Feb 202018
 

Corona Premier, Modelo’s line extension, targeted specifically at Michelob Ultra, is this week rolling out across the country.  Another line extension from AB, Michelob Ultra-Pure Gold, another low carb and low calorie beer will also be rolled out.  Remember, last year, Heineken also went after Ultra with Amstel Xlight, albeit with little success.

In early 2018, IRI numbers are trending similarly to recent years’ trends, with the big three: Bud Light, Coors Light and Miller Lite, all continuing to slide, although Miller Lite was slightly up.  Michelob Ultra continues to fly with an increase of 23%+.  Interestingly, in addition to the major suppliers starting to target specifically Michelob Ultra, more and more crafts are coming up with low ABV, calorie and low carb beers, ALL under the term sessionable!

Given that the industry seems to be shifting back toward light beers, why then are the big three struggling to turn around their sales?  Perhaps the industry is looking at a classic case of these three brands serving as studies in the product lifecycle.  Remember, all three brands were introduced in the 1970s, which means that Miller Lite, the first one introduced, will soon be 50 years old.  Coors light followed Miller Lite, which was followed by Budweiser Light (Bud Light).

So the question is: is the decline in sales for the big three due to the product lifecycle, or is it an issue is a marketing life cycle? Given the success of Ultra, one would think these three beers are declining due to the marketing lifecycle.  If many crafts are entering the market with their version of light beers, it would have to be the marketing.

Oddly, Miller Lite, Coors Light, and Bud light all have one item in common. None of the other beers have the term “light” in their name or on their branding.  Jim Koch, for years resisted introducing a light beer, but eventually did so with the introduction of Sam Light.  Certainly a lighter version of Sam Adams, but Sam Light was not anywhere near the liquid of the domestic lights.  It was a viable brand, but not another Ultra.

Miller Lite, Coors Light and Bud Light were all line extensions, lighter versions of their longtime beers.  For years, these three brands grew regardless of the level of marketing support. It was not until 2008 that these brands turned negative, and they have been in decline ever since.

The brands being brought to market by the crafts brewers, however, are not line extensions. They are new brands with names that indicate “light” without saying “light.” These brands include: All Day IPA, Nooner, and Dayblazer, to name a few.

Is it that simple?  If it was, would not AB and MC already have understood this?  The next latest and greatest beer might be sitting in a wholesaler’s warehouse, in the back corner, on a partial pallet. And 20 years from now, Bud Light, Miller Lite or Coors Light might just be in that same back corner on a partial pallet.

The strength of brand loyalty begins with how your product makes people feel.

 

 Posted by at 7:00 am
Feb 132018
 

For as long as I can recall, every major supplier has in some way, focused on marketing their products to the female consumer.  Once again, this topic is front and center at many winter and early spring wholesaler meetings.  As the overall industry continues to lose volume to other types of drinks, one way in which to aid the industry is marketing to the female consumer. This is nothing new.

Before light beers, Coors Banquet was one of the very first beers to actually have some success selling to the female market.  Coors had a tagline, “America’s Fine Light Beer,” and the beer was sold in a tall, slim can, similar to today’s Michelob Ultra packaging.  Light beers aided in adding volume, but when the first RTDs came to market, it looked as though the industry finally had a product-focused straight for women.  Soon Bartle and James arrived on the scene, followed by Mikes Hard Lemonade and others.

While these products resulted in additional female consumers, the beer industry continued to fall behind the sales of wine and flavored spirits.  The most recent product category to impact the female market was the Not Your Father’s Root Beer and related flavors which are sweet to the taste. Retailers quickly created serving suggestions, including NYFRB atop ice cream resulting in a root beer float.  Such specialty drinks did well, but all were short-lived.  As recently noted, NYFRB sales were down 60% and still trending down. Finally, ciders added a small bump with females, but that category, too, has recently moved to negative trends.

A recent extension, based on wine’s success, might be the liquid to finally jump start beers’ market share with the female segment.  Rose’ ales and ciders are the new, latest and greatest flavor to hit the market.  Cidergeist Bubbles, a rose’ ale from Rhinegeist in Cincinnati, is now producing 20% of the volume and growth.  According to the brewery, Rhinegest cannot keep up with the demand.  Now the big boys are all jumping in as Boston Beers has Angry Orchard’s Rose’ and MC will have Crispin Rose’.  Expect AB to add a product in this category.  Although smaller brewers will have a rose’ expect, as always, that the big boys will own this category. Even Ballast Point will have a rose’ supported by Constellation brands and their team.  Look to see rose’ everywhere.

The question is, will rose’ be the long sought-after breakthrough product for females, or will rose’ be just one more product to rocket up and then fall back within a short time?  Distributors and retailers, now in tune with these specialty flavors, will probably stand back and watch at first, making as much profit as they can until the industry sees what kind of legs rose’ possesses.

Will rose’ be another NYFRB, or will it be the next Blue Moon?  Will we know by the end of the year?

Buffalo wings and ciders is all I need…

 

 

 Posted by at 7:00 am
Feb 062018
 

Two major sporting events were held this past Sunday, the Super Bowl, and the Waste Management Phoenix Open.  The water cooler conversations this week has focused on the football game and, of course, the halftime show and the Super Bowl commercials. As we know, many people watch the Super Bowl simply for the commercials.

Over the years, AB has not only been the company with the most commercials, AB has also won the best commercial award multiple times.  This year, a 30-second commercial was said to have cost around $5 million dollars.  At the time of writing this post, the first viewership numbers for the Super Bowl just became available, however, if this year’s trends continue, viewership for the game has been declining by around -7%.  AB, or any advertiser, cannot be pleased with these numbers even though millions still watched the game.

There are a number of reasons viewership of pro football is down.  Much of the reason is due to cord cutting and costs, but no doubt, the political and abuse issue actions by the NFL and their players have had a negative effect on viewers.  More than likely, even if AB chose not to advertise at the Super Bowl, some other major brewery would have jumped in and bought the available spots.  There are still millions of people watching the game.

Yet, some years ago, the Phoenix Open made the decision to be the golf tournament which would be played on the week of the Super Bowl.  This golf tournament, put on by the Thunderbird organization, annually has the largest attendance of any PGA tournament around.  The goal of tournament officials is to end the final round just prior to kick off of the Super Bowl.  And fortunately, this has successfully happened every year.

In last year’s tournament, attendance on Saturday was around 200K people. This year the Thunderbirds are anticipating up to 220K people on Saturday.  Attendance for the week exceeded 700K people, an amazing fact!

The Phoenix Open and the Thunderbirds have used the proceeds from the tournament for various local charities and have given away millions throughout the years. Since 2010, more than $50 million has been donated.  All in all, the PGA tour has given billions to charity. In every city in which a tournament is held, local charities benefit from professional golf.

In 2019, Michelob Ultra, the fastest growing beer in the U.S., might be the second largest selling brand in the country, surpassing both Miller Lite and Coors Light in dollar sales. Ultra has been the longtime beer sponsor of the PGA, a fact that most certainly has helped Ultra.

In fairness to the NFL, they do contribute to charitable organizations and many star players donate to their charity of choice.  The NFL issues are political, drug use and abuse.  On the other hand, the PGA issues deal with slow play and on-course rules.

In some way, it is almost like two sports going in two different directions… not unlike Bud Light and Michelob Ultra.

The character of a people may be ruined by charity…

 

 Posted by at 7:00 am