"It all boils down to positioning," said MillerCoors Chief
Marketing Officer Andy England. As other beers get heavier, Coors
Light -- which is marketed as "the world's most refreshing beer" --
is the perfect choice "on a hot day or following a hoppy, malty
brew when you want something that is a little lighter to wash that
down," Mr. England said.
Although they're declining, light beers remain a popular option.
That's true even at Yard House, where Bud Light, Coors Light and
Miller Lite still rank in the top seven draft-beer choices,
according to Yard House data cited by MillerCoors. Still, before
the craft-beer boom, big brewers pretty much had the bar to
The beer market is fragmenting like never before. While in the
old days consumers might stick with their favorite light beer all
night, today they "are drinking more types of beers for different
occasions," switching between crafts, light beers, flavored-malt
beverages and cider, said Bill Pecoriello, CEO of GuestMetrics,
which tracks bar and restaurant trends.
Big brewers are responding by flooding the market with line
extensions and brands that blur the line between cocktails and
beer. A-B InBev this winter will add Bud Light Lime Cran-Brrr-Rita
as a seasonal, adding to the lineup of margarita-inspired malt
beverages that include Lime-A-Rita and Straw-Ber-Rita. MillerCoors,
meanwhile, has put major marketing muscle behind its Redd's Apple
Ale, recently following it up with a strawberry version. "Today's
21- to 27-year-olds grew up expecting variety," said David Kroll,
But as they innovate, brewers are butting heads with liquors,
which have found success with flavorful varieties and
dessert-inspired vodkas like Smirnoff Cinna-Sugar Twist. Beer has
also lost what was once a distinct ad advantage over liquor as
broadcast TV networks relax their rules to allow for more liquor
commercials in late night and the last hour of prime time. Liquor
brands spent $243 million on network, cable and spot TV ads in
2012, up from $145 million in 2010, according to Kantar Media.
Beer's spending grew more slowly in that time, to just over $1
billion from $976 million. And it's liquor brands, not beer,
spawning some of best ad characters and storylines, such as the
continuing Captain Morgan campaign inspired by real-life privateer
Captain Henry Morgan.
Big beer is fighting back with higher-alcohol extensions
targeting nighttime drinking occasions. MillerCoors next year will
launch Miller Fortune at 6.9% alcohol by volume (compared with 4.2%
for most light beers), following the 2012 launch of Bud Light
Platinum, which checks in at 6% and is backed by Justin Timberlake
ads. Will these strategies bring the sexy back to beer? It's too
soon to tell.
LOSING THE BAR
One reason drinkers are switching to liquor is that they see it
as a less expensive way to get higher alcohol content, GuestMetrics
found. This could be one reason why sales trends for beer at bars
and restaurants are so lousy. On-premise beer volumes fell 5.3% in
the four weeks ending Aug. 11, according to GuestMetrics, which is
concerning, Mr. Pecoriello said in a report, especially because of
the slight improvement in underlying volume trends in spirits and
wine in the same period. MillerCoors has found millennials use
social media to meet up at private residences where they drink more
affordably before heading to bars where they down expensive
cocktails. The key for beer, Mr. England said, is to lure young
adults to the bar earlier with light-beer specials.
One path to recovery is to capture more female consumers, who
account for only about 20% of beer drinkers. At last year's beer
wholesaler's convention, A-B InBev North American President Luiz
Edmond conceded that in the past the brewer has been guilty of
portraying women "in a way that they were not necessarily at the
same level" as men. But that is changing as brands move away from
frat-boy jokes and babes in bikinis.
Also, sweeter brands like Redd's Apple are experiencing some
success with women, brewers say.