Brand Stories: PBR and the $44 Beer Bottle

PBR's Brand Repositioning

Pabst Blur Ribbon, better known to most as PBR, has served as one of the most popular beers for middle class Americans since its origin in 1844.  What was once the cheapest beer on the shelf is now a global phenomenon.

Brand Repositioning in the Early 2000s

In the early 2000s, PBR gained popularity with urban hipsters, college students, and millenials. The new fans were attracted to the minimal marketing and non-mainstream attitude. Following a nearly 20-year decline, sales suddenly rose 5%.

While most companies would have rebranded to appeal to this new audience, PBR opted to keep their branding the same in order to maintain the authenticity that attracted hipsters in the first place. Instead, they sponsored customer events and featured user-submitted photography and fan art on their website to encourage customer interaction, all without calling in the PR team.

Finding an Audience Abroad

Following the example General Motors set in 1999, PBR set out to appeal to a worldwide market and created a case study in brand repositioning.  In fact, big-name brands have been branding to the foreign market for decades. If you’ve ever taken a trip to Europe, you may find Disney comics are just as popular there as they are here. Kit-Kats and Spam are two other food brands that sell just as well abroad—if not better—than they do domestically.

Through a licensing agreement and joint venture arrangement with China Pabst Blue Ribbon, the American company has been able to successfully branch outside of the United States. PBR rebranded their once generic American product with a luxury ad campaign. What has been deemed “Blue Ribbon 1844” is selling for $44 a bottle in China. The specialty beer is considered a luxury in China and gives the perception of riches.

Brand Repositioning - The Story of PBR

The brewmaster states that the specially crafted reddish brown strong ale is in fact better than its American counterpart. “Blue Ribbon 1844” has the appearance of brandy, an updated recipe, and is aged rather uniquely, but it appears that the branding and perception is what is attracting most Chinese consumers.

PBR was once considered a working-class beer, but due to recent rebranding efforts, it has become the beer of choice for hipsters, college students, everyday Americans, and foreign enthusiasts alike.  The increase in sales led to a 10% price increase in 2009.  PBR’s success domestically and abroad has led to pricing shifts throughout the beer industry worldwide.

Pabst Blue Ribbon has proven that any business can create a successful brand identity and reposition themselves to be who they want to be, regardless of their current image. They continue to be one of the fastest-growing consumer brands in the country, with widespread influence around the world.

Shrewd Chocolateering From Hershey’s

Not sure whats going on at Hershey’s, but it seems that they are constantly in the news these days with innovative and cutting edge new business initiatives.  Seems to us that the company has taken a more aggressive position on investing in growth, and it also seems that this change has been a huge success.  It has not only increased the company’s sales (which it has), but more importantly its market share and brand value.  Below is a look at an interesting case study in building a brand – a ubiquitous legacy brand – courtesy of Hershey’s.

Building Awareness

Hershey's: How to build a brand

In a recent article from Adage, we were surprised to learn that Hershey’s did not launch its first national ad campaign until 1970.  And even then, Hershey’s has historically been fairly conservative with its ad spend.  In recents years, however, that trend has started to change.  Since 2006, the company has increased its ad budget from a little over $100 million to almost $600 million per year.  This sea change in strategy has not only affected signature brands like Reese’s, but it has also served to support many of its smaller niche brands like Rolo, and more recently, Take 5.

Leading with Technology

As you may have seen, Hershey’s recently announced a partnership with 3D Systems, a leading 3D printing company that also happens to produce 3D printers that can print objects out of food (including chocolate).  With this arrangement, Hershey’s has not only identified one of the fastest growing technologies in the world, but it has also become a pioneer in bringing this technology to the whole food industry.  Most people dont think about 3D printing as a food manufacturing process, but that is a very real application for this technology.  It has the potential to disrupt the existing supply chain for food manufacturing, while at the same creating dramatic new revenue streams for food companies that partner with 3D printer manufacturers (or become 3D printer manufacturers).  Whether selling branded 3D food printers, raw materials, components, food products, or other accessories that are beyond our imagination, the potential opportunities for food manufacturers are astounding.  And it speaks volumes that Hershey’s was among the first – if not the first – to act in that space.  As outsiders, hard to imagine that Mars is not negotiating a deal with Stratasys or ExOne as we write this.

Strategy & Innovation

In the realm of product development and innovation, Hershey’s has introduced a number of successful new product launches around the globe, while demonstrating great vision and timely execution.  For instance, in the U.S., the company has seen success with various new and creative line extensions such as Reese’s Minis, Hershey’s Drops and Rolo Minis.  Moreover, a few weeks ago Hershey’s announced that it will extend its brand into the world of chocolate spreads.  Not certain whether this will be an outsized hit for the company, but it just makes so much sense to use the Hershey’s brand as a springboard into the chocolate spread category (not coincidentally the fastest growing category in the U.S. spreads market).  All that said, perhaps the most interesting part of the Hershey’s story is its laser-like focus on international growth, and particularly the Chinese market.  The company has made clear that China is at the top of its priority list.  Accordingly, it sports a fulsome product pipeline in that country, with Hershey’s Kisses, solid chocolate globes, and more recently a new line of soft caramels that will soon be finding their way into the U.S. market.