Jun 132017

lets have a beerWas anyone really surprised with the recent NFL announcement that spirits can be advertised, with certain restrictions, on their games?  A better question might be; why did it take so long for the NFL to come to this conclusion?

The obvious answer to why the NFL has now decided to allow the advertising of spirts during their games is because the NFL will be receiving much needed revenue to offset its declining viewership.  Once again, with this announcement, many industry publications have jumped in with a myriad of comments and thoughts.  Most believe the decision is negative for the beer industry, however, some believe it might be a positive in that it could be a wakeup call for brewers!

A general consensus exists in the ad industry that spirit advertising, as compared to advertising for beer, is much more effective at getting the message across to the consumer.  No doubt that the spirit ads are more compelling and speak to the consumer, highlighting the key attributes of the product.  Beer, for the most part, does not address such attributes.

Is ineffective advertising the real problem within the beer industry, or is it something else altogether?  The numbers are eye awaking!  Since 2008, MC and ABI have lost over 27 million bbls. in sales!  That is astounding!  Translate that number to market share and MC and ABI have gone from 75% share of the US beer market in 2008, to 66% market share in 2017.  With the current trends continuing, their market share for MC and ABI will be less by the end of the year, with no end in sight.

The industry knows that there are main stream products that are doing well: Ultra, Modelo Especial, Coors, and Stella.  Their advertising is highly acclaimed based on these brands’ sales trends, and for these brands, the sales trends are very good.  Buy why?

Could it be the simple fact that Coors Light, Miller Lite, Bud Light, and Budweiser, along with numerous other brands, are no longer seen by the consumer, regardless of the quality or quantity of the advertising messages, as brands that are in favor.  In other words, could these brands be passé?

As indicated by the number, domestic light beer consumers are moving to hot brands like Ultra, Corona Light, and Tecate Light.  These brands are viewed as favorable to the consumer.  They are hot, the others are not.

Brewery executives only have their resumes at risk.   Wholesalers, on the other hand, have a great deal of skin in the game, including their own families’ well-being, in addition to that of their employees and their families. If the wholesaler has a diverse portfolio, including Constellation and/or Heineken, they will well situated, if not, then there is most likely much concern in that house.

Someday these brands will bottom out and could languish for years, eventually coming to life again, similar to the scenario experienced by Pabst, Lone Star or Rainer.  A retro redo.  If that is true, then there is no form of, or amount of advertising content that will positively affect any of these brands, if the consumers continue to reject them.

Spirits being advertised on NFL games will not materially affect beer sales.  The issues with the beer industries are internal, not external.  Status quo is Latin for “the mess we are in.”

 Posted by at 6:00 am