Tuesday, June 1, 2010

Too Big to Succeed.

There has never been a better time to be a beer drinker.

Microbrews, brewpubs, seasonals and regional brands have provided those of us who like our beverages malted with an almost infinite array of options. From cheap lagers to finely crafted ales, there's a beer for every taste and budget.

Which is why there has never been a worse time to be a mass producer of beer.

According to Ad Age, Bud Light and Miller Lite, two of the best-selling beer brands in the country, saw their sales fall 5.3% and 7.5% over the past four weeks. That's significant, especially since this is the lead up to the height of the beer selling season and both brands have been spending heavily on advertising. Interestingly, Coors Light sales also declined, but only .5% while beer sales overall have fallen 4%.

So what's going on here?

First of all, as evidenced by my recent trip to Woodman's, home to one of the largest beer selections in the world, there are a lot of choices out there. Just as all those new cable channels are eating into the networks' ratings, Bud and Miller/Coors are getting nibbled to death by ducks. No one brand is taking it to them, but when beer drinkers try something new every so often, Bud and Miller lose the most since they're the big players.

Second, in a recession people look for two things: value and quality. Miller and Bud offer neither. There's nothing special about them and they aren't the cheapest beers in the case. So if I want something interesting I might pay a little more and pick up a six of Bell's Two-Hearted Ale. Conversely if I'm looking to fill the cooler with a lot of beer for the guys, I might grab a couple of cases of PBR and save a few bucks. What I won't do is spend a lot of money on a bland beer.

Finally, there's the millions of dollars they waste every year in marketing. Miller Lite sells us crap like the Vortex bottle and Bud Lite continues to try to win us over by making us laugh. Neither brand owns a true benefit that's meaningful to the consumer. At least Coors Light is focusing on refreshment, something we hope to get when we drink a beer. Maybe that's why their sales have fallen the least of the three big brands.

Bud, Miller and Coors took over the market when people thought all beer was pale and flavorless. Now that they know it can be so much more, the Big Three's long slow slide is inevitable.

3 comments:

  1. How does this compare to the wine mass market in the 70's and 80's?

    ReplyDelete
  2. It's probably very similar. Great analogy. If I were in the beer business, I'd be studying it.

    ReplyDelete
  3. PBR and I have a special relationship.

    ReplyDelete