Budweiser, the self-proclaimed King of Beers, is giving away free samples Sept 29th to drive brand familiarity and brand awareness in a fruitless attempt at slowing their rapidly shrinking market share.* Budweiser’s market share fell 9% in 2009 and has already fallen 9% so far this year. This contrasts strongly with craft beer (aka micro-brew) sales which are up 9% by volume and 12% by retail dollars in 2010 after growing 7.2% in volume and 10.3% dollars in 2009.**
This contrast between the trend-lines for Budweiser and craft beers couldn’t be starker. But at least Budweiser has company – light beer and import sales are shrinking too, as are overall beer sales, although not by as much. See my previous post for more on this topic: Light Beer sales are down! I’m Shocked! . The gains in both market share and in revenue for craft beer are really remarkable especially if you consider that they’ve grown market share for a premium-priced product during a recession.
I find it interesting that Budweiser sees the problem that they are having, as one caused by a marketing deficiency given how much they spend on marketing already, and not a problem with their product. This is a fundamental misdiagnosis of the problem, but an understandable one when you consider the fact that beer drinkers have lost loyalty to Bud every year for the past seven years, according to research firm Brand Keys. Bud’s ranking among national product brands slipped from 16th in 2003 to 220th in 2010.
Of course the real issue is that increasingly people are choosing which brands of beer to drink based on flavor, marketing and price instead of being influenced by marketing and price alone. This trend doesn’t bode well for Budweiser, a beer known more for its Clydesdales than for the results of its “beechwood aging”. To support this free sample campaign, Budweiser has trademarked the slogan and tagline - “Grab some Buds”. Which highlights the painful truth that the days of Budweiser’s marketing team coming up with a catchy and compelling slogan are long gone.
Compare and contrast these two ads. The first ad is from when Budweiser really was the “King of Beers” and the second is a more recent Budweiser effort from the 2010 Super Bowl.
Despite the fact that both commercials feature the iconic Budweiser Clydesdales, the differences between the two couldn’t be bigger. One reaffirms and reinforces the message that Budweiser is the best beer available, “the King of Beers” and “when you’ve said Budweiser you’ve said it all” (whatever that means) and it does this with catchy music in only 40 seconds. The other commercial shows a young Longhorn steer and Clydesdale colt with woodwind instrumental music playing in the background for the first 30 seconds before segueing into the iconic Clydesdales closing with a tagline of “nothing comes between friends”. It’s not until a full 40 seconds into the ad that the music switches from mellow woodwinds to rousing brass instrumentation building to the inevitable and obvious denouement.
The second ad also highlights an interesting choice of casting given Bud’s concerns about appealing to the supposedly key 21-34 demographic. The tagline in the ad is “nothing comes between friends” yet the actors look more like a father and son than two buddies hanging out. Budweiser seems to be lurching from campaign slogan to campaign slogan as they try to correct their sales issues, some of which might be traceable to Anheuser-Busch merger with In-Bev in 2008. Prior to the merger Anheuser-Busch was proudly and loudly an American company producing an “American” style beer. And yes, I know that lager beer is European, and not American, but Budweiser always emphasized it was an American beer and its style of lager is after all ‘unique’.
The decline in sales affecting American-style lagers like Budweiser and Bud Light isn’t universal. Some formally passe brands like Pabst Blue Ribbon are experiencing a huge renaissance, so much so that ‘PBR in a can’ can now be found at finer drinking establishments across the land, or at least in the hipper ones.
Even regional brands like Rhode Island based Narragansett Brewing have been brought back from the dead. Narragansett was the brand known for its friendly tagline “Hi-Neighbor, Have a ‘Gansett” from when it was the official beer of the Boston Red Sox. Narragansett’s marketing coup to get noticed was to begin selling their beer in 16oz cans, aka Tall-boys, proudly featuring the slogan “Made on Honor, Sold on Merit” above and below the name.
Leaving aside the marketing and taste of Budweiser, Anheuser-Busch’s strength, now AB-InBev’s, has always been its robust distribution network and its stellar engineering. These two strengths allow Anheuser-Busch to produce a perfectly consistent product with no variations regardless of which of its 12 breweries make a particular bottle, can or keg of Budweiser; and then once that product is produced, to get it into the hands of consumers – whether in the liquor or grocery store, bar or even on airline beverage carts.
These two strengths will continue to serve Budweiser very well for the foreseeable future and serve to buttress their sales numbers for years, and probably decades, to come. This is because most craft brewers have a difficult time getting their product into consumers hands, although it’s easier than it used to be due to changes in state and local liquor laws. Those changes along with the increased information availability that has come with the Web and Social Media have really begun to change the beer landscape for the consumer. Social media makes it easier for new and smaller micro-brewers to get their products onto shelves and into consumer’s hands, although it won’t ever be termed easy. But just because it’s easier, don’t expect craft beers to outsell Budweiser any time soon. The sales of biggest craft brewer, Boston Brewing Company, the maker of Sam Adams, are still minuscule when compared to Budweiser, although in the Northeast most bars will have at least one Sam Adams product on tap.
Personally, I think Budweiser’s strategy of getting people to taste their beer will backfire and their sales declines will only accelerate because frankly Budweiser doesn’t taste very good and now that it is part of the stable of brands owned by the international beer conglomerate AB-InBev, it can’t claim to be the “Great American Lager.” Could I be wrong? Absolutely, who knows maybe Budweiser will be the next ‘PBR in a can’ or the new retro beer of choice among the trend-setter cognoscenti. Regardless, your thoughts and opinions about this topic, or any other, are always welcome. -t