it is today. Coors declared the 1980s to be "The Decade of the Hispanic", and Anheuser-Busch created a separate marketing division to target its promotions to Hispanics.
Some prior Cinco de Mayo campaigns rank among the lowest and most distasteful efforts in industry history. The objectionable campaigns often promoted over-consumption and portrayed Hispanics in unfortunate ways. In its published Report on Cultural Pride, Alcohol & Resistance, the California-based cultural action group, Latinos and Latinas for Health Justice, cites several examples of campaigns promoting over-indulgence including Tecate's "Let's Party" theme and Coors Light's slogan of "Sabemos como celebrar", ("we know how to celebrate"). The group saves its best stuff for last: Corona's use of a "party parrot adorned in a Mexican sombrero, sunglasses and a multi-colored serape holding a bottle of Corona Extra and Corona Light in each claw" with the slogan, "Drinko for Cinco".
In response to these campaigns, the group has led efforts around the country to recapture the cultural significance of the holiday and to lessen the role of alcohol in Cinco de Mayo celebrations. In 1997, the group started promoting its "Cinco de Mayo Con Orgullo" campaign, or "Cinco de Mayo With Pride". It also continues to highlight campaigns it believes serve to demean Hispanics or to promote alcohol abuse.
While the alcohol industry still plays up the party angle in connection with the Cinco de Mayo holiday, producers appear to be exercising more restraint in their campaigns.
When discussing Mexican beers and Cinco de Mayo, there are two frames of reference - Corona and everyone else. Retailers are very familiar with Corona, with its near-untouchable popularity and sales volumes, and its wide-acceptance as the face of Mexican beer. Its producer, Grupo Modelo (GM), is a market powerhouse in Mexico. Founded in 1925, GM dominates the Mexican beer market commanding more than 63 percent of domestic and export market share. It produces ten brands, including the Corona and Modelo lines, and exports five brands in more than 150 countries. GM also serves as the exclusive importer of Anheuser-Busch's (A-B) products in Mexico, and A-B owns 51 percent of GM, though control of the company's day-to-day operations remains with GM.
So while Corona, with the help of A-B and its strong importers, Barton and Gambrinus, has climbed to become America's most popular imported beer, the other players rarely receive much attention. The other major factor in the Mexican beer game is Fomento Economico Mexicano, S.A. de C.V. (FEMSA). Founded in 1890 with the start of the Cervecera Cuauhtemoc brewery, FEMSA produces several beer brands, including Tecate, Sol, Dos Equis, Carta Blanca, Superior, Indio, Bohemia, and Noche Buena. In 1994, FEMSA formed a strategic partnership with Labatt's of Canada, a subsidiary of Interbrew, which owns 30 percent of FEMSA. Labatt USA imports FEMSA's products into the American marketplace.
For the Cinco de Mayo season, Labatt USA is trying to address each of its target markets while maintaining a broader theme for its family of products, according to Victor Melendez, Director of Mexican Brands for Labatt USA. "Our portfolio is comprised of five brands: Carta Blanca, Sol, Tecate, Dos Equis in both flavors, amber and lager, and Bohemia. It's a pretty comprehensive portfolio of Mexican beers. It's actually the biggest portfolio out there. It actually plays very well for us as far as Cinco de Mayo because we're the only portfolio that has five brands. We've been playing with that a little bit. We're going with "Cinco for Cinco." That's our theme for Cinco de Mayo as a family: cinco beers for Cinco de Mayo. All our creative and promotion for this year revolves around the fact we have five great, distinctive beers for your Cinco de Mayo."
"We have a two-fold project here. We have a family theme project, involving all brands. We also have some specific POS items and some specific display enhancers. We have what we call a "Mexican hut", a little hacienda-type hut that we are going to use in the off-premise to display our five brands. It's very festive and has all the typical Mexican fiesta themes and all the branding. We're also going to have individual brand Cinco promotions because in some places we're not able to go in with the full array of brands. We've developed specific promotions for Tecate, Dos Equis and Sol, with individual programs and POS items. This is for both the on- and off-premise items."
Though Tecate is by far the company's biggest seller, with one million barrels of volume compared with less than 300,000 for Dos Equis, Labatt USA does not focus its efforts on Tecate during Cinco de Mayo. "Now the Cinco de Mayo theme is an interesting situation," says Melendez. "It's more of an anglo holiday than a Mexican holiday in reality. Mexicans don't really celebrate Cinco de Mayo. It's more of an anglo, general market holiday, and that is why we're leveraging Dos Equis primarily for this particular timeframe. Dos Equis is targeted to the general market. With Tecate, we're targeting more towards Hispanics. For this particular situation, Dos Equis is our lead brand for our efforts."
Labatt USA retooled its efforts several years ago to deal with a perceived divergence in markets for its product line, says Melendez. "With Dos Equis, we're targeting general market, 21- to 34-year-old males, urban, upscale, college educated. Your typical guy who is working and starting to make good money, has a good job and highly educated. It's more of a general market, urban guy. Everything is in English and is generally marketed. We've been promoting the brand for a long-time. Dos Equis has been in the marketplace for a while but we haven't really done a lot behind it. Recently, we have started a lot of promotions and support behind the brand. It's definitely going to take off."
Unlike its efforts for Dos Equis and the course taken by the importers of Corona, Labatt USA has undertaken a very different marketing course with its leading product. Tecate is the number four import brand in the US, and the number one import brand in the can. With Tecate, Labatt USA targets 21- to 34-year-old males, but focuses on Mexicans and Mexican-Americans, says Melendez. "When I say that, some people get confused. But what I'm saying is we go to Mexicans, born in Mexico and who are now living here. We call this our first-generation consumers. Then we talk to our second and third-generation consumers, which is basically people who were born in the US and who are of Mexican descent. We're specifically targeting each particular group and only targeting it to them in Spanish. Everything we do behind the brand is leveraging the fact that it is an authentic Mexican beer. It's very Mexican in its imagery and communications. It's 100 percent Hispanic and we're not doing anything in targeting Anglos at this point.
For its third largest product, Sol, the company again shifts its focus, limiting its attention to the 21- to 25- year-old male demographic. "It's a younger, more vibrant, refreshing beer. It's more of a summer-type beer if you will. So we have the three different offerings right there for Cinco," says Melendez.
Partly in response to the great success of Corona Light, Labatt USA and FEMSA started test marketing a light beer extension of their flagship Tecate product. The beer is still in its marketing infancy and has experienced some growing pains, according to Melendez. "Tecate Light is only available in a few markets and it's there as a test to see how it goes. We haven't really launched it nationally or even regionally. It's very targeted at this point so I don't really consider it as part of the franchise yet. It hasn't worked that well yet, and the reason is we're still trying to work with our partners in Mexico to really establish the role for Tecate Light and how it will play within the Tecate franchise. We're still working on figuring that one out, even in Mexico. So we don't really want to do a lot of stuff in the US yet until we know exactly where we want to take it."
When preparing for the upcoming Cinco de Mayo retail season, Victor Melendez recommends relying on providing consumers with opportunities to select the right beer for the holiday. "Giving consumers a choice is a huge thing," he says. "It's a very competitive environment and consumers like choices. Consumers want to see and have the opportunity to choose brands. I think our portfolio definitely provides options. You have a very high-end, upscale, heavy-type beer with Bohemia. You have a very Hispanic-type of beer with Tecate. With Dos Equis's flavors and Sol, you have an array of different options to offer consumers. It is also very important that the execution at retail, as far as the display - this is something that they know better than I - that a good, lively and interactive display sells beer a lot."