You love the blog, so subscribe to the Beervana Podcast on iTunes or Soundcloud today!

Wednesday, March 27, 2013

Meanwhile, In Macroland...

This whole article is a fascinating document.  It's good antidote to the feelings of hubris that arise in those moments when you feel like everyone in the world drinks Pliny the Elder.  I'm going to do some cheap blogging here and just clip sections that left my chin hanging.  The bolding is mine, for emphasis:
[B]rewers are dedicating fewer dollars to reach him as the "subpremium" segment declines. Instead, beer marketers, on a quest for fatter profit margins, are encouraging drinkers to trade up to pricier line extensions such as Bud Light Platinum or new concoctions like Redd's Apple Ale.*
In the face of stiffer competition from craft beer, Miller gives you Apple Ale.  A different philosophy than the craft breweries are using.
Brewers are advertising economy brands less: Measured-media spending on the five largest low-end brews -- Natural Light, Busch Light, Busch, Miller High Life and Keystone Light -- fell to $6.9 million last year from $22.4 million in 2011, according to Kantar Media.
That's less than a third of what they spent a year before.  Amazing. Come to think of it, though, it has been awhile since I've seen a Keystone ad.
Trevor Stirling, a beverages analyst at Sanford C. Bernstein, said "Consumers are much more likely to "brand' themselves by what they drink, be it a quirky, heavily hopped IPA, or a "sophisticated' Stella; whereas Natty Light and Beast Light have, if anything, negative brand badging."
If you think you understand the beer market, you have to wrap your brain around the idea that Stella is considered sophisticated and that the bigger companies think in terms of concepts like "negative brand badging." 
Despite the competition from crafts, economy brands are not giving up on younger drinkers. A-B InBev's Natural Light, which targets college-age consumers, is seeking to stand out with new "stubby" bottles, dubbed "Fatty Natty," rolling out nationally. MillerCoors is targeting hipsters with its Hamm's brand via grassroots marketing. 
This is probably the only play left--doing a Pabst--but how many times are twenty-somethings going to go for the faux retro cred thing?

So there you go: intel from the front of the macro wars.  It's a whole different world. 
*No, I was not aware of the existence of this product.


  1. Don't they know that retro thing has been done before?

  2. Man, do I get points for being ahead of the curve? I was all about the Hamm's in 1998 (when I was 19). Of course, we all do stupid things as teenagers...

  3. Redd's is targeted at the Mike's Hard Lemonade family of products - a "Flavored Malt Beverage". They are going to line-extend off of that into other flavors (strawberry being the first) to go after the growing FMB segment of the market.
    (Info from the MillerCoors distributor convention three weeks ago in Orlando).

  4. The macros have deep pockets and will try anything, no matter how stupid or repetitive, in hopes of gaining even a minimal bump in sales. They are marketing engines and that's the only way they know to roll.

    There are two fantastic, books that do a great job describing past marketing failures at Coors and Heineken, respectively: Silver Bullets (Robert Burgess) and Beer Blast (Philip Van Munching). Complete failures do not change the way these people think or operate. They merely put a different spin on a failed idea and say it's new. I couldn't put either one of these books down. Highly entertaining stuff. And definitely relevant to this discussion.

  5. Are they bringing back the Hamm's bear? Or did he ever leave?

  6. I'm not sure the big brewers are a clueless as all that. They can operate pretty successfully in the craft/real ale/niche market, as AB InBev have done by buying Goose Island or as Molson Coors are doing in the UK with their stewardship of the Worthingtons brand, takeover of Sharps etc.