Big beer’s plan to entice consumers
AMERICA’S biggest beer companies want more millennials to buy their products, but they don’t want to be, like, obvious about it.
Anheuser-Busch InBev and MillerCoors – the makers of America’s favourites, Bud Light and Coors Light – have watched their popularity slowly erode over the last decade. Their plans to stem the tide include marketing to a generation notoriously resistant to efforts at being won over.
Beer has lost 10 percentage points of US alcohol-market share over the last decade to wine and hard liquor. To claw it back, the companies are buying up craft brewers and launching new lines of alcoholic sodas in an effort to appear cooler to the roughly 115 million Americans born from 1980 to 2000.
The strategy comes at a time when six out of 10 drinkers say a brewer’s independence is important when choosing a craft beer and increasing numbers of Americans are rejecting sugary drinks.
“I know that they’re panicking about that loss of market share,” said John Verive, the founder of the Beer of Tomorrow blog in Los Angeles. “So they’re going after whatever fragment of a market they can. They’re just going in every different direction.”
To be fair, selling to that age cohort has proved confounding for a lot of industries. But for many brands it is also necessary. Millennials’ buying power “will heavily influence most food trends in the coming years” and will rise to 29 percent of US spending in 2020 from 17 percent last year, according to Bloomberg Intelligence analysts Diana RoseroPena and Kenneth Shea, citing data from Information Resources Inc.
Changing marketing
According to a Boston Consulting Group report titled “How Millennials Are Changing the Face of Marketing Forever,” they don’t respond to the same tactics that separated their parents and grandparents from their money.
They desire “personality” in their products. They have less trust in “experts.” Marketing and product releases can’t look, feel or smell like they have in the past.
Craft beer settles neatly into this niche. Brewed in small batches in brick warehouses by local artisans who can tell compelling company-origin stories, craft brews have seen their share of US beer sales rise steadily in the 2010s.
In 2014, it was 19 percent, compared with 16 percent the year before, according to the Brewers Association. And though AB InBev and MillerCoors account for 72 percent of US beer sales between them, they’ve decided if they can’t beat ’em back, they might as well buy ’em.
AB InBev kicked off the recent wave of acquisitions with the 2011 purchase of Chicagobased Goose Island Beer. In the last two years, the Belgiumbased maker of Budweiser has bought six more US craft breweries, including two in December.
The acquisitions mean craft beer is distributed by the big companies and is more widely available. It also means that millennials may shun even beers they like because of corporate taint.
The marriage between craft and corporate beer can also get awkward. Seattle-based Elysian Brewing, which AB InBev bought last year, bottles Loser Pale Ale with the tagline “Corporate Beer Still Sucks” on every label.
Last year, MillerCoors bought San Diego-based Saint Archer Brewing, whose home page features a black-and-white Vimeo about Andrew Jones, a bearded, tattooed drummer for the band Hy Brasil.
It shows Jones skateboard- ing, surfing and playing the drums, shirtless.
His connection to the brewery comes 4-and-a-half minutes into the tastefully produced video and lasts five seconds. It shows Jones at a bar being served a beer, while he is wearing a Saint Archer T-shirt.
Being genuine
“Millennials are the most marketed-to generation ever and they know it,” said Scott Whitley, who runs Tenth and Blake, MillerCoors’s craft and import division. “Authenticity and heritage, being genuine, is very important to millennials. You don’t force anything on them. You let them come to you.”
Jorn Socquet, AnheuserBusch’s vice-president of marketing, is testing that idea.
He said he planned to book little or no TV advertising for the company’s new Best Damn Root Beer, alcohol content 5.5 percent.
Instead, he said AB InBev is doing memorable “stunts” like turning a Detroit billboard into a bar or putting a couch behind first base at a baseball game for “the best damn seats” in the ballpark.
“There’s a bunch of stuff that we want to do that people will say, hey that’s cool,” Socquet said.
“If you look at millennial brands that today are at the top of their preferred list, most of the time the advertising budget of those brands is zero.”
The beer companies are famous for their TV commercials – the newest will be showcased during the February 7 Super Bowl, when many viewers tune in just to see the ads.
Hard soda won’t have the kind of exposure that a puppy chasing Clydesdales or a Silver Bullet train slicing through ice can provide. Plus, soft drink sales have fallen for 10 years in a row, according to Beverage Digest, and a Gallup poll last year found that more than 60 percent of Americans said they were actively trying to avoid drinking soda.
MillerCoors is betting against the soda-pop trend, too. This month the Chicago-based brewer launched Henry’s Hard Sodas in flavours including orange and ginger ale.
Pressure is mounting for the new products to succeed.
Mainstream beer brands – Coors Light, Miller Lite, Budweiser and Bud Light – lost 10.6 million barrels of volume between 2010 and 2014, according to data from Susquehanna International Group. – Bloomberg
Six out of 10 US drinkers say a brewer’s independence is important.