Omnicom Group's DDB Chicago, A-B's lead agency, is working on TV ads pointing out that the brewer of Lite and Genuine Draft is owned by a foreign company, according to people familiar with the work, which is still in production. The ads are a retort to the "President of Beer" ads from London-based SABMiller, which make fun of Budweiser's "King of Beers" slogan and Clydesdale mascot.
It's unusual-and risky-for market leaders to step off their pedestal and respond to smaller competitors because it reminds consumers of alternatives. The fact that A-B is weighing a response indicates how seriously the marketer is taking its distant No. 2 rival as Lite sales surge and Bud Light slows. It already has cut prices in some markets to narrow or close price gaps with Miller (AA, May 3).
"Now that Miller's woken up after being in a Rip Van Winkle 25-year hibernation and starting to do some effective marketing, [A-B thinks] it's probably important to try to stop the consumer connection as quickly as possible," said marketing consultant Burt Flickinger.
DDB referred calls to A-B; the brewer declined to comment.
Details on the creative couldn't be determined and it remains to be seen whether the ads will run. Omnicom's Goodby, Silverstein & Partners, San Francisco, also is working on spots aimed at the "President of Beer" campaign, said a person familiar with the situation. Goodby could not be reached for comment at press time.
A-B, which controls about 50% of the U.S. beer market, is facing its biggest competitive threat in years and industry observers expect the brewer to aggressively protect its franchise. Indeed, some expect to see the always-intense rivalry heat up to resemble the storied marketing battles of another category where rivals poke fun at each others' products and positioning.
Not as bad as cola
"We had the cola wars," said marketing consultant Jack Trout. "Now we have the beer wars." But while observers expect to see A-B respond in some fashion with advertising, they doubt the brewers will resort to the ruinous discounting that characterized the cola wars.
"Based on what's going on in the marketplace, we assume Anheuser-Busch will continue to react, and react aggressively, to our message," a Miller spokesman said.
In fact, it could be expected of the famously combative brewer.
"Anybody who has been in the beer industry more than five minutes should know if you attack Bud, they're coming right back at you," said Sam Hill, president of Helios Consultancy, who has studied Sam Adams' marketing.
During the early 1990s-at a time when Boston Beers and other craft brewers were taking shots at the quality of big beer marketers-A-B went after Boston Beers, marketer of Samuel Adams Boston Lager. It pointed out that Boston contracted out its brewing rather than doing it in Boston. Indeed, A-B ran ads in which the ghost of Samuel Adams chastised Jim Koch about misleading drinkers where the beer is made.
The rivalry has heated up since South Africa Breweries bought Miller from Philip Morris Cos. in 2002. Miller has jabbed at A-B since last year in the "Good call" campaign that positions Miller beers as the better-tasting choices. Last year's "Epidemic" spot from WPP Group's Y&R Advertising, Chicago, shows beer drinkers screaming they can't taste their beer while Miller drinkers savor theirs.
Other spots have taken aim at A-B directly. In one, a woman tells a bottle of Bud it's being dumped in favor of Genuine Draft. Interpublic Group of Cos.' Martin Agency, Richmond, Va., handled that effort.
The "President of Beer" ads, by Wieden & Kennedy, Portland, Ore., are a variation on that theme. The spots, which parody political advertising, feature a mock candidate exhorting drinkers to make Miller the president of beers and ridicules Bud's "King of Beers" in a democracy. In one spot, the man is debating a Clydesdale.
These ads-along with a spot from WPP's Ogilvy & Mather, New York, that touted the fact Lite has fewer carbs than Bud Light-appear to have helped Lite.
Miller Lite posted a 0.6% increase in shipments last year, its first gain since 1999, according to figures in industry newsletter Beer Marketer's Insights. Meanwhile, Bud Light racked up a 2.5% increase, its worst showing since 1995.