It must be a relief for Nick Fell, the former president of global commercial strategy at Cadbury Schweppes, not to have to worry about the business implications of the salmonella contamination crisis at his previous employer. But on taking up his new role as group marketing director at brewer SABMiller next month, he will find plenty of other challenges to keep him occupied.
SABMiller, whose brands include Pilsner Urquell, Peroni Nastro Azzurro and Miller Genuine Draft, has a presence in more than 60 countries, spread across five continents.
While its sales in some of the mature markets of Western Europe, including the UK, are relatively small, it is undoubtedly a global company with big ambitions, which has been radically transformed in the past four years since it was borne out of the merger of South African Breweries and Miller Brewing, bringing the business much-needed scale in a sector rife with consolidation.
In 2003, it acquired Italian beer brand Peroni, last year it purchased South America's second-biggest brewer, Bavaria, and earlier this month it made a smaller, though in some ways no less interesting, acquisition, buying US beer brand Steel Reserve and caffeinated alcoholic malt beverage brand Sparks.
Fell replaces Mark Sherrington, who joined SABMiller in July 2002, and was given the task of re-engineering its marketing department following its takeover of Miller. He resigned last December without a job to go to, but agreed to stay on until a replacement was found.
The recruitment of Fell is based in large part on his impressive international experience. Before joining Cadbury Schweppes, he had spent 15 years at drinks group Diageo in a variety of roles, including global brands director for Johnnie Walker and global marketing director for Guinness.
While Sherrington was brought in to build the group's marketing function, through premium brand directors, for instance, Fell will take the implementation of its international marketing to the next stage. He will oversee the global roll-out of positioning communications for its premium brands as well as being responsible for innovation and bedding-in best practice across the business.
There are potential obstacles to his success. 'The biggest challenge it (SABMiller) has is getting distribution on an international scale,' says Canadean alcoholic drinks sector analyst Kevin Baker. 'It has some powerful brands such as Peroni and Pilsner Urquell, but while Pilsner Urquell would be a crown jewel in any portfolio, it just does not have the distribution in the big markets.'
A Merrill Lynch briefing note on SABMiller, published on 12 July, rates the company as a stock to buy, but sounds several notes of caution.
'With between 70% and 80% exposure to emerging markets (South Africa, Africa, Central and Eastern Europe, Russia, China, Latin America), SABMiller does present more risk than its brewing peers, and its share price can be expected to be more volatile,' the document reads. 'Our investment case is based on our belief that a strong management team would be able to unlock value longer term, with short-term share price volatility presenting particular buying opportunities.'
Credit Suisse First Boston analyst Michael Bleakley argues that the 'marketing expertise' SABMiller has shown in building local brands in markets such as Central Europe and Africa should be applied to 'reigniting growth' in the US.
'It has the opportunity to drive premium brand growth harder and improve the proportion of its business from premium brands,' he says.
In the UK, SABMiller's four main beer brands account for less than 1% of the market by volume. To address this, a year ago it created Miller Brands UK and put in place a £30m promotional budget to raise the profile of its premium lagers. At the same time, it appointed Jean-Pierre van Lin, formerly managing director UK and Ireland for Miller Brewing International, to the top UK marketing role.
A greater UK market share is undoubtedly desirable, but it is not something the company is prepared to secure at any price. The company is aiming to maintain its brands' premium status and margins, and avoid being sucked into the supermarket-driven price-led promotions that have diluted the supposed exclusivity of other 'premium' beer brands.
To this end, Peroni's current 'La Dolce Vita' campaign, created by ad agency The Bank, draws on the famous Italian arthouse film of the same name. It associates the lager strongly with Italian style to underline its premium positioning and elevate it beyond the run-of-the-mill beer category. At present, Peroni draft sales are growing quicker than sales of its bottles.
'Gaining share is not necessarily our primary goal at the moment,' says SABMiller head of media relations Nigel Fairbrass. 'What we are trying to do, especially with Peroni, is grow it at an appropriate rate. We don't want to distribute it in supermarkets; we would rather see it in top-end style-bars and really establish brand equity. Anyone can get volume in the UK by discounting.'
SABMiller also has some interesting non-beer brands, such as Brutal Fruit in South Africa, but it claims its innovation focus will remain on beer. Marketing attention will remain concentrated on Peroni, Pilsner Urquell and Miller Genuine Draft and, to a lesser extent, Castle.
Now it is up to Fell to ensure that that innovation is translated into international success.
DATA FILE - SABMILLER
1895: South African Breweries (SAB) founded; Castle Lager launched.
1999: Primary stock market listing moved to London, and controlling interest in Pilsner Urquell acquired.
2002: SABMiller is formed following SAB's $5.6bn purchase of MillerBrewing Company, the second-biggest brewery in the US by volume.
2003: Company buys majority interest in Italian brewer Birra Peroni.
2005: Acquires majority stake in Bavaria, South America's second-biggest brewer, in a share swap valued at £4.5bn.
2006: Posts $15.3bn (£8.3bn) revenue for year to 31 March, a rise of 19%.
2006: Buys US brands Sparks and Steel Reserve for $215m (£117m).
This article was first published on Marketing