The Rheingold Brewing Company

130 W. 42nd Street
New York, New York 10036
USA
Telephone: (212) 481-1018
Fax: (212) 481-0233
Web site: www.rheingoldbeer.com

RHEINGOLD BEER CAMPAIGN

OVERVIEW

Rheingold beer, originally produced by the Liebman Brewery of Brooklyn, New York, had enjoyed a several-decades' stint at the top of New York City's beer market in the middle of the twentieth century. It had also earned a place in the minds and hearts of multiple generations of New Yorkers, thanks to ubiquitous advertising slogans and jingles and to the "Miss Rheingold" competition, an enormously popular, citywide beauty pageant staged in the 1950s and 1960s. The rise of national brewing powerhouses Anheuser-Busch, Miller, and Coors, however, pushed countless local brands, including Rheingold, out of business in the late 1960s and 1970s. After more than two decades of dormancy, Rheingold was brought back to the New York market by a group of investors, and the new enterprise was called the Rheingold Brewing Company. Initial attempts to reintroduce the beer in the late 1990s were unsuccessful, but in 2002–2003 the branding agency Powell of New York unveiled a guerilla campaign that was intended to make Rheingold the beer of choice among denizens of the city's hippest neighborhoods.

Limited by a campaign budget of $400,000, Powell had no choice but to eschew traditional strategies of mass-media messaging, but its target group of authenticity-craving hipsters was notoriously resistant to such marketing tactics anyway. The Rheingold beer campaign instead chose 15 key bars in select New York neighborhoods to serve as staging grounds for the brand's rejuvenation. A series of promotional events, including an updated version of the "Miss Rheingold" pageant, supported the word-of-mouth buzz created by cryptic billboard placements, a sales force drawn from the hipster target market, and other untraditional means of spreading awareness.

The campaign ran through the end of 2003 and was considered an enormous success. Rheingold, initially available in only seven New York City bars, spread to 2,000 locations within a year. The campaign won two Gold EFFIE Awards in 2004. Rheingold and Powell continued to seek out untraditional means of winning back its place at the top of the New York beer market.

HISTORICAL CONTEXT

The Rheingold brand was introduced in 1883 by Joseph, Henry, and Charles Liebman, whose father, Samuel, a German immigrant, had successfully established the Liebman Brewery in Brooklyn, New York, a generation earlier. Prior to the outbreak of World War I more than 700,000 barrels of Rheingold were being produced annually, but the company's success was hindered by the anti-German prejudice surrounding the war effort as well as by the onset of Prohibition in 1920. After surviving Prohibition by producing nonalcoholic products, including "near beer," Rheingold enjoyed monumental success in its primary market of New York City during the subsequent decades. For nearly 30 years, beginning in the mid-1930s, Rheingold was New York's best-selling beer, and the brand's advertising slogan ("Rheingold Extra Dry") and radio jingle ("Rheingold, the dry beer—think of Rheingold whenever you buy beer") became midcentury cultural touchstones for millions in the city. Additionally, the "Miss Rheingold" beauty pageant, whose winner was selected by bar patrons citywide each year, was an enormously popular local event. At its peak in the 1950s and early 1960s, the promotional contest was decided by more than 20 million ballots, a number almost equal to the turnout of U.S. presidential elections of the time.

In the mid-1960s, however, Rheingold's fortunes declined along with those of other local beer brands across the United States, who could not compete with emerging megabreweries such as Anheuser-Busch, Miller, and Coors. The Liebman brewery was shuttered, and the Rheingold brand seemed to have become part of history by the late 1970s. In the late 1990s, however, a team of investors enlisted a member of the Liebman family and embarked on a plan to reestablish the Rheingold brand. An initial strategy of targeting suburban grocery stores, traditional area restaurants, and sports fans did not effectively rejuvenate the Rheingold brand. During this time, though, a surprising beer-drinking trend emerged, particularly in urban centers across the country: so-called sub-premium brands such as Pabst Blue Ribbon and Miller High Life were being reclaimed by 20-something hipsters, as were other nearly defunct local brands similar to Rheingold. Rheingold executives decided on a change of course for the brand's relaunch.

TARGET MARKET

Powell's Rheingold Beer campaign centered on a particular group of New Yorkers that the agency identified as "downtown culture drivers," residents of Manhattan's Lower East Side and East Village as well as of Williamsburg, Brooklyn. These neighborhoods harbored a high concentration of the city's most self-consciously hip, creative young people, "young Lou Reeds and Patty Smiths," as Powell phrased it, whose tastes frequently defined tastes throughout the city and, by extension, in large portions of the United States. Not coincidentally, this audience was roughly the same age as the overall beer industry's prime target market, 21- to 27-year-olds, who consumed far more beer per capita than other Americans. Rheingold's downtown target drank more than a quarter of New York's beer and tended to stay out later than other residents of the city.

These consumers favored presumably authentic and simple brands like Levi's jeans, Marlboro cigarettes, and Converse shoes, and Powell observed that they had rejected high-end microbrews, which had been extremely popular in the 1990s, as part of a larger rejection of "all things fancy and pretentious." In the beer world this attitude had translated into a return to such nationally distributed beers as Pabst Blue Ribbon and Miller High Life, but Rheingold and Powell saw that their target market might be susceptible—especially in the climate of affection for the city following the terrorist attacks of September 11, 2001—to a New York beer that measured up to the approved standards of simplicity and authenticity.

Rheingold thus attempted to position itself as "100% New York by Volume," a "macro-brew" that shared the city's "bold, dirty, electric, up-till-dawn, bad-ass independent" spirit. It could not, however, communicate this message using traditional advertising tactics, for two reasons: its target was notoriously skeptical of all overt marketing appeals, and the minimal campaign budget would not allow for such an approach. Powell accordingly crafted a guerilla-marketing effort that depended largely on word-of-mouth buzz and the participation of owners of neighborhood bars.

HE WENT THAT WAY

Among the many unpredictable ideas developed by advertising agency Powell of New York for the Rheingold beer campaign was a strange flier that began appearing on lampposts in the city during the summer of 2003. The flier, printed on fuchsia paper and lettered in black marker, said, "Help! Have you seen this beer?" and offered an extremely specific description of the Rheingold that had been "lost." A working Manhattan phone number was provided as a contact. When staff members of the magazine Adweek called the number, they got an answering machine. The voice on the recording was that of a desperate woman who was not home because she was looking for her Rheingold.

The woman was, in reality, a marketing director from Powell, Sarah Riddler, and she told Adweek that the flier generated upward of 130 phone calls within a week. Among the responses were calls informing Riddler that her Rheingold had been seen fleeing by bus and others claiming that they were holding the beer for ransom.

COMPETITION

Miller High Life was, during this time, one of the national brands that had experienced a revival partly driven by consumers similar to those Rheingold was targeting. Beginning in 1998 Miller unveiled the first national TV campaign on behalf of High Life since the mid-1980s. The campaign both celebrated and poked fun at retro notions of manhood by defining the "High Life man" as someone who solemnly trusted the power of duct tape, ate hamburgers topped with hunks of butter, and scorned neighbors who could not effectively handle their motorized vehicles. The commercials' combination of nostalgia and irony allowed them to appeal not only to High Life's traditional market of older, blue-collar males but also to its newly minted hipster consumer base, who presumably prized the aura of authenticity conjured by the brand and its emphasis on old-school values. The TV campaign won numerous awards and ran for many years.

Pabst Blue Ribbon, similarly, had long been considered an affordable workingman's beer. In the 1990s, though, the brew's marketers noticed a spike in sales in the Portland, Oregon, area. The Pabst Blue Ribbon team found that the beer had been adopted among the city's bicycle-messenger subculture and that the brand's authentic image was fueling word-of-mouth buzz among young, hip drinkers. Believing that such an audience might be alienated from the brand by a traditional marketing approach, Pabst hired on-the-ground marketers, who traveled to several U.S. cities in order to stoke further interest in Pabst Blue Ribbon simply through conversation. These representatives not only spoke to wholesalers and bar owners but also frequented the gathering places of its target consumers, such as tattoo shops, local music clubs, and bike-messenger races, dropping off cases of Pabst Blue Ribbon and talking to those present. Print ads, which were carefully calibrated not to offend the Pabst Blue Ribbon target's antimarketing sensibility, ran in music magazines and alternative publications.

There was no single leading candidate for the title of New York's favorite beer, a designation that summed up Rheingold's long-term goal beyond its relaunch. The sheer number of retail outlets and bars made for enormous fragmentation of the beer market, and the United States' leading beers—Bud Light, Budweiser, Miller Light, and Coors Light—had less traction among the city's fickle consumers than among America's beer drinkers at large. Local brands, such as those produced by the Brooklyn Brewery, founded in the mid-1980s, had identified themselves as quintessentially New York beers, but Brooklyn Brewery and its local competitors were upscale microbrews with limited marketing resources.

MARKETING STRATEGY

Rheingold and its investors charged Powell, a boutique agency, with the tasks of creating instant sales results and building long-term brand equity, all on a miniscule budget of $400,000. Powell thus focused narrowly on its target of so-called "downtown culture drivers" and selected 15 bars to serve as staging grounds for the brand's revitalization. Rather than hire conventional beer reps to talk the brand up among bar owners, Rheingold and Powell assembled a sales force drawn from its target demographic and trained them to be billboards not just among proprietors but also among customers themselves. The agency signed Rheingold on as a sponsor of the CMJ Music Marathon, an indie-rock festival frequented by large numbers of the target audience, and distributed free Rheingold beer to the press, the bands, and festival attendees.

Rheingold promotional events in the 15 core bars continued to spread word-of-mouth awareness, and Powell bought placements on two billboards at Houston Street and Avenue B, "the gates of the Lower East Side," to run photographs that were in keeping with the brand's desire to associate itself with the mystique of rock music. The grainy black-and-white photographs, which were taken at the CMJ festival, were placed side by side; one showed a rock musician, and the other an audience. No Rheingold logo or any other advertising cues ran with the images. "We wanted to go up 'naked,' with no branding," Powell chief Neil Powell told Adweek, "to sort of tease the images and also just to sort of give the Lower East Side some beautiful pieces of art."

As buzz began to build, Powell brought back the "Miss Rheingold" pageant but updated the spectacle to suit its downtown market's sensibilities. Powell selected the winner from among the bartenders at the 15 drinking establishments that had been so central to the campaign thus far. The winner was photographed, during a shoot at the classic bohemian haunt the Chelsea Hotel, revealing her beauty secret: she was shown lounging in a bathtub filled with Rheingold, empty bottles littering the floor around her. This image appeared on the Houston Street billboard space as promotional events surrounding the pageant began.

Meanwhile, a concurrent Powell strategy of sending cases of Rheingold to various prominent New York organizations and institutions, and even to a pair of squatters on the Lower East Side who had recently made headlines, paid off when a reference to the beer was made on Saturday Night Live. The plug came as a surprise to Rheingold and Powell and was both a boon to the ongoing marketing effort and a measure of how successful it had been.

OUTCOME

Between the end of 2002, when the guerilla campaign began, and the end of 2003, Rheingold's distribution base went from 7 New York City bars to more than 2,000, and the company claimed a one-year sales increase of 2,500 percent The campaign attracted a significant amount of admiring national and international press coverage, was included in a Marketing Concepts class at NYU's Stern School of Business, and won two Gold EFFIE Awards in 2004.

Rheingold and Powell continued to use untraditional methods of communication in the attempt to recapture the title of New York's favorite beer. In 2004 the "Don't Sleep" campaign included paintings by edgy local artists; they were done on the aluminum security nightshades covering storefronts after business hours in Rheingold's target neighborhoods, the first-ever known use of the nightshades as advertising billboards. The guerilla marketers also flirted with the mainstream that year, running TV spots on local stations, but these commercials managed to generate antiestablishment buzz despite their format. In ridiculing facets of contemporary life in New York that interfered with its downtown consumers' lifestyles, such as a newly enacted ban on smoking in bars, Rheingold attracted an immediate critical response from Mayor Michael Bloomberg, who publicly questioned the brewer's authority to speak on behalf of the city.