Brewers are advertising economy brands less: Measured-media
spending on the five largest low-end brews -- Natural Light, Busch
Light, Busch, Miller High Life and Keystone Light -- fell to $6.9
million last year from $22.4 million in 2011, according to Kantar
Media. That compares with the $32 million that Anheuser-Busch InBev
spent last year launching Bud Light Platinum. Redd's Apple Ale,
introduced by MillerCoors this
year, is getting a similarly hefty push, while the brewer last week
launched the first national TV ads for Leinenkugel's that spotlight
its lemonade-flavored Summer Shandy offering, whose sales soared
90% last year, according to the brewer.
Add in the fact that the economic downturn hurt blue-collar
drinkers the most and the result is that the sub-premium segment
has been on a long-term slide, falling to 13.5% in 2012 from 15.7%
of beer sales at supermarkets in 2009, according to SymphonyIRI.
During the same period, craft-beer sales grew to 11.9% from 8.3%,
while so-called superpremium beers, like Blue Moon and Shock Top,
jumped to 10.7% from 9.1%.
How has beer been able to get consumers to trade up in a
sluggish economy? "It comes down to emotional engagement," Trevor
Stirling, a beverages analyst at Sanford C. Bernstein, said.
"Consumers are much more likely to "brand' themselves by what they
drink, be it a quirky, heavily hopped IPA, or a "sophisticated'
Stella; whereas Natty Light and Beast Light have, if anything,
negative brand badging."
New drinkers -- think Joe College -- are a lot more experimental
than they used to be, sampling craft beers, cocktails and flavored
malt beverages, rather than relying on the same old Keystone or
Natural Light. Younger drinkers "grew up with so many different
flavors that it's not unusual for them to want to try different
things," said Dan Wandel, SymphonyIRI's senior VP-beverage alcohol
Marketers have also spurred the shifts by hiking prices on
subpremium brands. A-B InBev for the past few years has been
closing price gaps between mainstream beers like Bud Light and its
value brands in an effort to rebalance its portfolio -- and the
American beer market at large -- toward premium beers. "Our
strategic intent is to grow our share of the value segment, but
without growing the segment itself," said Edison Yu, VP-value
brands at A-B InBev.
Still, big brewers cannot risk alienating economy drinkers for
fear of losing them to cheap liquor or smaller beer brands like
Pabst Brewing Co.'s Pabst and Old Milwaukee, whose locally
targeted, quirky Will Ferrell ads have gotten a ton of free media
There are signs that A-B InBev and MillerCoors this year are
paying a bit more attention to their low-end brands, rolling out
new packaging, campaigns and promotions. The goal is to protect
share in a segment that still accounts for 18.4% of dollar sales,
according to SymphonyIRI. Although declining, the segment is still
larger than imports (14.4%) and crafts (5.4%).
"When you are a big mega-brewer like [A-B InBev] or MillerCoors,
you are looking to be all things to all people," said Benj
Steinman, president of Beer Marketer's Insights. "And if
subpremiums are 20% of the business, you damn well want to play
there." Economy brands are more about "fast nickels" than a "slow
dime," said Ashley Selman, marketing director-economy brands at
MillerCoors. "We make less per barrel, but we sell a lot of
As they narrow their focus, value brands are zeroing in on core
drinkers. Keystone Light is replacing its "Keith Stone" ads that
targeted younger drinkers with a partnership with
tournament-fishing organization FLW. Its mostly in-store campaign
targets Walmart-shopping, middle-age drinkers.
Busch is seeking to hook more anglers with a limited-time promo
this spring in which 50,000 special "fishing-lure" cans will be
randomly inserted into cases. Fans who upload pictures of the cans
to the Busch Facebook page can win prizes, including a fishing trip
with star angler Kevin VanDam.
Miller High Life is launching a campaign that plugs the beer's
role in "everyday celebrations," teaming with Harley Davidson for
in-store promotions that tout the fact that both brands are turning
110 years old this year.
Despite the competition from crafts, economy brands are not
giving up on younger drinkers. A-B InBev's Natural Light, which
targets college-age consumers, is seeking to stand out with new
"stubby" bottles, dubbed "Fatty Natty," rolling out nationally.
MillerCoors is targeting hipsters with its Hamm's brand via
The brew is part of the marketer's "classic" economy-brand
lineup, which is meant to compete with crafts. "These guys are
still challenged by the economy," Ms. Selman said. "And they don't
have the money to buy crafts all night long."