What Do the Big Guys Not Understand??

I actually liked Bud American Ale, and I thought Black Crown wasn't shabby either. But was it better than most offerings on tap/in bottles at the bars I went to? The answer there is no (or at least mostly no).

 

when i say budweiser, i mean the beer, not the brewery nor the corporation (anheuser busch inbev). i am not surprised that a brewery that can churn out the same thing billions of times can acquire goose island, ten barrel et al and reproduce their products.

i don't like the american adjunct lager style either. there's a much better american lager style that originated in california by german immigrants. if you've not had it, you should try anchor steam!

 

only marketing i need is to hear that its good from someone that knows good beer

 

I would be hard pressed to find a better marketing tool for any product than the movie "Beer Wars" was for craft beer. To this day, including here on this thread, folks have been influenced against BMC, in particular ABI, by the horrors depicted in that film about how **shudder** they use their clout to grab shelf and cooler space, and try to **shudder** make their competition fail. We still think of them as the grinch who stole Christmas despite craft brewing showing double digit increase in sales for almost ten years during a recession and general downturn in beer sales in general. Think about that when you think we aren't being marketed to.

 

The big guys didn't become big by not understanding. The lack of understanding seems to be by some BAs who because they don't like AAL think that those who choose to drink it are inferior beings who have been brainwashed by advertising. The same advertising by the way that you and I watch regularly while remaining totally unaffected .
Beer drinking is subject to fashion trends and of course big beer is aware of what's going on.The problem is they are firmly associated with beers of a certain type, to bring out different beers under the same names might affect their present customer base and not easily attract new business.They are immensely capable brewers and in a craft sense are sleeping giants.Once it becomes worth their while ............

 

If we're gonna count Black Friday as marketing, then that gives us a big increase in the amount of marketing done by craft breweries. Think Hopslam. Think Pliny the Younger. Think KBS. Think lots of seasonal releases because the list goes on.

 

I am very interested on how BMC will address continuing share declines. There is obvious shareholder pressures to deliver share and profit growth. I believe organic growth would be a challenge. Marketing efforts may slow the declines but not yield the increase in sales. Investment in new breweries would be expensive and require time to develop brand. They do have the advantage of financial resources and distribution but may not want to invest the 2-3 years it will likely take to develop and shelf a large scale craft beer line.

That leaves acquisitions. The issue they probably have here is finding targets that are willing to sell and that will "move the needle" as far as sales volume. Unless they can get a Stone, SN, or Sam Adams, BMC will have to make significant cash and time investments to get sales volumes of a regional brewer to a level that would actually show some growth to BMC as a whole.

Tough problem for these guys. I guess that's why these guys get paid the big bucs.

 

Unlike most of us I welcome the entrance to the fine beer market of a brewery system capable of making consistent products, when those consistent products are beers that I love. Maybe they will motivate all brewers, big and small, to accomplish the same with the beers they also produce. I was told by a brewer I highly respect that, in his opinion, if they wanted to, Anheuser Busch could make as good or better beer than any craft brewer now does.

Of course, I will miss the threads here about how this year's XYZ beer is different than last year's, or "Did ABC brewery change the recipe of LMNOP Beer?"

 

I'm quite sure they know exactly what they're doing, the power of advertising is quite obvious, that's why they're globally positioned where they are. You may not like BMC stuff but 10's of Millions do, and they're their target audience, not me schlepping around for IPA's and BA Stouts. And I still buy Miller Lite occasionally, and I detest Bud Light, and Coors Light.

 

I'm not sure that has anything to do with the efficacy of the marketing dollars spent. How does that prove that $450 million provides commeasurate return with, say, spending $200 million?

Sure, the marketing expenditures only total about 1% of AB-Inbev's total revenue, but that doesn't mean it is money well spent. Especially considering it totals about 30% of their net profits.

 

$2x10^8 vs. $4.5x10^8? No, there isn't a commensurate return because of the law of diminishing returns. At what point does the increase in spending not equal the increase in market share, revenue and profit? This is beyond my realm of knowledge, but it's the kind of thing companies like AB Inbev hire people to study, which itself becomes an expenditure to be analyzed.

I think I need a beer.

 

The various BMC companies are taking various approaches to achieve growth of sales/revenue.

MillerCoors has a ‘division’ of Blue Moon that is doing fairly well; see below:



It would appear that as regards craft (or crafty) beer that a preferred approach by AB is acquisitions: Goose Island then Blue Point and most recently 10 Barrels brewing.

AB has also recently produced a number of –Rita beverages which sold well upon initial introduction; I am not sure what the sales are today.

AB also over the past few years introduced new beers like Black Crown and Beck’s Saphir; I have no idea how well they are selling.

Cheers!

 

Heh, that's why I'm hoping a marketing person chimes in. At some point the returns must diminish, but you also run into the problem that any air time you don't buy can be taken by competitors. So you also have to factor in the opportunity cost of NOT buying marketing space.

I'm sure that budgeting marketing dollars is an inexact science, but I'd be interested to know how they account for all the factors when deciding how much to spend.

 

There's not a simple easy answer to your question because there are a lot of "Well, it depends...." factors involved. But there are data out there that are convincing enough to the Big Kids that they are willing to spend the dollars. For much greater detail than that you have to get into the type of adverts (e.g., Newspapers, TV, Social Media, etc., etc.), the message being delivered, the number of repetitions, etc., an anlysis of why some marketing succeeds, and other marketing fails, etc.

If you want more detail I think you'll probably have to go talk to the folks at Wharton.

 

Could you imagine a world in which the bold, underlined, italic phrase took place? (shivers)

 

The very thought that Budweiser isn't light enough, that it needed a Bud Light, and that that marketing plan is thriving will be something that will stump me for the rest of my life.

Those fellas can market. I subconsciously want a wood crated beer box now.

 

If you can put the big time distribution, money and shelf space ability of BMC behind a craft beer, it would make sense that you could grab share in a hurry. Good info. Thanks

 

Too many times on this website I see people complain about BMC not making beer that tastes good to them, and that they should start doing so. Firstly, taste is a very subjective thing. Secondly, there is a large portion of the beer drinking population that does not consume for taste, rather they consume for the alcohol involved. We also gloss over the fact that alcoholism is a very real problem. If everything was about taste, I would venture to guess that "ice" beers would not be around nor would Steel Reserve. However, price per ounce, these people get a cheap buzz.

As someone stated before, we act like these companies are the Grinches that stole Christmas ignoring the fact that the craft beer trend continues to grow enormously. Founder's, Stone, New Belgium, and many others aren't just adding on and building new breweries for the hell of it. Are the major companies out to "steal" customers from everyone else? Yes of course, in a competitive industry that is kind of the point. Continue to drink what appeals to you, and let your neighbor drink what appeals to them.

 

“The very thought that Budweiser isn't light enough, that it needed a Bud Light, and that that marketing plan is thriving…”

I am not a Marketing & Sales person but I think I can postulate an ‘answer’ here.

The first big/nationwide light beer was Miller Lite; Miller Lite was introduced nationally in 1975.

Below is an extract from Wikipedia:

“Miller's early production totals of 12.8 million barrels quickly increased to 24.2 million barrels by 1977 as Miller rose to 2nd place in the American brewing marketplace. Other brewers responded, especially Anheuser-Busch with its heavily advertised Bud Light in 1982, which eventually overtook Lite in sales by 1994. In 1992 light beer became the biggest domestic beer in America.”

It really does not show much genius on the part of the AB Marketing & Sales force from a product introduction perspective. Miller was the first to address the light beer market but AB after a period of 7 years (which is pretty long in my opinion) decided to also service the light beer market. I suppose you must give the AB Marketing & Sales folks some credit that through advertising they became the light beer market leader by 1994 (19 years after the introduction of Miller Lite).

Cheers!