{"id":1739,"date":"2014-05-06T06:00:27","date_gmt":"2014-05-06T11:00:27","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=1739"},"modified":"2014-05-04T19:34:00","modified_gmt":"2014-05-05T00:34:00","slug":"there-is-no-victory-at-bargain-basement-prices","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=1739","title":{"rendered":"There is no victory at bargain basement prices."},"content":{"rendered":"

\"Busch<\/a>By the late 1960s, beer marketing was limited to brewery reps and wholesaler supervisors calling on bars and buying rounds of beer.\u00a0 Add in hanging p-o-s and you have marketing covered.\u00a0 Outside of AB, no one really advertised much on TV.\u00a0 In fact, even price promotions were rare and Coors did not even do them until the mid-1970s!<\/p>\n

Then came Philip Morris. \u00a0\u00a0When they bought Miller Brewing Co. everything changed.\u00a0 Major media buys woke up AB who jumped in after Miller in an attempt to stem Miller’s growth.\u00a0 This included more and deeper price promotions and themed holiday programs.\u00a0 The regional breweries were caught in between and slowly died or sold out.<\/p>\n

By the 1980s, the industry knew that any brewery needed to do one or both of the following to compete: advertise with media or price promote.\u00a0 The next evolution came when Jim Koch put “feet on the street,” a practice which endures to this day.\u00a0 It was not much later that the internet came into existence, closely followed by social media.<\/p>\n

Social media, anchored by Facebook and Twitter, is used by everyone in the industry especially crafts, who have benefitted more than anyone in\u00a0the beer industry by using this technique.<\/p>\n

For decades the industry was focused on market share and revenue growth.\u00a0 This all changed in 2008 when InBev got its hands on AB.\u00a0 ROI and margin growth became the focus for AB, soon MC followed AB\u2019s lead.\u00a0 This benefited both crafts and wholesalers.\u00a0 Consumers still flocked to the craft segment with no push back on price points.\u00a0 Crafts grew double digits annually while AB and MC lost millions of barrels.<\/p>\n

By 1980, Coors had AB down to only a few draft accounts in Wichita, so AB decided to rollout Busch Beer in Kansas.\u00a0 Busch at that time used the tagline, “Head for the Mountains” in their advertising, which played against Coors “Rocky Mountain Spring Water” marketing.\u00a0 AB targeted the college accounts around Wichita State, all of which were exclusively Coors accounts.\u00a0 Their plan?\u00a0 Price half bbls. $2.00 less than Coors.\u00a0 Since we had just introduced Coors Light, it was decided to match the Busch price with Coors Light.<\/p>\n

Busch never got off the ground, but since all the accounts were exclusively Coors, the bar owners all put in Coors Light!\u00a0 It was not long before Coors Light took off like a rocket.\u00a0 The rest is history.<\/p>\n

What should be to no one\u2019s surprise, AB is now heavily discounting their craft beers and some import beers in what we all know to be, an attempt to buy back market share.\u00a0 This started at AB-owned distributorships which makes sense.\u00a0 Will an independent AB wholesaler with a large multi-craft portfolio drop their AB craft prices to steal taps from their own in-house craft brands?\u00a0 It is safe to say, probably not, but remember, AB is the largest wholesaler in the US with branches from coast to coast.<\/p>\n

The question now becomes, just how long will AB continue this discounting?\u00a0 Will crafts follow or will the consumer\/retailer switch brands based on pricing?\u00a0 Or, if this discounting has little effect on ABs success in gaining tap handles, will we see even deeper discounting?<\/p>\n

The deep pockets\u00a0that AB has will force many crafts into decisions they are not prepared to make and the results could be dramatic in the industry.\u00a0\u00a0We might just find out if Eisenhower\u2019s statement is true: “There is not victory at bargain basement prices.”<\/p>\n

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By the late 1960s, beer marketing was limited to brewery reps and wholesaler supervisors calling on bars and buying rounds of beer.\u00a0 Add in hanging p-o-s and you have marketing covered.\u00a0 Outside of AB, no one really advertised much on TV.\u00a0 In fact, even price promotions were rare and Coors did not even do them […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_s2mail":"yes","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[1],"tags":[],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2xRTi-s3","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/1739"}],"collection":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1739"}],"version-history":[{"count":11,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/1739\/revisions"}],"predecessor-version":[{"id":1784,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/1739\/revisions\/1784"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}