Iced? Bud Select Sales Start on Slippery Slope

Marketing Confusion May Have Doomed Brew to Dry and Ice Lines' Fate

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CHICAGO (AdAge.com) -- After a nearly $84 million launch of Budweiser Select last year, recent results for the upscale light beer offering look eerily like past brand-extension hangovers.
April Bud Select sales were down nearly 20% from last year.
April Bud Select sales were down nearly 20% from last year.

Supermarket sales of Bud Select during the four weeks ending April 22 were down nearly 20% from the year-earlier period, according to AC Nielsen data obtained by Advertising Age. The brand's supermarket market share has slipped from 1.7% during the fourth quarter to 1.6%.

While they caution against reading too much into a single sales period, beer industry veterans said that trend is similar to former A-B flops Bud Dry and Bud Ice, which each quickly gained market share on the strength of the No. 1 brewer's powerful distribution system and hefty media spending, but ultimately collapsed amid consumer uncertainty over those vaguely defined brands.

"The drop-off is not unlike Bud Ice and Bud Dry, and it raises a lot of the same issues," said longtime beverage industry analyst Manny Goldman. "Joe Six-Pack never really grasped that Bud Ice was a reference to filtration, and I'm not sure he understands what Bud Select is, either."

Granted, Mr. Six-Pack isn't Bud Select's target. The brand was launched in Super Bowl spots during February 2005 to target young urban professionals who have been increasingly opting for the wine, spirits and craft brews that have all been growing at the expense of domestic macro-brewers such as A-B, Miller Brewing Co. and Coors Brewing Co.

The marketing push quickly propelled Select into the No. 13-selling beer slot in the U.S., although its gains largely came at the expense of Bud Light and other A-B brands. And that made positioning it tricky: One early Select spot from Omnicom Group's DDB Worldwide, Chicago, urging drinkers to "kiss your aftertaste goodbye" drew vociferous protests from A-B's own distributors, who claimed it was denigrating their other beers. The spots were quickly ditched.

More recent commercials-featuring the brand's crown logo in various urban-hipster settings-have clarified Bud Select's positioning, but they don't seem to be sustaining its growth.

"The issue Anheuser has to deal with is explaining to consumers why Bud Select is special," said Mr. Goldman. "I'm not sure they've done that yet, but they didn't spend $80 million to just throw in the towel and call it a day that quickly, believe me."

Marlene V. Coulis, VP-brand management for Anheuser-Busch, says the brewer is "not pulling back by any means" on Select.

Case in point: Cannonball, St. Louis, last week filmed three Bud Select spots starring 40-year-old A-B scion August Busch IV that are expected to run during the crucial summer beer-drinking season. She said the "nice-looking" brewmaster has the look of a Bud Select drinker.

"He's got the credibility and the image we're looking for," she said.

Ms. Coulis adds that the current performance, including April's tumble, reminds her more of Bud Light than of subsequent brand-extension failures. Following Miller Lite into the fledgling light-beer category in 1982, Bud Light struggled for two years before the legendary "Gimme a light" campaign propelled it to 15 consecutive years of double-digit growth.

Of course, Bud Light's explosive growth owed much to its positioning in a new category that was squarely in line with a calorie-conscious public that still loved beer. It's less clear if Bud Select-an upscale beer at a time when alcohol consumers are trading up for pricier beverages-is the same sort of pioneer.
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