Anheiser-Busch sales are down, solution: Make better beer? No, step up marketing!

[drac0]

Crazy..

Anheiser-Busch sales are down, solution: Make better beer? No, step up marketing!

http://www.salon.com/technology/how_the_world_works/2010/06/29/downfall_of_the_beer_lords/index.html

 

[HokieBrewer]

Improved marketing is quicker, cheaper, and easier to implement. It'd be the first route I'd go too.

 

[smizak]

You could say they tried to improve quality with American Ale, but for a dollar more you could buy Sierra Nevada. Done deal in my book.

I'm always surprised with the philosophy of competition between craft beer and mega-lagers, on both sides. IMO, it's like Volkswagen trying to compete with Harley Davidson. Sure, they're both vehicles, but completely different demographics and attitudes.

 

[Bret86944]

If you are drinking bud light do you care about quality?

 

[IrregularPulse]

If you are drinking bud light do you care about quality?

Kind of my thought. The people they sell to aren't looking for good tasting beer. They want to think that their Bros area drinking it too, or that bikini women like them better when drinking it over Miller.

The beer is what it is and won't change, they just need to appeal to the changing generation coming into that craptastic stuff.

 

[smizak]

If you are drinking bud light do you care about quality?

That's kinda my point.

Conversely, I love craft beers, classic styles, imported beers and trying to brew them. What the hell can Budweiser ever do to make me drink their product? No amount of T and A or funny situational comedy in their commercials is ever going to make me buy it. I guess, I'm always a little surprised when craft beer people feel so threatened by the giant mega brewers.

 

[Homercidal]

Marketing is a proven method for increasing sales. If done right, not only will you pay for the marketing costs and then some. it doesn't always work, but it's usually one of the first things a company should do to drum up more business.

The problem is that Micro sales are rising quickly. BMC's marketing plan will not get those drinkers back, but the one with the best marketing will potentially steal some customers from the other Macros. SO if all of the Macros are spending more on marketing, some of them are going to lose, and some "may" be better off.

But the bottom line is that we are witnessing a Renaissance of beer. Tastes are changing, just as they were when refrigeration became common and people discovered the enjoyed the taste of Cold, Light Watery beer (amongst other reasons). Just as when porters became all the rage in England years back.

Today tastes change quickly, and I predict we will see a lot of flavor change over the next couple of decades as brewers try new things, and people try new things. Sour beers are just now starting to catch on, when Hops bombs were the big thing only a few years ago.

As more micro brews reach party store shelves, people will seek them out more and more. And thus, the giants will diminish. Until the next prohibition.

 

[weirdboy]

I think the more likely thing we will see is the macros buying up micros like crazy in an attempt to recapture that part of the market.

 

[smizak]

Until the next prohibition.

Scary.

Jay Brooks from the Brookston Beer Bulletin is big into making people aware of the neo-prohibition movement.

 

[Homercidal]

I think the more likely thing we will see is the macros buying up micros like crazy in an attempt to recapture that part of the market.

That's been going on, but so far the result has been that it has exposed more people to micro beers, as they have become more prominent on the store shelves. This may eventually equate to more sales for the macros, but it might also make some people more aware of micro brewing's little guy image, and they may be turned off by the by buying up of the independents. (Or that may be my own perspective).

I mean, I like Michelob's craft beers, mostly, but I would not purchase them over Bells, Founders, SN, Goose Island, etc.

 

[humann_brewing]

their end goal is to make as much money as possible that means cutting corners to save a buck. They are not going to change their product or re-invent the wheel, they will just make more promises to people that might believe them.

 

[arturo7]

it's like Volkswagen trying to compete with Harley Davidson. Sure, they're both vehicles, but completely different demographics and attitudes.

I thought Bud and Harley went hand in hand.

 

[arturo7]

Seems to me the former shareholders of AB saw the writing on the wall and cashed out before the fall.

 

[smizak]

I guess one way of thinking about it is: Has anybody in the history of beer gone from drinking craft beer to exclusively drinking fizzy, yellow macro-lagers? Unless they had too?

 

[JJL]

I think the more likely thing we will see is the macros buying up micros like crazy in an attempt to recapture that part of the market.

You'll probably see some of this, but I still think this is a ways off. I think I remember reading somewhere that currently that the combined sales of all craft breweries is still under 10% of the market. BBC is the largest of that crowd, and they have less than 1% market share. I do think you might see more partnerships of sorts with regional breweries though. For instance Leinenkugels has some sort of deal with MillerCoors. Leinenkugels gets to use MillerCoors distribution channels, and MillerCoors gets to use Leinenkugels for small scale brewing I think.

This will probably become more common over time. Think what you want about the BMC product, but they have a huge distribution network. I have to think that any regional brewery would want to take advantage of that. In return, the regional brewery makes smaller specialty beers for BMC.

 

[HokieBrewer]

I guess one way of thinking about it is: Has anybody in the history of beer gone from drinking craft beer to exclusively drinking fizzy, yellow macro-lagers? Unless they had too?

I spent too much time on BeerAdvocate one week and seriously considered it due to the attitudes there.

 

[david_42]

That's kinda my point.
... I guess, I'm always a little surprised when craft beer people feel so threatened by the giant mega brewers.

When the megas control the distribution channels, the fear is justified. Distributors can force bars to drop craft taps any time they want.

 

[Laughing_Gnome_Invisible]

In the ten years that I have been in the US, I have not seen any change in America's attitude towards beer. I have only seen a change regarding available cash.

Off topic, I wonder if Obama has tried his Hob Goblin yet?

 

[billvon]

If you are drinking bud light do you care about quality?

Well, Bud/Bud Light are arguably some of the highest quality beers out there. Ask any commercial brewer; AB-Inbev's quality control is second to none. (Doesn't imply anything about taste, of course - just that they can make exactly the same beer, exactly the same way every time.)

 

[smizak]

When the megas control the distribution channels, the fear is justified. Distributors can force bars to drop craft taps any time they want.

That's true in most places. Stone has taken over and controls their own distribution, as well as other micros, which is neat. In places like NY, they could do that. Still, in my case anyway, I would not buy those beers. I would brew more of my own.

 

[Laughing_Gnome_Invisible]

Well, Bud/Bud Light are arguably some of the highest quality beers out there. Ask any commercial brewer; AB-Inbev's quality control is second to none. (Doesn't imply anything about taste, of course - just that they can make exactly the same beer, exactly the same way every time.)

Being consistent has nothing to do with quality. It just means that you can brew the beer to the same standard over and over again.

While nobody would want to drink a pilsner warm, it is worthwhile to do it for research. If it tastes like crap when it's warmer, then drinking it cold is just hiding the flavour. Sure, cooling it "improves" it. That is the style, after all. However, even at warmer temps it should still be recognizable as a good beer.

 

[wscott823]

...Let the mighty fall, and let a thousand local microbrews take their place. Our tastebuds will thank us...

best line of the OPs article.

 

[MeatyPortion]

After reading Ambitious Brew I think that this will be a minor blip for the BMCs; they've faced worse situations before and now they have far more assets than ever.

 

[billvon]

Being consistent has nothing to do with quality. It just means that you can brew the beer to the same standard over and over again.

Which is the definition of quality in a commercial setting. The quality control department in your typical company does not try to redesign products to make them better, or stronger tasting, or anything. It just ensures that you can duplicate that product as accurately as possible over the course of production. Their goal is the minimization of defects, where defects are defined as deviations from the product's specifications - not an increase of taste, functionality or usability (depending on the product.)

Compare Lost Abbey to AB-Inbev. Tomme has made some truly amazing beers, but every year they are completely different. Some years Angel's Share is carbonated; some years there's not a trace of carbonation to be seen. Some years Veritas is smooth and drinkable; sometimes it's so sour that it has to be sipped very slowly.

On that scale, AB-Inbev has a much higher quality product than Lost Abbey does. That is not to say, of course, that the AB-Inbev beer is better; indeed, they suck compared to the Lost Abbey/Pizza Port beers.

While nobody would want to drink a pilsner warm, it is worthwhile to do it for research. If it tastes like crap when it's warmer, then drinking it cold is just hiding the flavour. Sure, cooling it "improves" it. That is the style, after all. However, even at warmer temps it should still be recognizable as a good beer.

I would disagree with that. A very warm pilsner (or fruit ale, or hef) is as mispresented as a very cold imperial stout. Saying "well, this barrel aged stout doesn't taste like much; it should still be recognizable as good beer even when cold" doesn't work.

That being said, there are (of course) good pilsners and bad pilsners.

 

[bob1852]

A-B 2009 USA market share ~50%
Boston Beer Company 2009 USA market share ~0.8%

I doubt they're really worried.

 

[jgln]

I'd be pissed if the only beer available in the stores were $8-$10 a six pack. I hope they live long and prosper so I can still have my natural light between my occasional craft beer.

 

[wscott823]

Like mentioned in the article, many sub-premium light beers are doing well and I find a PBR or NattyBo refreshing and economical. I could care less what happens to the BMCs

 

[Homercidal]

I guess one way of thinking about it is: Has anybody in the history of beer gone from drinking craft beer to exclusively drinking fizzy, yellow macro-lagers? Unless they had too?

Many people claim that prohibition killed craft beer in America, and perhaps it did. But it doesn't explain why Light Lagers (pilsners) are so popular in other countries. The difference between the macro beer in Europe, and the macro beer in the US, is negligible compared to the characteristics of the whole range of beer styles.

Surely the popularity of light lager beer overseas has nothing to do with prohibition in the US!

It amazes me how some people will have such disdain for certain beers while expounding on the benefits of another, and they are very nearly the exact same beer!

It really shows how marketing is a major part of macro beer sales. And of course price has to do with it. I see many more people buying beer because it's cheaper than the others than anything, but macro beers are already so much less expensive than the craft beers, that there is no way they are going be able to manipulate the market on price. They would go out of business quickly by the time they dropped the price enough to matter to most craft beer drinkers.

 

[Laughing_Gnome_Invisible]

Many people claim that prohibition killed craft beer in America, and perhaps it did. But it doesn't explain why Light Lagers (pilsners) are so popular in other countries. The difference between the macro beer in Europe, and the macro beer in the US, is negligible compared to the characteristics of the whole range of beer styles.

Surely the popularity of light lager beer overseas has nothing to do with prohibition in the US!

It amazes me how some people will have such disdain for certain beers while expounding on the benefits of another, and they are very nearly the exact same beer!

It really shows how marketing is a major part of macro beer sales. And of course price has to do with it. I see many more people buying beer because it's cheaper than the others than anything, but macro beers are already so much less expensive than the craft beers, that there is no way they are going be able to manipulate the market on price. They would go out of business quickly by the time they dropped the price enough to matter to most craft beer drinkers.

I have to agree with you. People like pils! Out of the four countries that I have lived in, England has been the only one with any real diversity as far as beer is concerned. I'm not saying that because I'm English, it's just true.

France is all about wine, pastis, and then beer (Pils)
South Africa is all about wine, spirits and Pils
USA is all about Whiskey and Pils.

Without a doubt, pils is the most popular style in the world, and US pils is no different from most others.

Marketing rocks!

 

[babalu87]

I have to agree with you. People like pils! Out of the four countries that I have lived in, England has been the only one with any real diversity as far as beer is concerned. I'm not saying that because I'm English, it's just true.

France is all about wine, pastis, and then beer (Pils)
South Africa is all about wine, spirits and Pils
USA is all about VODKA and Pils.

Without a doubt, pils is the most popular style in the world, and US pils is no different from most others.

Marketing rocks!

Little fix there

 

[fatmoose]

For instance Leinenkugels has some sort of deal with MillerCoors. Leinenkugels gets to use MillerCoors distribution channels, and MillerCoors gets to use Leinenkugels for small scale brewing I think.

Miller bought Leinie a number of years ago, mid 90's I think it was, prior to the SAB and later Miller-Coors deals. They've retained it largely as it was with the vast majority of production remaining at the old brewery in Chippewa Falls.

I had heard some random rumblings about the Leinenkugel family trying to buy back the company from Miller-Coors but I'd be surprised if that happened.

 

[swankyswede]

Surely the popularity of light lager beer overseas has nothing to do with prohibition in the US!

Right, because light, pale lagers were already becoming popular. If you look at the long view of history, the current trend of very pale, fizzy, cold lagers with little discernible taste is exactly that - a trend. The trend before that was more localized. Due to the industrialization of brewing in the 1800s through today, as well as the modernization and globalization of distribution, the current worldwide trend is toward BMC-type beers, still a technical marvel when you consider the amount of effort it takes to brew something that pale and clear over and over again with no change in taste. Modelo and Corona, Heineken, Amstel, Kingfisher, Kirin, the list goes on. The trend towards a more diverse style is still up and coming - remember, the craft beer movement is less than 40 years old, and trends in things as entrenched in tradition and memory as beer tend to move a lot slower than the trends in clothes and music.

 

[SteveM]

Wall Street Journal had a great (and very funny) article a few weeks ago on the same topic - check it out:

http://online.wsj.com/article/SB10001424052748704875604575280522341919974.html

 

[artyboy]

Wall Street Journal had a great (and very funny) article a few weeks ago on the same topic - check it out:

http://online.wsj.com/article/SB10001424052748704875604575280522341919974.html

Anyone who can't taste the difference between natty ice, coors light, miller and bud aren't even trying to taste the beer. I used to buy Coors Light when I wanted to go "cheap". Now I stick to Keystone Light and PBR. Miller isn't bad but Coors and Bud are both horrible to me now. PBR is $4 for a 6 pack. Keystone Light is $5 for a 6 pack of pints. They're both great ALLs. Even Old Milwaukee is pretty good. Why buy the expensive cheap **** when you get a better product with the cheap cheap ****?

I still buy good beers. Last night I took a bottle of RR Damnation over to my bro's to let him try it. I thought I'd be cute and put some Keystone Light into a sniffer glass for him. He did the whole sniff sniff sip sip thing and declared it extremely drinkable! It didn't even register to him that it was Keystone Light because he probably never actually bothers to taste it (even though I took it out of his fridge). He also doesn't know what "good" beer tastes like so he had no idea what to expect from the Damnation.

 

[dirtdigger]

Maybe we see the return of Spuds McKenzie?
Personally, I'd like that!

 

[doctorRobert]

You could say they tried to improve quality with American Ale, but for a dollar more you could buy Sierra Nevada. Done deal in my book.

I'm always surprised with the philosophy of competition between craft beer and mega-lagers, on both sides. IMO, it's like Volkswagen trying to compete with Harley Davidson. Sure, they're both vehicles, but completely different demographics and attitudes.

And take that a step further, what's the profit margins on SN vs American Ale.... I bet Bud makes more on their cheaper beer.

Making better beer is more expensive... not necessary the best thing to do during a recession.

 

[drac0]

Wall Street Journal had a great (and very funny) article a few weeks ago on the same topic - check it out:

http://online.wsj.com/article/SB10001424052748704875604575280522341919974.html

Not a bad opinion piece.

 

[harrydrez]

But the bottom line is that we are witnessing a Renaissance of beer. Tastes are changing, just as they were when refrigeration became common and people discovered the enjoyed the taste of Cold, Light Watery beer (amongst other reasons). Just as when porters became all the rage in England years back.

Yeah, people wanted ice cold watery beers that had no strong flavors either way, which is how these beers came about. Tastes do change, interesting times we're in.

 

[redalert]

"Anheiser-Busch sales are down.."

You mean the Vortex bottles didn't improve sales?! Wow I was sure every brewery would have to close down because of the cannibalization of sales. I didn't see this one coming

 

[OsbornBrewing]

If you are drinking bud light do you care about quality?

Just because you don't like it does mean it is low quality beer. Take your favorite homebrew, and I challenge you to make two separate batches with 2 requirements 1) they have to taste EXACTLY the same, 2) you can't mix any parr of one batch with the other, unless your harvesting yeast.
Now if that is not big deal brew one batch in St Louis and the other in Atlanta.
They have nailed the brewing process so well you can only tell where a Bud was brewed by reading the can. That is a high quality beer. I still don't choose to drink it, but that is a taste issue not a quality one.