Uncanny understanding of the nuances of industry and target market separate brewer from the pack

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Legend has it that when a boy is born into the Busch family, the first thing into his mouth is a dab of Budweiser. Such wholesale devotion to the Anheuser-Busch name has helped make A-B the undeniable king of beer marketing.

That, funny ads, family control and cautious line extensions have helped the brewer become not only the largest in the U.S. but anywhere on the planet.

"Basically as far as that category goes, there's A-B, and there's everybody else," says one adman close to the company.

What a difference a century makes. In the late 1800s, when German immigrant Adolphus Busch made his foray into yeast and barley, America's beer drinkers were serviced by regional brewers with shoddy quality control. Mr. Busch realized the way to nationwide beer-dom was by making a consistently good brew.

He "wanted to fix the product, and that wasn't PR at that point. [It was] `I want to have the best,' " says Philip Van Munching, author of the 1997 "Beer Blast," a humorous, in-depth look at how marketing drives the beer business. "He made his beer very big, very fast."


He also relied on aggressive pricing and a deep understanding of the business -- both of which continue to mark the company. That resulted in A-B's becoming the first nationwide brewer in the 1950s and attaining the top market share position in 1957.

It hasn't looked back since and -- with 46.6% market share -- is well on its way to the desired 50%-plus figure, doing so with careful product evolutions that haven't diluted the brand.

Case in point: light beer. While Miller Brewing Co. got the reduced-calories-beer ball rolling with Lite in 1975, A-B waited until the category's success was assured and jumped in with both very large feet in 1982.

"Because they have the size to do that, they don't have to take any huge pratfalls," Mr. Van Munching says. "They wait to see what other categories will work before jumping into them wholeheartedly. Look at Coors -- it came up with Zima . . . a terrible disaster that they spent a fortune on."


With decades of majestic Clydesdales, humorous amphibians, as well as ads that ranged from heritage to "I love you, man," A-B has moved to the pinnacle of beer advertising.

"The gold standard for advertising is Bud Light," says a competing beer adman.

Industry insiders note that while A-B may not have launched beer advertising, once into it, the company did it with its usual fervor and tactical precision, often to the consternation of ad agencies. Never swaying from its desire to reach its core audience, twentysomething males, A-B was a pioneer in sports sponsorship and event marketing, taking the concept to what now seems excess, crafting the "Bud Bowl" series for the Super Bowl.

"We do have a bit of omnipresence at sports events through signs and advertising," says Bob Lachky, VP-brand management. "You're there in good times and in bad -- kind of like a good friend. We're not the kind of brand that jumps on the next hot thing. We've always been there."

There remain problem areas, however. Budweiser continues to lose share, albeit more slowly. Indeed, Bud Light may actually topple Bud as America's No. 1 brand in supermarkets.


Still, the brewery giant "realized early and never waivered from the belief that advertising sells their product. Even when the product wasn't that great, they put money behind it," says a longtime executive familiar with the brand.

In addition to ads that have viewers holding their sides, A-B taps into their emotion, said the competing beer adman.

"It's the working-class man," he says. "They kind of identify with that psyche. It's being your own man, actually accomplishing something, working with your hands -- all classic American values. Bud has tapped into that better than anybody."

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