Women's Beer?

Happening on one of those extremely forgettable macro ads recently--maybe the Coors Light ad touting the temperature-sensitive labels--Sally turned to me and said, "They're not selling beer, they're selling packaging." Remember this anecdote as I relay news that Carlsberg has a new product aimed at women:

Danish brewer Carlsberg is getting set to unveil a new beer called Copenhagen, which is already turning heads for the minimal, stylish design of its bottles and other packaging. The message is unmistakable: In a category almost complete geared toward men, Copenhagen can also attract women, who make up one-quarter of the beer market.

Has the company come up with a new recipe that might appeal to women's palates? Have they made beer that will compete with wine at the dinner table? Nope. It's about the package:

"We can see that there are a number of consumers, especially women, who are very aware of design when they choose beverage products," Jeanette Elgaard Carlsson, international innovation director at Carlsberg, says on the brewer's website. "There may be situations where they are standing in a bar and want their drinks to match their style. In this case, they may well reject a beer if the design does not appeal to them."

This is not only depressing--but demeaning. Does Carlsberg think that the whole of women's interest in beer comes from accessorizing? Apparently, it does: "Blonde is the new black."

I Seem to Recall That Coors Used to be More Hoppy

As our palates change, we sometimes mis-remember the past. We recall beers that impressed us with their aggressive flavors and wonder what happened to them. Poor Full Sail has weathered accusations of dumbing-down Amber for years. Of course they haven't; rather, after ten or fifteen imperial IPAs, it is the tasters' palates that change. But that's in the realm of the micro.

With the macros, it's a totally different ball game. Here's a clip I meant to post where Ken Grossman describes what happened.

If you remember a more flavorful Coors, your memory doesn't deceive. Twenty years ago, it was more flavorful. By the way, the flavor threshold for hops is somewhere in the range of 8 IBUs (it depends on the beer, obviously), which means that you can't taste any of the three hops used to brew "triple hops brewed" beer. At this point, hops are solely there to keep the beer from being too sweet--they add zero flavor.

Meanwhile, in Macro World

We all have an inner Doc Wort--a curmudgeon who expresses himself perhaps inappropriately at the thought of yet another 247-IBU quad IPA. It's good to have a reality check every now and again. Have a look at what the macros are up to. While Bud is releasing a 55-calorie beer (aka water), Miller is promoting their latest product:

MillerCoors, the second largest beer company in the U.S., has launched a new iPhone application called Tip ‘n Spin in time for March Madness. Tip ‘n Spin, MillerCoors’ sixth iPhone app, is a great example of how a leading consumer packaged goods brand is embracing mobile technology to strengthen the emotional bond with the “sweet spot” of their target audience to drive deeper engagement with the brand. The application is integrated with Miller Lite’s March Madness marketing campaign that is rolling out nationwide.

(Bolds mine.) This is so meta and attenuated that it is effectively postmodern art. It is pure context; the attempt to comment on a product in the absence of that product. And the jargon! It makes you long for the solace of a real, wet, quad IPA, doesn't it?

Speaking of brand, I plan to do my next installment of brand dissections on MacTarnahans later this week. So far I've looked at two breweries with distinctive, consistent brand identities. I thought it would be cool to look at a company that has spent decades changing theirs.
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Super Bowl Wrap-up

I didn't expect to have comments about the Super Bowl, but three things really jumped out and compel me to comment.

1. Excessive sexism. It seemed like every other ad had a vicious anti-woman subtext. There seemed to be two variants, the likes of which I haven't seen in 30 years: 1) women are stupid, to be tolerated only for their bodies, or 2) women emasculate men. They seemed especially offensive because now, in 2010, it's really hard to blame this sentiment on culture. Sitting in a theater pub with an audience of at least 40% women really brought the offensiveness home.

2. Anheuser-Busch has released a 55 calorie beer--Budweiser Select. Apparently this isn't breaking news--388 people have rated it on BeerAdvocate (current score: D; sample comments: tastes of "white bread," "corn flavored-water," "metallic corn," "water from a glass that previously had a real beer in it"). Bud long ago abandoned hops; now, under the wise tutelage of the Belgian brain trust, they've abandoned malt, too. Next I envision Bud Pure Bottle Water.

3. Speaking of Bud, man, have they lost track of the brand. Back in the untroubled days of market dominance and regular growth, their marketing was hitting on all cylinders. Depending on the demographic, they had a masterful pitch. Luxury and tradition for the AARP set, hip athleticism for the sports set, rah rah revelry for the frat set. Pick a market segment and they owned it. Watching their woeful ads yesterday, I winced and wondered what had become of the marketing department.

But in the end, it was all lightness and joy: the Saints came marching in (Turbodog, no doubt, in hand).

Update. The New York Times points out another interesting trend: geezer nostalgia.

Trust-Busting the Macros?

What happens when two corporations that control 80% of a given market decide to raise prices at the same time, by the same amount? The feds get interested. It looks like collusion and price-fixing:

Anheuser-Busch InBev — purveyor of the president’s preferred brew, Bud Light — and MillerCoors, a joint venture between SABMiller and Molson Coors, are raising prices at the same time, during a recession and while beer demand is slumping. With 80 percent of the market between them, the move almost begs for an antitrust review.

The problem, of course, is that consolidation has left us with just two owners. When there are three or more, the companies have to compete on prices for market share. When there are only two? Well, all that competition gets in the way of profit margins.

After South African Breweries bought Miller in 2002, it set out to take market share from Bud. Its bigger rival responded by slashing prices. The others were then forced to match. This competition fostered a better outcome for consumers — indeed, the summer of 2005 was a beer drinkers’ dream.

That’s all changed. SABMiller and Molson Coors kicked off a joint venture last year that combines the market powers of the second- and third-largest players. InBev, meantime, has no stomach for a price war after its $52 billion debt-financed splurge on Anheuser.

By historical standards, this is pretty outrageous. In 1966, the Supreme Court prevented the 10th and 18th largest breweries--Pabst and Blatz--from merging. All of which has inclined Obama to have a look, and the Justice Department may review these Bush-era mergers.

As an editorial aside, the idea to raise beer prices seems totally boneheaded. While it's true that they control 80% of the market, that share isn't growing, thanks to micros. Sales are way down this year for tin-can beer, and further alienating off your already-wavering customer base seems like a bad long-term strategy. And all of that is before the question of price-fixing arose. We are often lectured by certain segments of the political spectrum about the genius of business, but there are moments when you have to wonder.


Update.
Patrick Emerson riffs on my post, rebutting my suggestion that the macros are behaving stupidly. Rather than have a two-blog debate, you can read his post there, and my response in comments.

Coors for the Ladies

Last night, Gillian Edwards left an intriguing comment on my gender preferences post:

I work for an initiative called BitterSweet Partnership in the UK which has been set up to address the fact the UK beer industry has traditionally ignored women (an example being stereotypcial and sexist advertising) Beer shouldn’t be pitched as a masculine drink and it’s great to get other people’s opinions on this.

Sounds good, right? I envisioned a little grassroots effort where women worked to pop the kind of cultural stereotypes I discussed in my post. Pro-beer, pro-women, cool. Sadly, no.

Rather, it's a very highly-produced site owned and operated by the Molson Coors corporation. Using a classic technique, the company is playing to a targeted group with a sympathetic campaign. But while it comes packaged in social-justice wrapping paper, it's just an old-time marketing campaign. Coors has no particular interest in encouraging beer-drinking among women or dispelling long-held stereotypes. They want to encourage women to drink Coors, period.

A couple years ago, Coors launched a Latino-targeted campaign, and with admirable candor, admitted that the goal was to play on emotional sympathies to push product:

"The African American and Hispanic markets together make up nearly one-third of the population in the U.S. and 21 percent of all U.S. males ages 21-34 are Hispanic. While Coors Light's cold refreshment is the same for any consumer, we tailor how we communicate that message to ensure it builds the personality of the brand and connects emotionally with multicultural consumers."

This is no different. It's a company using exactly the same Madison Avenue techniques to appeal to women that it used when it objectified them in ads like the Coors Light twins series. Or the more offensive "Wingman" spots. In politics, this kind of thing is called "astroturf" because it mimics a grassroots campaign. In the commercial sphere, it's just called marketing. Caveat emptor--and for me, no sale.

Coors is not pro-women. It's pro-Coors.

Cheaper Cheap Beer Roughing Up Cheap Beer

"Brand loyalty" is all well and good ... until the cost of supporting your cheap brand runs into the realities of a collapsing economy. Then it's off to the next, cheaper cheap beer:

Heineken sales sank 18% from the previous year in grocery, convenience and drug stores during the two-week period ended July 5, followed by Budweiser at 14%. Corona Extra sales dropped 11%, while Miller Lite declined 9% and Bud Light fell 7%. Coors Light sales held up better, falling less than 1% from a year ago.

Meanwhile, sales of “subpremium” beers including Busch, Natural Light and Keystone posted “substantial gains”, according to Ad Age, which didn’t provide the specifics.

Ad Age adds (amusingly):

But while the economy is clearly dragging on the biggest beer brands, the severity of the declines also raises questions about the effectiveness of some of the category's biggest ad budgets. The decline at Bud Light comes as the brand is nine months into its "Drinkability" effort, designed to give the beer a more product-attribute-fueled push than its former frat-humor efforts did.

Miller Lite has tried to pound its "Great Taste" to sales gains in the same manner its new stable mate Coors Light succeeded with a single-minded focus on "Rocky Mountain cold refreshment." But that effort, too, has yet to gain traction.

Gee, I wonder why those ad campaigns have failed to sway drinkers. It couldn't be because, you know, since all tin-can beer tastes the same, customers are buying the cheapest stuff. Nah, couldn't be that.

When Macros BS

So there I am, starting to relax as the Zags pull away from the plucky Akron Zips (Zips versus Zags--evidence someone in the NCAA selection committee has a sense of fun), and this abomination appears on my small, nearly-obsolete analog screen:



Actually, that's just a shorty version of the full commercial, available at the Miller Lite website. Let us pause for a moment to consider the brewing wisdom imparted by the Miller Corporation of bad beers by examining the text of the full commercial:

In the first step, our hops give Miller Lite a clean, distinctive pilsner flavor and aroma. So when you take that first sip, your taste buds are on their way to HAPPY TOWN. The second step: hops are added for balance, ensuring perfect body and hop taste in every beer. And we all know how much you appreciate a GOOD BODY. So you're welcome. In the third step, our hops add to Miller Lite's perfect head and lock in its great taste from start to finish. It also gives you a ROCKIN' BEER mustache.

Let us review. Hops: 1) give Miller Lite a distinctive pilsner flavor and aroma; 2) ensure perfect body; 3) add to a perfect head and "lock in" great taste.

Only in the PR conference rooms where young MBAs hatch bad commercials while sipping Chardonnay are these things true. Ghastly.

Craft Bud

Via John, here's an interesting development--A-B is going to introduce what amounts to a fuller-flavored version of Bud:

About five months early, DRAFT recently snuck a taste of Budweiser American Ale, the darker, more craftlike Bud offering that’ll hit your corner bar this fall. Billed by brewmaster Eric Beck to be a “more robust” Budweiser, that’s exactly what American Ale is: The beer pours amber with a hefty beige head, and a nose with hints of pine and citrus. Dry-Cascade-hopped, there’s noticeable bitterness, but with an obvious malt backbone--a balance achieved by more than a year of test batches. The mouthfeel is smooth, with Budweiser’s signature quick, crisp finish. Packaged in a curvier, classier bottle than your usual Bud, this 30-IBU, 5.3%-ABV brew seems an earnest, heartier version of the brewery’s famous lager, ideal for craft newbies and beer geeks willing to see this big brewer in a new light. Watch for American Ale on shelves beginning October 6.

Now, I have no great interest in this beer. Bud has something like 8 IBUs and tastes like old dishwater. This version may have stats that seem shocking by macro-lager standards, but I doubt it could compete with Oregon pales and ambers, which are saturated with flavor, rather than "hints" of pine and citrus. (I could be wrong--dry-hopping is a sure bet for radically improving a beer.)

But whether it's good or not, this is a development to watch. Remember those horrible gimmicks beer companies rolled out every few years--dry beer, ice beer, cold-filtered beer, and on and on. Yet still, what the breweries offered were beers that had less flavor in each iteration. It was as if they were trying to come as close as possible to alcoholic spring water as possible. (Zima was a zenith of sorts, a chemically alcoholic beverage that contained no flavor you couldn't find in a soda.) The effect was to slowly destroy beer culture across America.

Craft beer may be winning one battle, then. Circa 1980, when the nascent craft movement was getting started, the macro-breweries had managed to restrict and control variability effectively enough that the war was being waged on intangible "brand" elements. After all, no one could taste the difference between Hamm's or Pabst. But now, the big companies have lost that control. The cat's out of the bag, and Americans know that "beer" doesn't refer solely to canned dishwater.

Anheuser-Busch may still be making most of the money, but it can no longer control the market. Growth is elsewhere. They may now have to compete on the basis of flavor. Who'dda thunk it?

Hello SABMillerMolsonCoors!

Actually, it will just be called MillerCoors (bizarrely), but it's the same thing: consolidation continues as brewing conglomerate SABMiller is poised to merge with Molson Coors.

Peter H. Coors, vice chairman of Molson Coors, said the transaction was prompted by “profound” changes in the American alcohol business that are challenging large beer companies. Sales of domestic beers have been battered as consumers switched to wine, spirits and craft beers and imports.

It looks to me like a beautiful multinational metaphor for the moribund macro American market: they all look and taste the same anyway, so why not merge them into one giant company? Everything else is just marketing.

Sometimes, you wonder if the companies behind the beer even know what beer is:

Besides cost savings, the merger will create a strong portfolio of brands, from domestic brews like Coors Light and Milwaukee’s Best to import beers like Leinenkugel’s, Peroni and Molson Canadian.

Add to that list Henry Weinhard's, formerly a Miller subsidiary, which has now been owned by just about every parent company in the country. But what's really surprising is that no one seems to recognize that while this may make some kind of abstract business sense, I have seen absolutely no evidence that it's anything but business suicide.

Bud has held steady at about 50% of the market for years. A decade ago, A-B brewed 91 million barrels and held a 48% market share. Miller, once an ascendant company in American brewing, was still holding its own with 44 million barrels, or nearly a quarter of the market. Coors sold 20 million barrels and had a market share of 11%. A decade later, after consolidation?

The joint operation will control about 29 percent of the American market, compared with 49 percent for Anheuser-Busch, analysts said.

In ten years, Miller and Coors have given back 5% of the market. So the little fish keep eating up even littler fish, but counterintuitively, they shrink. Not only do they not gain market share by picking up the small brands, but they actually lose ground over time.

Here's what the brewing companies seem to miss: beer is a local product. With consolidation, the little local brewers get sucked up into a corporate borg and brewing is shifted hundreds of miles away--the beers change, they're no longer local, and the market dries up. Who cares about Henry's if it's brewed in California--it's just a label on a beer can at that point. Many of the brands will die a slow death, perhaps even Coors, which may no longer be made with "Rocky Mountain spring water."

Here's an early prediction: in ten years, SABMillerMolsonCoors will have reduced the number of brands in their portfolios substantially and will command less than 20% of the market. Of course, they're unlikely to make it ten years before further consolidation happens. Which will be greeted, as always, as a shrewd business move by Wall Street.

(Of course, it's all just entertainment for those of us here in Beervana. We'll pour a pint of stout and watch the mini-macros battle for A-B's scraps.)

Beerveza?

I stumbled across an ad last night for the newest in a long string of half-assed industrial beers aimed squarely at the 21-year-old set: Miller Chill. (Which is charitable; many high school parties will no doubt feature half racks of Chill.) It follows in the long line of alcohol products for people who don't like beer--wine coolers, alcopops, Zima, etc. Although the non-malt beer substitutes irritate me, not so much as when a venerable old brewery like Miller succumbs to a purely commercial faux beer like Chill. Witness the new ad:

Ad copy:
Introducing and unexpected new twist on cerveza: Miller Chill, the refreshing light beer brewed with a hint of lime and salt. Inspired by a Mexican recipe. It's beerveza, brewed for a new level of refreshment.

Uggh. What an embarrassment.