News What's killing Big American Beer?

Discussion in 'Beer News & Releases' started by Todd, Jul 4, 2018.

  1. Todd

    Todd Founder (5,603) Aug 23, 1996 California

    Basically. Plus many beer drinkers are exploring other alcoholic beverages, which are capitalizing on the concept and success of "craft."
    No big surprises, but worth a read.
  2. bbtkd

    bbtkd Poo-Bah (2,065) Sep 20, 2015 South Dakota

    I wonder what drastic measures big beer might resort to if the slip continues, since they surely won't stand idly by as they lose market share. For instance might they try making their beer look more like craft, as with Key Stone? Might they accelerate their purchasing of craft breweries? Might they step-up up their muscling of distributors and retailers to give them more visibility? Might they try buying more craft websites?
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  3. jesskidden

    jesskidden Meyvn (1,335) Aug 10, 2005 New Jersey

    "Americans" are? So, whose drinking all that Bud Light, Coors Light, Miller Lite and Budweiser - illegal aliens and tourists? AB and MC together still control 2/3 of the US beer market. Those 4 flagship beers alone, losing market share as they are, make up over 1/3 of the beer sold in the US.

    Well, technically they are the brewer of those beers (granted, they are also licensed to distribute in a dozen or so states, as well, but their primary business in brewing not distribution).

    Nitpicky? Yeah, maybe - but shouldn't a US business magazine have a basic understanding of the industry they're writing about? I mean, who's going to take investment advice from a publication which doesn't know the difference between a producer/brewer and a distributor?

    And "ditto" for this comment --- plus Constellation Brands is headquartered in Victor, NY. They do own breweries in Mexico, where they brew Corona and other Modelo brands for the US market, just as they own wineries and distilleries in the US and elsewhere in the world.
    #3 jesskidden, Jul 4, 2018
    Last edited: Jul 4, 2018
  4. JackHorzempa

    JackHorzempa Poo-Bah (3,649) Dec 15, 2005 Pennsylvania

    From the article:

    “The big four US brands — Bud Light, Miller Lite, Coors Light, and Budweiser — have been hit particularly hard.”

    And (with bold emphasis provided by me):

    “Corona time

    Americans are still drinking beer -- just better beer. The premium end of the market is growing faster than the bottom portion.

    "There's a huge shift toward higher end beer," Ottenstein said.

    Constellation Brands (STZ), the Mexican-based distributor of Corona, Modelo and Pacifico, has capitalized on Americans' love for imported lagers. Shipments from Mexico, the largest beer exporter to the United States, were up 9.5% through May, the Commerce Department said.

    Constellation is now expanding with new lines such as Corona Premier and Corona Refresca.”

    Hopefully I am not the only person who sees an ‘issue’ with the utilization of the verbiage “better beer” in the above paragraph.

    The beers of Bud Light, Miller Lite, Coors Light, and Budweiser are AAL beers.

    The beers of Corona, Modelo and Pacifico are predominantly AAL beers (some of the brands are American Amber Adjunct Lagers).

    I recognize (and anticipate that somebody(s) will comment) that “better” is a relative term but c’mon, Corona is not a “better” beer than Budweiser.

    The continuing growth of beers like Corona are not because the beer in the glass (or can) is a “better” product but because the beer is marketed as being a ‘premium’ product and consumers are buying in to this marketing.

    Generally speaking the companies of ABI and MillerCoors are astute marketers but in this instance they are getting ‘schooled’ by the companies (or importers) of Mexican AAL beers.

    Perhaps the recent introduction of Michelob Ultra Pure Gold with the marketing shtick of being organic is ABI’s way to encroach into the ‘premium’ beer market?

    I don’t have the ‘answer’ here (and apparently the highly paid marketers of ABI and MillerCoors don’t either) but if they could convince beer consumers to buy beers like Bud Light, Miller Lite, Coors Light, and Budweiser vs. buying Corona (which costs more) then they will improve their bottom lines.

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  5. jesskidden

    jesskidden Meyvn (1,335) Aug 10, 2005 New Jersey

    Oh, that's an easy one - the beers are "Better" - for the brewer's bottom line and their investors, 'cause they cost more :grin:.

    A friend of mine used to sell high end audio equipment in NYC, and his rich customers would sometimes ask:
    "So, why is this system $10k and that one $13.5k?"

    "Well," he'd say, "That one is better than this one..."
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  6. drtth

    drtth Poo-Bah (3,636) Nov 25, 2007 Pennsylvania

    You may well be in the minority in seeing a problem with the usage of "better beer" given how many BAs and others involved with craft beer in general talk about craft beer as being better beer. :sunglasses:
  7. JackHorzempa

    JackHorzempa Poo-Bah (3,649) Dec 15, 2005 Pennsylvania

    Well, here is the thing. The $13.5k system may indeed be better and this can be distinguished by reading the specs. For example lower THD (Total Harmonic Distortion) and other parameters. Now, are this better spec values worth the extra $3.5k? No easy answer there.

    Needless to say I am an 'outlier' but when it comes to Corona the whole concept of putting a beer into a clear bottle (which is less ideal from a brown bottle as regards skunking), shoving a piece of fruit into and simultaneously charging more for it is a 'bridge too far' for me.

    The fact that beer consumers are willing to buy beers like Corona and sales growth is occurring means that beer consumers do indeed want to buy AAL beers. Both ABI and MillerCoors need to do a better job here or else they will continue to see declining sales of their AAL beers.

    Maybe Michelob Ultra Pure Gold will be a 'winner' for ABI but I have my doubts. My 'interpretation' of the marketing strategies of ABI and MillerCoors for selling their AAL beers has been a combination of inane commercials (Dilly Dilly anyone?) and new product introductions via "let's just throw something against the wall and see if it sticks" approach.

  8. JackHorzempa

    JackHorzempa Poo-Bah (3,649) Dec 15, 2005 Pennsylvania

    My commenting was solely in the context of what I quoted above under the "Corona time" section of the article.

    Do you think that Corona is "better" than beers like Budweiser?

  9. laketang

    laketang Savant (962) Mar 22, 2015 Illinois

    For those of you that dont get to europe, i have been to Paris France a number of times, and while i cannot speak for all places, the ones I've gone into do not have Miller lite, bud or bud lite, or Coors. I have only seen imports like Heineken, German beers and their domestics. So they aren't selling there .
  10. drtth

    drtth Poo-Bah (3,636) Nov 25, 2007 Pennsylvania

    And my comment was to expand into the broader context that lots of folks talk about lots of beers as being "better beer" whether it is Corona as in the case of the Author using Corona as an example of "better beer" or in the case of a BA using the example of PtE as being a "better beer."

    Do I think Corona is a more enjoyable beer that Bud Light Lime-o-Rita? Yes. Better? From the stand point of personal enjoyment, yes I'd say it's better than Bud Light Lime-o-Rita.
  11. JackHorzempa

    JackHorzempa Poo-Bah (3,649) Dec 15, 2005 Pennsylvania

    Which is contrary to what I posted.
    Do you have a response to the question I posed vs. the question you posed?

    "Do you think that Corona is "better" than beers like Budweiser?"

    The "Budweiser" term in the above is intended for an AAL beer (e.g., Budweiser itself).

  12. jesskidden

    jesskidden Meyvn (1,335) Aug 10, 2005 New Jersey

    So, your answer for the OP question of "What's killing Big American Beer?" is:

    "The French." ? :thinking_face: Kinda doubt that AB, Miller or Coors, pre-international mergers, ever had much market share in Paris to begin with.

    But, according to the ABInBev-France website:
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  13. drtth

    drtth Poo-Bah (3,636) Nov 25, 2007 Pennsylvania

    I never said it was better or worse and my point was not about what I think. Rather it was about what others think.

    Lots of people use the phase in exactly the same way as the author talking about many beers, including talking about AALs on this site.
  14. dennis3951

    dennis3951 Champion (829) Mar 6, 2008 New Jersey

    Not better beer just "premium priced" beer.
  15. laketang

    laketang Savant (962) Mar 22, 2015 Illinois

    Thanks for your insightful info
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  16. Shanex

    Shanex Champion (839) Dec 10, 2015 France

    Ah! @laketang was making an observation about what he saw being distributed in parts of Europe. To back up ABinBev France claim being third on the market; I’m not surprised since many many people here drink Leffe. It’s fairly cheap and still considered a « good » beer. I still buy it frequently for the price of its 12 or 24 packs.

    About Murica; I agree with Todd no big surprise in this article. Drinking better are we? The price of the beer(s) will forever be the heart of the issue and I reckon Sierra Nevada to cite one example can be found at a fairly interesting price for the quality and variety of its products. Prairie and Clown Shoes while also having exceptional beers are at least here around $10 for a single 12oz bottle... etc

    Happy 4th of July, btw.
    dennis3951 likes this.
  17. woodchipper

    woodchipper Savant (981) Oct 25, 2005 Connecticut

    I know everyone is serious here, but the best quote if you skim the article after a few beers- "You now see a much more promiscuous alcohol consumer."
  18. Bitterbill

    Bitterbill Poo-Bah (6,172) Sep 14, 2002 Wyoming
    Premium Trader

    "I wonder what drastic measures big beer might resort to if the slip continues, since they surely won't stand idly by as they lose market share."

    Change their packaging? Hit us with some highfalutin commercials?
  19. laketang

    laketang Savant (962) Mar 22, 2015 Illinois

    My backfired misguided attempt to also point out that their beer wasnt being drank in places that i have been outside of America. Oh well, some people just want to tear apart things other people offer up here . I'll go back in my hole. But on a side note, sales for bud are down in US 1.3% in first qtr, but up 2.5 percent in rest of world. We are drinking less big beer, but somewhere out there sales are up. I just dont know where.
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  20. JackHorzempa

    JackHorzempa Poo-Bah (3,649) Dec 15, 2005 Pennsylvania

    Do you know what the US vs. rest of the world statistics are as regards revenue/sales?

    Being up 2.5% but not bringing in much revenue is not as great of an increase. In contrast a loss of 1.3% in the US can represent a HUGE loss of money.

    SABERG likes this.
  21. spongebob2

    spongebob2 Initiate (97) Feb 8, 2018 Tennessee

    Maybe a regional thing but retailers play a hand in this? (shooting big beer in foot) I moved about 2 years ago from central Il to sw TN. Have drank BL and other AB products for years. AB stuff seems to carry a premium here. Recently tried Keystone- doable & other cheap "crap". Craft local stuff on the other hand is reasonable.
  22. laketang

    laketang Savant (962) Mar 22, 2015 Illinois

    I think that that 2.5% amounts to a saving grace for them BECAUSE the US sales are down. And I posed a question that has not been answered. What main markets outside the US are the main reason for said 2.5% increase, which is helping fight saging US sales because we don't drink as much of their beer as before.

  23. Zorro

    Zorro Poo-Bah (4,274) Dec 25, 2003 California

    Has a radical idea. Make beer that tastes good!

    Not just IPA either. NOT very hard to make a respectable Hefeweizen. Just takes the correct yeast and brewing temperature.
  24. MNAle

    MNAle Meyvn (1,012) Sep 6, 2011 Minnesota

    AB Inbev already brews a good hefe:
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  25. donspublic

    donspublic Poo-Bah (1,588) Aug 4, 2014 Texas
    Premium Trader

    Out of the whole thing this is the part that stuck out to me
    This tails back into another thread that linked to the book being written about Goose Island buyout. Below pulled from paste article about Josh Noels book.
    So they are still working on the occasions marketing.....
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  26. jesskidden

    jesskidden Meyvn (1,335) Aug 10, 2005 New Jersey

    Anheuser-Busch InBev First Quarter 2018:

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  27. laketang

    laketang Savant (962) Mar 22, 2015 Illinois

    There it is. Latin America and Asia. So the overall AMERICAN beer market 111. Billion, and craft beer market 26 billion.

    The majority of America's beer drinkers would rather drink beer from those big American breweries than the very ( to them ) strong, bitter craft beers of craft.

    So we are not killing big beer , just breaking their arm.
  28. gopens44

    gopens44 Poo-Bah (2,177) Aug 9, 2010 Virginia
    Premium Trader

    I think it may be a bit more simple. The “belly up” after work blue color crowd has been disappearing for decades. Perhaps that generation of drinker has just become less prolific. I’d also bet there’s some correlation to be made between factory workers (as in % of the workforce) and consumption. Despite the fear that I’ve already labored the point to some degree, I’ll further muddy it....... I grew up in a heavy UAW town that had an impressive number of bars. Impressive number. Over the past 25 years the plants have closed, and more than half the bars have as well despite the population remaining somewhat similar.

    Nothing I have rambled on about has any science behind it, but my point is that the significant purchasers have become a dying breed.
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  29. jesskidden

    jesskidden Meyvn (1,335) Aug 10, 2005 New Jersey

    Yeah, that's where ABI's Budweiser recent growth is (along with the future of the worldwide brewing industry growth, of course) - but Budweiser's also got impressive share numbers in the shrinking beer markets like the UK, Ireland and Canada - considering that they are markets where it didn't really exist a few decades ago.

    Or, measured by volume (2017 Brewers Assoc. definitions and figures):
    • Craft = 12.67%
    • Imports = 17.54%
    • US Non-Craft = 69.79%
  30. EvenMoreJesus

    EvenMoreJesus Champion (839) Jun 8, 2017 Pennsylvania
    Premium Trader

    Answer: Nothing

    Although certain brands may be waning in popularity, which is normal for any brand over time, the parent companies are doing just fine.
  31. laketang

    laketang Savant (962) Mar 22, 2015 Illinois

    I just simply think that if it were a ballgame and the other team was up by 3 scores, but we were gaining some ground, we aren't killing them.either way, I no longer enjoy their beer ( big beer ) but many still do. Those are good solid numbers, thanks for the info, I am here to learn from those who know , still a pretty new hobby for me.
  32. MNAle

    MNAle Meyvn (1,012) Sep 6, 2011 Minnesota

    AB-Inbev has made worthwhile improvements (IMO) in the packaging and freshness of some of their imported European brands.

    They would do well (again, IMO) if they emphasized those improvements across their line of the more impressive brands of European beers. This may allow them to become a bigger player in the USA "imported" category. I'm thinking of such brands as Franziskaner, Hoegaarden, Spaten, Stella Artois. and Löwenbräu.

    Make all of them available in cans (ditch the green bottles), emphasize freshness in their shipping, etc...
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  33. EvenMoreJesus

    EvenMoreJesus Champion (839) Jun 8, 2017 Pennsylvania
    Premium Trader

    I, too, believe that this is a segment of the market that is ripe for a resurgence with the right changes, as you've partially detailed.
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  34. TongoRad

    TongoRad Poo-Bah (2,480) Jun 3, 2004 New Jersey
    Premium Trader

    In other words, more people are opening their eyes to what's been going on all around them this whole time. This dynamic actually helps people like us, who will find it easier to get what we prefer.

    Just a quick example: within the past 6 to 9 months I've noticed that the Amaro (bitters) segment of the market picking up steam, and more choices than ever before at my local shops. Now, in some sense this may concern the Campari and Ramazzotti folks because I am getting more choice; but that's gotta be more than offset by there being an increased overall market for the stuff.
    EvenMoreJesus likes this.
  35. rgordon

    rgordon Champion (852) Apr 26, 2012 North Carolina

    Not me. A cold Bud is way better that any Corona I have ever had.
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  36. MNAle

    MNAle Meyvn (1,012) Sep 6, 2011 Minnesota

    Are you sure the author was not talking about what happens after closing time at the bar? :sunglasses:
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  37. woodchipper

    woodchipper Savant (981) Oct 25, 2005 Connecticut

    I know the author meant. I just found the other interpretation more entertaining.
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  38. Ranbot

    Ranbot Zealot (544) Nov 27, 2006 Pennsylvania

    Asia/China is a major growth market.
  39. lordofthemark

    lordofthemark Aspirant (225) Jan 28, 2015 Virginia

    It seems like the big four brands - Bud, But lite, Miller lite, and Coors lite, are all declining in the US market. But that's really several different phenomena. 1. Beer overall is losing to wine, spirits, and FMBs. 2. AALs as a group are losing to craft, which grows even as beer declines overall - and there is no need to quibble about the BA definition, because craft is growing whether or not you include breweries like Goose Island, or beers like Blue Moon. 3. Within the AAL category , the big 4 are losing share, mostly to Mexican imports , but also to BMC premium offerings. This suggests a multipronged response by ABI and MC, I think .
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  40. BayAreaJoe

    BayAreaJoe Zealot (574) Nov 23, 2017 California

    When I went to the big county fair this year, I notice that it seemed like EVERYONE was either drinking Corona or Modelo. The only craft option was big bombers of SN Torpedo; it was all big beer and big beer's craft like Goose Island and Kona Brewing (Golden Road even had a booth). But it was certainly noticeable that there was way more Coronas and Modelos in hands than anything else.