Despite the rise of smaller craft beer brands, the brewing industry remains top heavy when it comes to ad spending.
Anheuser-Busch InBev and MillerCoors last year shelled out a combined $1 billion on measured media in the U.S, accounting for 75% of the money spent in the beer category, according to Kantar Media. When Corona-marketer Constellation Brands and Heineken USA are included, advertising is even more concentrated, with the top four spenders accounting for 93% of all measured media, or $1.25 billion.
But in recent weeks, a couple of craft brewers have launched TV campaigns that signal a willingness to spend more.
Hawaiian-born Kona Brewing Co. earlier this month launched its first ever TV ads with a campaign called "Dear Mainland" that seeks to build awareness for the Kona brand, which is well-known in Hawaii but less visible in the other 39 states where it is sold. Meanwhile, New Belgium Brewing, which owns Fat Tire, just launched its second straight year of TV advertising for its "Pairs Well with People" campaign.
Both campaigns are regional and will come nowhere near the media investment the big boys routinely put behind their brands. But the efforts show that craft brewers, which have historically relied on grassroots and social-media marketing, are at least experimenting with more expensive and traditional marketing techniques.
TV "allows us to reach outside the category of craft beer drinkers," said New Belgium spokesman Bryan Simpson.
Craft brewers sold 15.6 million barrels of beer in 2013, up from 13.2 million in 2012 and the segment now accounts for nearly 8% of total beer volume, according to the Brewers Association, a craft beer trade group. "We'd certainly like to help grow that to 20% for the whole category, and the way to do that is to reach out beyond the converted and bring new folks into the fold," Mr. Simpson said.
Still, TV advertising remains too expensive for most craft brewers, said Jenn Litz, who covers the industry for Craft Business Daily. And TV can even be cost-prohibitive for the largest craft brewers, such as New Belgium, which have to "constantly assess their marketing mix to determine whether TV is both effective and affordable," she added.
The most aggressive ad spender is Boston Beer Co., which is also the largest craft brewer by volume sold and had a 1.4% share of the entire beer market in 2013, according to Beer Marketer's Insights.
The brewer has been running TV ads for a while for its flagship Sam Adams brand and late last year debuted national TV for its Angry Orchard cider brand.
The company in 2013 ranked fifth in the beer category in measured media spending at $38 million, which was $4 million more than liquor giant Diageo spent on its beer brands in the U.S., which include Guinness. In the first quarter of 2014, Boston Beer boosted its advertising, promotional and selling expenses by $17.8 million compared with the first quarter of 2013, the company said on a recent earnings call.
Kona is owned by the Portland-based Craft Brew Alliance, which also markets Red Hook beer. Anheuser-Busch InBev owns 32% of the company's common stock and Craft Brew has access to A-B InBev's wholesaler network, but the marketer maintains its own ad budget.
In 2013, the company spent a mere $136,700 in measured media on its brands, according to Kantar. But Craft Brew Alliance opted to boost advertising on Kona this year after spending years focusing on growing distribution, including a recent expansion into the Midwest, said Robert Rentsch, the company's senior director of brand marketing. "As craft beer grows, so does the level of competitiveness [and] so does the level of resources needed," he said.
The campaign is by independent agency Duncan/Channon of San Francisco. Ads are running on TV in San Diego and Orlando, with radio and out-of-home ads in Los Angeles. The TV spots, like the "single-tasking" ad above, promote Kona's Longboard Island Lager and Big Wave Golden Ale, while connecting Kona to a relaxing island lifestyle. "It's an easy brand to understand," Mr. Rentsch said. "It's liquid aloha, and that resonates."
Kona was first brewed in Hawaii 20 years ago, but is now made all over the country, including Oregon, Washington and New Hampshire. Production will soon begin in Tennessee, Mr. Rentcsh said. Sales grew by 25% in the year ending April 20 to nearly $36 million, according to IRI, which excludes bars and restaurants.
Colorado-based New Belgium has also been expanding, with a new brewery slated to open in North Carolina. The new TV campaign is by Cultivator Advertising and Design of Denver and will run in cities in nine states, including Chicago, Denver and San Francisco. The three new TV ads play up the brand's long-used bike-friendly positioning by featuring "bike jousting," "junkyard cyclocross racing" and bearded and black-leather-clad bikers called "Chopaderos."
The brewer, which spent $1.4 million on measured media in 2013 according to Kantar, first ran TV ads for one campaign nine years ago. But New Belgium had pulled the plug on TV until returning to the air last year. The brewer's media agency is Dentsu's Vizeum, New York, which won the account last year.