As the global operators of A-B InBev and SABMiller work to finalize a massive merger agreement, their top U.S. brand leaders have a more immediate goal: Reclaiming sales momentum from scrappy craft brewers and aggressive spirit brands. And as they search for growth, marketing execs will lean heavily on fresh advertising by newly assigned creative agencies.
In the coming months, the brewers will roll out major marketing changes for the nation's two largest beers, Bud Light and Coors Light, that will likely hit the market long before the merger (if finalized and approved by regulators) closes. Both brands have experienced steady declines in recent years. Bud Light's U.S. market share fell from 19% in 2010 to 17.5% last year and Coors Light dropped from 8.5% to 8.2%, according to Beer Marketer's Insights.
Meanwhile, Heineken USA is gaining some marketing control from its global headquarters in Amsterdam. The domestic division plans to roll out a U.S.-only campaign for flagship Heineken, which in recent years had adopted larger global efforts. The Dutch brew, which is the nation's third-largest import behind fast-rising Mexican beers Corona and Modelo Especial, has not been immune to U.S. marketplace challenges; its market share slipped from 1.9% in 2013 to 1.8% last year, according to Beer Marketer's.
Bud Light ages up
Of the three brands, A-B InBev-owned Bud Light might be prepping the biggest change.
The brewer plans to scrap its nearly two-year-old, millennial-focused "The Perfect Beer for Whatever Happens," campaign for an approach targeting a broader age group. "Up For Whatever" is "trying too hard" to appeal to young adult drinkers, Jorn Socquet, U.S. VP-marketing for A-B InBev, said this week in an interview from Las Vegas where he was attending the annual meeting of the National Beer Wholesalers Association. "Bud Light as a brand appeals to everybody. And everybody who is young at heart should be attracted to Bud Light, not just [young adults]," he said.
The campaign is being developed by Wieden & Kennedy, New York, which took over Bud Light in July from BBDO, New York. While Mr. Socquet declined to reveal details, he said the campaign would include celebrities -- which he did not name -- and would break as early as December or as late as during the Super Bowl in February.
The brewer is the exclusive beer advertiser for the game. Mr. Socquet suggested that the brewer's Super Bowl ad lineup would go far beyond Bud and Bud Light, which have consumed all the brewer's buy for the past two Super Bowls. Shock Top will get one ad, the brewer recently confirmed. And the brewer might not stop there, with brands such as Michelob Ultra — which is handled by FCB, Chicago — in contention. Budweiser, which is run by Anomaly, New York, will return to the game, but Mr. Socquet declined to say if the King Of Beers will be paired with puppies and Clydesdales as in recent years.
"Every agency knows what we are expecting them to deliver and the best work will get the Super Bowl spots," he said.
Packaging changes coming
Bud Light's "Up for Whatever" campaign broke during the 2014 Super Bowl. It was developed before Mr. Socquet arrived in early 2014 and was built around a strategy of linking the brand to spontaneous fun. A 2015 Super Bowl spot featured a young adult drinker who orders a beer labeled "the perfect beer for stepping outside for some old-school fun" before being led to play a life-sized Pac Man game.
As it sought a new approach, A-B InBev did a deep study on the brand all the way back to 1982 to "understand what made Bud Light successful in the past," Mr. Socquet said. In his estimation Bud Light lost its way sometime after 2005 when it did not keep up with the shifting values of drinkers, he said. "We've gone back to the values that are meaningful today," he said about the new effort. "It's all about youthful mindset. It's about enjoying life and it's about being curious."
Bud Light is also planning a packaging overhaul that will seek to give more attention to the liquid inside. Or, as Mr. Socquet said, "infuse our look and feel with more brewing credentials." Smaller craft brewers have "taken the lead in talking about quality of beers and I think the bigger brands probably have put it a little on the side," he said. "But it's time for us to come back and talk about our beers as well."
Rocky Mountain grit
MillerCoors -- which is a joint venture between SABMiller and Molson Coors -- began adopting a similar product quality marketing approach roughly a year ago. Now-retired CEO Tom Long told distributors in October 2014 that "we've seen a growing misperception that lighter beers are somehow lesser beers when it comes to quality." Big brands were fixated on lifestyle and humor to the detriment of "selling the functional strengths of the beers," he said.
This year, Coors Light -- long positioned as "Rocky Mountain Cold Refreshment" -- will take a more "competitive and assertive tone," under new agency 72andSunny, said MillerCoors Chief Marketing Officer David Kroll, who was placed in the role in July by new CEO Gavin Hattersley. The strategy will "celebrate more of the intrinsics of the product for sure," he said in an interview from the wholesaler's meeting.
But he added that "we will bring our advertising back to a point that distinctly reignites the pride behind Rocky Mountain cold refreshment, and takes the brand beyond cold communication" by "directly linking it to that cohesive grit and mindset about what it means to be born in the Rockies," Mr. Kroll said. New ads are still in development but will likely break around the first of the year, he said.
Business as usual
MillerCoors executives stressed this week that they would stick to the their strategies even if one of its joint venture owners, SABMiller, is absorbed by A-B InBev as part of the tentative merger agreement announced Tuesday. In the most likely scenario, Molson Coors would take full control of the joint venture because antitrust concerns would prohibit A-B InBev from controlling the MillerCoors brands.
In a note to distributors Tuesday, Mr. Hattersley stated that "it will be many months and there are many hurdles before a deal could be completed. And remember, MillerCoors operates as a standalone company, not as a subsidiary of either parent." He added that "we will stay focused on MillerCoors and our plans to drive growth in the U.S., not worrying about the global beer market."
Meanwhile, Heineken -- which is not involved in the deal but is a big global player -- is taking steps to give its U.S. marketing department more independence. The brand since 2011 has deployed its global "Legends" campaign into local markets including the U.S. Ads have featured stylish leading men navigating urban environments. The agency behind the campaign, Wieden & Kennedy, Amsterdam, was cut from Heineken's roster in June and Publicis was named lead agency.
Neil Patrick Harris pays off for Heineken
In an interview at NBWA, Heineken USA CMO Nuno Teles confirmed that Publicis, New York would develop a U.S.-only campaign for the brand. He declined to reveal creative details but said it would break next year and that "Legends" -- also known as "Man of the World" -- would remain as a creative platform.
But the tone could shift significantly. W&K's campaign was almost entirely image driven. Mr. Teles suggested that the Publicis effort would include some product-focused marketing. "We need to deliver the story about our liquid," he said. He drew a comparison to a U.S. campaign launched in 2014 for Heineken Light that stars Neil Patrick Harris. Ads keep a witty tone but also plug the brand's taste. The effort has been considered a success and will come back for year three.
"We proved ourselves two years in a row helping [Heineken Light]," Mr. Teles said. And that "gave us the authority" to take on the U.S.-only assignment for Heineken.
One big brand that is not planning major changes is Corona, which keeps bucking trends by posting stellar sales growth. Sales were up 10.6% in the 52 weeks ending Sept. 6, according to IRI, which does not include bar sales.
While the brand has made changes around the edges, like redesigning the design of its cans, ads by Cramer Krasselt have stuck to the "Find Your Beach" theme for years. "Our ads work for us because we are not changing positions," Jim Sabia, CMO for Corona-owner Constellation Brands, said in an interview at NBWA while sipping a Corona Light with its familiar lime garnish. When consumers "hear our commercials, or see us in social and digital, it's the same message building and building every year."