When you’ve lived through a quarter-century of constant losses, you take your victories wherever you can. Even the smallest ones become big deals, no matter how much they end up costing you.
As we reported here back in September, Budweiser beer, owned by AB InBev, has had more than its share of market share losses.
For example, flagship brand Budweiser, with an 8.4% share of market last year (and second to Coors Light), is but a shadow of its former, more-than-25% share, self.
This year, they employed two marketing strategies to regain “millennial drinkers who have increasingly switched to spirits brands, especially for nighttime drinking occasions,” according to Advertising Age.
One of these strategies was heavy investment in hip-hop concerts and celebrity spokesman Jay-Z, culminating in a Labor Day weekend “Made in America” hip-hop festival in Philadelphia.
Another was to kinda sorta get into the craft beer business, with Project 12 – sample packs of three pseudo-craft beers brewed by Budweiser’s regional brewmasters. These beers were generally darker in color, one-fifth higher in alcohol content (6% alcohol by volume [ABV] vs. 5% for regular Budweiser), and pricier.
Now, AB InBev is doubling down on them.
Doubling down on hip-hop
Since hip-hop concerts exposing millennial males (your classic Pareto distribution, 80/20, heavy-user beer consumers) to Budweiser signage apparently wasn’t an expensive enough irrelevancy, the brand is in the process of turning the concerts into a feature-length movie – directed by Ron Howard, no less.
This epic will be “a reflection of the fabric of what it means to be Made in America — what the festival represents, why Jay is doing it and how he relates to each artist,” Howard told The Hollywood Reporter.
How it relates to selling beer is anyone’s guess.
Doubling down on “craft” beers
The start of next year, and with possible help with Super Bowl advertising, Budweiser will turn one of its Project 12 beers into a full-fledged line extension called Budweiser Black Crown.
Of course, they’ll be positioning Black Crown as something totally new, but it and the Project 12 beer called Batch No. 91406 bear some amazing resemblances. Both trace their origins to the Los Angeles brewery, both are amber rather than light, and both pack more of a punch with 6% ABV.
They’ve also been launching kinda sorta craft beers over on the Bud Light side, too.
This past January saw the debut of Bud Light Platinum, which for a light beer is 50% heavier on the alcohol (6% ABV vs. 4.2% for regular Bud Light). More recently, they rolled out Bud Light Lime-A-Rita. (Try saying that fast after you’ve had a few.)
So how’s that working out for you?
Since its January launch, Platinum captured a 0.9% market share. With a little help, later in the year, from Lime-A-Rita, the overall Bud Light third quarter share gained 0.75%.
Those are the little victories.
But they may turn out to be costly ones.
Total Budweiser sales to retailers fell 6% over the first three quarters of the year, 7% in the third quarter alone.
And those little points of light, the “craft” beer victories, may be to blame.
AB InBev CEO Carlos Brito suggested to Ad Age that a little cannibalization may be at work here, in that the line extensions stole attention and display space from the more mainline beers.
“Budweiser did suffer a little bit because a lot of the features and displays got turned to the innovations,” he explained. “And Budweiser lost some of that and there is a high correlation of course between features — beer being featured and displayed — and sales.”
If Black Crown continues that process, those little rays of sunlight may just deepen the overall gloom.