Strategies to Battle Craft
Looking at the biggest-selling brands in the country, the message once again seems to be that mainstream lager may outsell every other style of beer—by a lot—yet the wind continues to go out of the sails. But If you brew hundreds of millions of cases of beer in a year, does it matter if sales are a point or two lower than they were last year?
At MillerCoors, it mattered enough to warrant a big shake-up at the top of the company. According to spokesperson Marty Maloney, “Interim CEO Gavin Hattersley has made it clear neither he nor the company’s board has been satisfied with volume performance for some time, and as such, appointed a new chief marketing officer (David Kroll) and president of sales and distributor operations (Kevin Doyle).”
Although both Coors Light and Miller Lite have grown relative to similar brands in their segment, “The company is working hard to achieve both share and volume growth, and as such, plans to significantly increase investments in the second half of this year behind our Premium Light brands,” Maloney adds.
The company is bringing back the 1975 Miller Steinie bottle this fall. At the same time, “Coors Light will launch its ‘Always Game Ready’ football program with retail, social/digital, out-of-home and local experiential components,” Maloney says.
If the retro feel and the nostalgic connection to sports sounds predictable, that may be a winning move: Coors Banquet, its old-school brand, is on track for its ninth straight year of growth.
Earlier this year, Anheuser-Busch took an eyebrow-raising approach to rebuilding Budweiser numbers. Instead of warming hearts with the Clydesdales, Bud’s 2015 Super Bowl ad sneered at craft beers and their drinkers, portraying both as effete and precious.
The ad naturally caused indignation in the craft beer community, mixed with accusations of hypocrisy—particularly since A-B had just announced the purchase of Seattle’s Elysian Brewing, known for precisely the sort of beers the ad mocked. A-B clearly calculated that it could afford to offend craft beer lovers, so long as the ads reinforced the loyalty of wavering Bud fans with its “us and them” message.
Beer Trends in Store
Retailers notice fluctuations in the fortunes of American beer brands, even as these domestic lagers are still the most popular beer choice with consumers. “Our number-one seller is Miller Lite 30-packs, hands down, out of everything in the store—beer, wine, liquor,” says James Campbell, the beer department manager at Bay Ridge Wine & Spirits in Annapolis, MD. “But going over the numbers from previous years, we are noticing a decline in sales on domestic kegs.”
Perhaps less is more: “A lot of people who are used to grabbing a 30-pack, now they’re only getting an 18-pack,” Campbell says, “and they’re grabbing a six-pack of craft, because craft is just through the roof right now.”
Large packages with low prices were cited repeatedly by retailers as the big brewers’ greatest strength. Hazel’s Beverage World in Boulder, CO, caters to both university students on tight budgets as well as fans of the town’s 20 craft breweries.
“The big brands have definitely slowed down,” says Derek Ridge, the store’s beer manager. “The one domestic that keeps going is Pabst in 30-packs. They’re pretty strong.”
But in smaller package sizes, Ridge has noticed that some craft brands can compete with American lagers even on price—within limits. “You can get a good 12-pack of Sierra Nevada or Avery for pretty much the same price as Budweiser,” he notes.
“Sure, it’s a little bit more, but it’s not much of a difference any more,” Ridge adds. “The price is competitive, and people like the 12-packs of craft a lot.”
If low prices appeal to budget-minded consumers—many of them young—this is also the same audience that gets credit for leading a shift from American domestics to craft beer, according to Jamie Piastuch, the beer consultant at the Merritt Island, FL, branch of the ABC Fine Wine and Spirits chain.
“Bud Light is still huge,” she notes, but Millennials are almost exclusively drinking craft beer. “Millennials like experimenting; they like trying new stuff,” Piastuch says.