"I've never seen so much red ink on a spreadsheet in all my years
in this business," said Harry Schuhmacher, publisher of Beer
Business Daily, of the figures, which account only for food, drug
and convenience stores. "It's really disconcerting."
What's happening? People are drinking less off the stuff.
Industry shipments are down 4%, according to the Beer Institute.
Several factors play into the trend, key among them the recession.
MillerCoors Chief Marketing Officer Andy England said that
unemployment remains particularly pronounced among the 21- to
35-year-old men who are the primary targets of beer companies, and
also among Hispanics, another key segment. In many cases, they're
opting for cheaper brews, or saving their consumption for a special
occasion by splurging on craft-style beers. As a result, the
"premium" lights are being squeezed by moves in both
Consider: Anheuser-Busch's Bud Light, the largest U.S. brand, is
down 5.3% year to date, and the drop is in comparison to 2009, the
first negative year in the brand's 28-year history. It's no less
grim at No. 2 U.S. brewer MillerCoors, where the company's leading
lights, Coors Light and Miller Lite, are down 0.5% and 7.5%,
Neither A-B nor MillerCoors can afford to let its biggest and
most important brands keep bleeding. Bud Light accounts for nearly
40% of A-B's U.S. shipments, and Coors Light and Miller Lite equal
about half of MillerCoors'. Kantar Media reports that Bud Light saw
$219 million in measured media support last year; Coors Light saw
$152 million and Miller Lite $134 million. Those outlays are in
addition to the brands' numerous and pricey sports-sponsorship
Naturally, both brewers are pulling out all the stops this
summer with everything from special bottles to ramped-up spending,
hoping to at least slow the declines.
Bud's new spots
A-B is readying six new Bud Light TV spots under the "Here We
Go" tagline it started using for the Super Bowl (to replace its
failed "Drinkability" campaign), and it is increasing its
activities in the digital arena, according to VP-Marketing Keith
MillerCoors is also boosting its budget behind Coors Light and
Miller Lite, but much of its focus will be on product innovations
intended to emphasize the brands' respective focus on cold
refreshment and great taste. There will be a new Miller Lite
"Vortex Bottle" (which supposedly unlocks flavors and aromas in the
beer by aerating it as it pours) and to get the cold train moving
again, a Coors Light 12-pack with a window that lets would-be
purchasers see if its temperature-sensitive color-changing bottles
But even as executives at both brewers express optimism about
those plans, they acknowledge that returning their brands to growth
will not be easy. Part of the problem with the premium lights has
been of the brewers' own making.