Trust Me, the Analysts Are Wrong

A recent report that crossed my desk informs me that despite ill fortunes of late, industry analysts are confident that the decline of the Budweiser brand in the United States can be staunched. They believe that Anheuser-Busch InBev (ABIB) has “the will and the means to stabilise and, gradually, reinvigorate the Budweiser label in the US” and cite “the broader franchise (which) is up due to Bud Light Lime.” They also note that “Bud Select 55 is off to a good start.”

They’re wrong. And here’s why.

The core brand Budweiser is in decline, and has been so for some time now, and for the first time in  its history, Bud Light has fallen into the same boat. Some of the analysts quoted in the report see this as no problem, thinking that a renewed emphasis on advertising and promotion can reverse the fortunes of one or both brands. But campaign after campaign has done nothing to alter the course of Budweiser thus far, so it remains a mystery why the analysts think that not only will this suddenly cease being the case, but that the same strategy will also work for Bud Light.

My view is a little different because, where mainstream beer is concerned, advertising and promotion hasn’t really been cutting it lately. Sure, we’ve seen the great effectiveness of the “Most Interesting Man in the World” campaign for Dos Equis, but that’s: a) a premium import; b) a relatively small market brand; and c) a campaign that has gone viral to a remarkable degree, even infiltrating the mass media, or in other words, a once in a blue moon hit. To expect a similar campaign to influence the fortunes of the Budweiser family to a proportional degree is outrageously optimistic.

Next up, we have the analysts who like the way Bud Light Lime and Bud Select 55 are influencing the overall volumes of the Budweiser family. This, too, is optimism to the extreme. The lime segment of the market is a passing fad which, like so many beer fads before it, will surely fade away and be forgotten. The ultra-light category is going nowhere, in my estimation. So long term, I don’t see either buoying the Budweiser brand.

Sure, after Bud Light Lime is trotted out to pasture, the minds at ABIB may very well come up with a new fad beer to replace it, but consider this: when was the last time that happened? Has anyone had a Bud Ice lately? I didn’t think so.

The beer market in the United States is changing, my analyst friends, and Budweiser, Bud Light and all the brand’s off-shoots are losing ground to more interesting, more flavorful beers. (Hell, even Bud Light Lime falls into that category!) They might still rule the roost, and will likely continue to do so for some time to come, but the iron fist is weakening and I see no change coming down the pipe that will alter that any time soon.

7 Comments

Filed under beer advertising, beer industry, drinking quality

7 responses to “Trust Me, the Analysts Are Wrong

  1. Pingback: De store og giganterne - fredag « Beerticker.dk BETA

  2. Good call here Stephen. I’ll be very excited when we no longer have to put up with these ridiculous and mindless fad-beers that the commodity guys are producing.

  3. I am yet to have a commercially available lime hinted beer which has been anything other than horrific to be blunt.

    Perhaps it is a case of getting the base beer wrong? As a homebrewer I make a witbier in which I replace the traditional curacao orange peel with lime peel and it is a very nice drop indeed.

  4. Gary Gillman

    Bud Light Lime tastes like lager-and-lime, it’s okay.

    I think if Budweiser brought back the profile of the beer as it was, say, in 1950 or better yet 1933, it would stop any decline and grow the brand considerably. Those who wouldn’t like it would migrate to Bud Light, but most would, in this modern world (courtesy Jackson, Maytag, CAMRA, Papazian, etc.) find the change enjoyable I think.

    There is a kind of precedent, in that Heineken changed to an all-malt spec about 20 years ago. True, Heineken was then and is still a big seller, but it shows that increasing the quality didn’t hurt the brand, indeed I believe it helped save it.

    Gary

  5. Totally agree with you. The “industrial big boys” are losing customers to craft beer and not getting them back. No matter what gimmicks they concoct.

    Until they create a product that “beer” afficionados actually want, the trickle of lost sales will continue. Probably won’t ever become a flood but they are going downhill.

  6. Pingback: So, You Think Anheuser-Busch InBev is Big Enough? « Blogging at World of Beer

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