"For a long time they got distracted," says Tom Pirko, president of consultancy Bevmark, referring to the chasing of the Ices, Drys, ambers and microbrews by the major marketers. "But now it's a time of advertising and using advertising to push around smaller brands."
The stakes are high. Market share has been seeping annually from these brands. The No. 1 beer, Budweiser, dropped 0.5 points in '96. That's about 640,000 bbls. in a stagnant market that grew just under 1%; fortunately for A-B, what Budweiser lost, Bud Light, the market's No. 2 brand, gained.
Refocusing on core brands has meant heavy discounting by A-B and Miller, especially this summer, and strong promotional activity at Coors. But the big picture is dominated by media support of core brands-at the expense of new and/or alternative brews.
A-B, Coors and Miller spent $148.7 million advertising their beers during the first quarter of 1997, up 15% from the year-earlier period, according to Competitive Media Reporting, and this after media spending industrywide fell 2.9% for full-year '96.
During this year's first quarter, their best sellers-Budweiser, Miller Lite and Coors Light-received $89 million in media, or 60% of total spending, according to CMR. During the year-earlier period, those same brands attracted $55.9 million in spending, or 43.2% of total expenditures.
Such spending seems to be bearing fruit, at least in supermarkets, which account for 15% of beer sales. Bud's dollar share in supermarkets, for example, increased 0.2 points to 13.5% of market for the 52-week period ending June 20, compared with the year-earlier period, according to Information Resources Inc. Miller Lite rose 0.7 points to 7.6% and Coors Light, up 0.3 points to 6.7%.
During that same time, Bud's dollar volume rose 3%, Lite 12% and Coors Light 6%, according to IRI.
RED DOG GAMBIT
Miller, a unit of Philip Morris Cos., spent much of the '90s trying to gain market share with new brands like Red Dog. But the new hopes turned into money pits.
In late 1996, Miller retrenched to bet on its best-selling Lite and Miller Genuine Draft beers, hiring two new agencies- Fallon McElligott for Lite and Wieden & Kennedy for Genuine Draft-to inject new life.
The brewer pushed up ad spending, apportioning $38.7 million to Lite during the first three months of 1997, up 72.3% from the year-earlier period, according to CMR. Genuine Draft got $12.1 million in the same period, up 119.1%. Miller Beer and Red Dog spending hit bottom.
Miller intends to back Lite by squeezing more leverage out of its National Football League sponsorship, such as running multiple NFL-themed Lite spots during the season in addition to three promotions.
"We're going to look to support those brands just as aggressively next year," says Jack Rooney, VP-marketing.
KEPT FLAGSHIP FOCUS
A-B never pursued marketing will-o-wisps with as much abandon as Miller, and kept spending high for its flagship, Budweiser. That support has increased substantially, to $38.6 million during first quarter '97, up 44.5% from the prior-year period.
"We stayed very focused on core brands [during the period]," says Bob Lachky, VP-brand marketing for A-B.
A-B, at the same time, kept Bud Light at a strong $18 million in advertising, up 0.5%. Meanwhile, A-B pared spending to the bone on Red Wolf and Michelob.
A-B also has been backing its flagship on a grass-roots level by instructing its sales force to push Budweiser to bars more aggressively.
Coors turned away earlier than others from the creation of new premium beer brands, a project both expensive and risky.
The brewer in first quarter '97 spent $11.8 million on Coors Light, flat from the year-earlier period, but up 61.4% from first quarter '95, according to CMR. The brewer also began to pump up spending for Coors Original a year ago.
The brewer has been supplementing ad support with promos such as baseball-bat-