That doesn’t mean that there isn’t trouble fermenting on the hops horizon. Over the past decade, the drink’s traditional core demographic of young male imbibers has been migrating more toward hard liquor and wine, losing some of its fizz as the number one social lubricant. It’s not uncommon these days to find a guy pontificating on a cabernet sauvignon’s bouquet at a wine tasting or sipping a double soy latte at the local coffeehouse with his buds, rather than stereotypically sloshing around a keg in someone’s basement playing beer pong and quarters.
But beer hasn’t necessarily gone the way of the McKenzie brothers, either—which is why brewing giant Anheuser-Busch has gone back to the brand drawing board, implementing a comprehensive strategy to simultaneously expand its beer portfolio while focusing advertising efforts on its core brands, as well as reinstate beer back to its position as the life of the party.
The Missouri-based Anheuser-Busch (also known in the industry as “A-B”) is the largest brewing company in the US and is perhaps best known for its
signature Budweiser, Bud Light, and Michelob brands. Also on the roster are a bunch of familiar imports (including Bass, Grolsch, Stella Artois, and Beck’s), specialty beers (Rolling Rock), regional beers, the Busch family, and specialty malt beverages like Bacardi Silver line and Tequiza.
Sticking with its tried-and-true brands (Bud and Bud Light are the world’s two top-selling brews) and letting the monetary tap flow into the usual advertising efforts (e.g., Super Bowl TV spots) would appear to be an enduring strategy. But then this macho carbonated salve started veering into the high-falutin’ zone: With craft beers and microbrews gaining in popularity over the past decade, A-B starting bulking up its brand portfolio in an attempt to lure drinkers of all persuasions into its Clydesdale stable. This concentration on creating something for everyone may have attracted new constituents, but it also has come at the expense of the company’s core brands.
On the heels of a “disappointing” showing in 2007 (nearly flat sales volume for the three main brands, despite overall profits that were up 12 percent in the fourth quarter), the company recently unveiled its 2008 strategy for Budweiser, Bud Light, and Michelob, which includes much-needed image revamps for each, and funneling money previously earmarked for some of the smaller brands back into these three mainstays. What, exactly, does “more money” entail? We’re looking at US$ 70 million more this year on ads for Bud Light and Budweiser (especially TV advertising), with an additional US$ 30 million siphoned into Michelob.
Budweiser, the self-proclaimed “King of Beers,” has been fighting its perception of beer-gut propagator, waging an uphill battle against not only its own parent company’s lower-calorie versions (e.g., Bud Light and Michelob Ultra), but also those of its competitors (most notably, Coors Light, owned by the Molson Coors Brewing Company). Toward that end, A-B has repositioned Bud as “The Great American Lager,” focusing more on the brand’s taste, anaerobic respiration (brewing process), and status as an American icon.
Bud Light, on the other hand, the company’s top seller, will focus on “drinkability,” while Michelob is being placed strategically into the “craft” family of A-B beers (complete with the tagline “crafting a better beer”), detailing the beer’s ingredients (just in case you were curious about the malted barley/yeast ratio) and the TLC infused into every bottle.
Then there’s A-B’s increased focus on the Latino market. Ever hear of a “red beer”? Take your favorite ale or lager, mix it with tomato juice, and voila.
Residents south of the border have been drinking this sanguine concoction for years, and that’s what Anheuser-Busch is banking on with its Bud Chelada and Bud Light Chelada products, a combo of one of the aforementioned beers and Clamato cocktail juice. The company plans to supplement this brand extension with an increase in advertising spending by 25 percent in 2008 in Spanish-speaking media, including radio, billboards, and popular TV outlets such as Univision and Telemundo.
Raise Your Steins...
While Anheuser-Busch certainly wants to continue to saturate the masses with its brands (and they’ve certainly outlaid plenty of dough and marketing brainpower to do so: Who doesn’t remember the famous “Wazzzzup” commercials, the Bud Bowl, or those tongue-in-cheek “Real Men of Genius” radio spots?), the company also is intent on elevating the entire segment as a whole, both through traditional advertising methods and by branching out into new media.
A-B’s Here’s to Beer campaign, launched in February 2006, is designed to cajole consumers to put down their whiskey tumblers and grab the nearest pewter tankard topped off with stout. The campaign’s purpose (conducted with nary an Anheuser-Busch logo in sight) is to reinforce the social aspect of beer drinking, show off the brewing process and ingredients, and paint a more refined picture of the brewskie. Part of that latter ambition for 2008 is Beer School, which invites consumers to enroll in its “beer connoisseur” program, educating them on the brewing process, types of beers, and food pairings.
On the site you’ll find featured videos (at press time, I was able to enjoy “From Barley to Bar,” a fun foray into “the journey of beer,” which follows all the steps necessary to fashion a perfect pint). Click on the “Who Would You Have a Beer With?” icon, where you’ll kick back with a virtual companion from the past and throw back a glass of your favorite A-B beverage (current drinking buddies include Confucius, Genghis Khan, and Ben Franklin). Send “eCheers” to your friends or the cutie in accounting (pick a beer, compose an email message, and hit send). There’s even a link to beer events and festivals at beeradvocate.com, “pub fiction,” and a virtual art gallery called “Thirsty Artist.”
This campaign is just one facet of A-B’s attempt to establish a strong online presence. Unfortunately, A-B’s Bud.TV, a Web entertainment network filled with themed channels of original online content (including comedy, sports, and reality news and videos) has not met management’s original expectations. Faced with age-verification problems and registration roadblocks (I was not even able to register to get on the site because the database they employ could not “verify” me), A-B has indicated that the content on Bud.TV may soon be moved to other A-B sites while the powers that be rethink their foray into digital branding and “evolve” Bud.TV down the road.
The company’s dalliance with social networking site MingleNow recently met a similar fate. Clink was an A-B interface where users could sign on and post photos of themselves toasting with beer. However, as of January 2007, it was closing time for MingleNow (log onto the site and it simply says “Thank you—we’re closed”). Other social sites like MySpace and Facebook had originally been considered for hosting duties, but they didn’t claim the same drinking-age demographic that MingleNow boasted, leaving Clink’s future fate unclear.
On the upside, despite its new-media woes, A-B increased US shipments to wholesalers 104.4 million barrels in 2007, up 2 percent from 2006, according to a recent company release—a fact the company attributes to its broadened beer portfolio and focus on marketing its core beer brands. It’s hard to say, though, if people are flocking back to beer due to A-B’s branding efforts or simply because they’re parched for pilsner.
If it is indeed a direct result of their efforts, it’s a strategy Anheuser-Busch should leave on tap if it wants to keep competitors over a barrel.