Profile... SABMiller's Luce plots regional growth strategy

It didn’t take long for Mark Luce, SABMiller’s commercial director for Asia, to accept a posting in Hong Kong. After three years in Latin America, the Londoner was more than ready for a change. “After working in Bogota it took me about five seconds to decide,” he smiles.

So last September Luce moved to SABMiller’s newly formed Asia-Pacific hub, taking on a role that puts him at the forefront of the company’s Asian expansion.

The title ‘hub’ is a tad overambitious for what is a small office occupying half a floor of a Hong Kong high-rise. That, he says, is the point. “There’s a small number of highly skilled, relatively senior people,” he says. “We can draw in best practice from other parts of the group.”

Inside, the company is heavily male-dominated, with talk in the office kitchen revolving around rugby and Formula One, and the corporate hospitality that may or may not go with them. In that respect at least, it is like a beer company in any other part of the world. As Luce points out with a smile: “If you can’t have fun in the beer industry you shouldn’t be in it.”

The company’s small Asian operations are at least a step up from the previous model, which saw the region handled out of Johannesburg. It’s a reflection of Asia’s late start as a major player on the beer scene. And as Luce points out, despite the growth of global brands and global holding groups, beer remains a fundamentally local industry driven by local tastes; even global giants are still feeling their way in this part of the world.

The company’s crown jewel in the region is undoubtedly Snow, the biggest beer brand by volume in China, which is now the world’s biggest beer market. That is operated under a joint venture with China Resources. It also has operations in Vietnam, Australia (another JV) and India.

He uses India as an example of the opportunity in Asia - currently beer consumption is a litre per person per year; the average beer marketer drinks more in a weekday night out. “In developing markets there is a correlation between per capita consumption and growing GDP. In developed markets there is a point that this stops; consumers drink less but drink better.”

Accordingly, Luce’s role is to identify where SABMiller can enter mature markets with high profit potential, such as Japan, and the Philippines where there is a chance to grow volumes. He is also there to bring a degree of global best practice to what is still a decentralised company. SABMiller operates a number of global brands - Peroni, Grolsch, Miller, Pilsner Urquell - but generally it operates local brands in local markets. It favours what Luce calls a “portfolio strategy” - matching a local brands to a consumer positioning (‘men together’ or ‘end-of-day reward’, for example), which can be used to drive marketing activity. “What we bring to our businesses is a marketing framework,” he says.

Luce is an old hand at this sort of thing. He fell into marketing “by accident” while studying economics, and started out at Unilever where he took on the first of several international roles. Despite his globe-trotting job, however, he still has a wife and family in the UK. “Our lives revolve around hotels and planes,” he says. “The kids think they’re on a permanent holiday, paid for by me.”
One question he will face is where to go next with Snow. The company’s strategy, he says, was “to build the first truly national brand” in the Chinese beer market, tapping into the aspirations of lower and middle-class Chinese consumers. The question it now faces, he says, is where to take it next. Could it go overseas like rival

Tsingtao? “We think there is potential for Snow outside China, but it’s a matter of how to parcel it to the outside world,” he says. “We would have to develop a compelling proposition. When we sell Peroni we don’t sell Italy. We sell Italian culture and style.”

Then there is how to react to the maturing of beer tastes in parts of China. In cities such as Beijing and Shanghai, there may be opportunities for SABMiller’s global brands. “But in Northeast China, where there is a history of beer, there may be an opportunity for a Chinese premium beer.”

These sorts of questions are what attracted him into the role in the first place. SABMiller, despite its size, remains a decentralised company, nowhere more so than Asia. For Luce, that means he now has what he needs: “the degree of responsibility to make a difference”.

Mark Luce’s CV
2008 Commercial director, Asia
2005 Senior VP, Latin America
2003 Global brands director, SABMiller
2000 MD, Pilsner Urquell International
1997 European marketing director, SABMiller
1994 Marketing director (Venezuela, Colombia, Argentina), British American Tobacco
1985 Brand director rising to marketing director, Fosters Brewing
1984 Marketing executive, Middle East, Rothmans International
1980 Brand manager, Unilever