The narrative in Beer Wars focuses on craft brewers’ fight for retail shelf space. It’s a battle any upstart brand understands and, in the consolidated retail landscape of today, must overcome to be successful. In the beer business, the gatekeepers are the beer distributors, who have longstanding relationships with the major beer companies.
Beer Wars explains this distribution system and offers a lengthy digression involving a trip to Washington, DC, for an inside look at lobbying. Big brewers hold parties to ingratiate themselves with members of Congress and other Washington insiders—for the sole purpose of protecting the so-called three-tier distribution system. (A system where brewers make the beer, wholesalers distribute it, retailers sell it and none of the three can do one of the other two things at the same time.) Beer Wars argues this favors the powerful big brands that can command retail shelf space at will and therefore take advantage of the “billboard effect.”
The film’s director is Anat Baron, a former general manager of Mike’s Hard Lemonade, a brand that itself struggled to get shelf space and grow share after its launch in 1999.
Beyond the conspiratorial lobs thrown at big beer brands and nasty insults about the watered-down taste of mass market beers, there is a moment in the film that poignantly addresses what could be a time bomb for major beer brands: the problem of commoditization. The scene takes place in a nondescript bar that could be in any city in America. The film’s moderator is conducting an admittedly unscientific taste test of sorts. Paper bags are placed over three beers—Bud Light, Miller Lite and Coors Lite—as the beer drinkers confidently proclaim allegiance to a particular brand (as in “I’m a Bud man”).
All three beer drinkers fail to pick their supposed favorite beer, proving that the taste testers are susceptible to marketing and packaging (although it’s hard to discern how many other unscientific taste tests ended up on the editing room floor). If we believe it took only one take to find three beer drinkers who really didn’t know what they were drinking, one can only conclude this: All is not well in mass-market beer land.
Despite dominating the beer category with a 78 percent market share, the three major beer brands in the US—Budweiser, Miller and Coors—are arguably suffering from a dangerous brew of sameness and commoditization.
Is that what explains such lackluster beer sales, essentially flat in 2008? It’s still an enormous category, with total sales of US$ 101 billion last year on 210 million barrels of beer. But could the big brands now be paying a price for all this uniformity in taste and mass-market dominance?
The beer category’s only hot spot for growth is in the craft beer category, which grew by 5.9 percent in 2008, according to the American Brewers Association. Meanwhile, sales of imports declined 3.4 percent and non-craft domestics (a category that includes the likes of Bud and Coors) were essentially flat, at 0.6 percent growth. (The ABA defines a craft brewer as small, independent and traditional, with annual production of less than 2 million barrels annually.) Nevertheless, the top three brewing companies in the US—Anheuser-Busch InBev, Miller Coors Brewing Co. and Pabst Brewing Co.—remain firmly on top of any list of annual sales.