Beer Business Blues

Hey, blog. Long time no posting.


For my return to these pages, I thought I'd highlight a prominent local business. When people think St. Louis, they think Budweiser, even though Anheuser-Busch was bought by Belgian company InBev in 2008. However, Budweiser seems to have lost its throne as "King of Beers." A recent article in the local rag discussed Budweiser's woes. Here are some interesting factoids:

• Four out of 10 people in their mid-20s have never even tried Budweiser — a rate 2.5 times higher than when it reigned supreme, according to the company.
• The beer's share of the U.S. market peaked in 1988 at 26 percent, sinking to 9.3 percent last year.
• [A-B President Dave] Peackock admitted the marketing gimmicks of the 1990s — the Budweiser frogs and ants — were a mistake, cheapening the brand's image.
• Bud Light is now the country's best-selling beer [this article is specifically about the woes of regular ol' Bud].

The article focuses on the fact that a lot of people these days like microbrews. While that is true, the article seems to ignore that a) many people, wanting to drink fewer calories, prefer light beers (the article doesn't mention this, beyond the statistic above) and b) many young people prefer cheap, nasty beer like Natty Light.

This second factor sums up Budweiser's problem.  It is stuck somewhere between a quality beer and a cheap, mass-produced beer, often trying to have it both ways.  President Peacock in this article plays up the beer's quality:

Peacock got passionate in his defense of Budweiser. It wins blind taste tests again and again, he said. "It is the perfect liquid," he said, allowing that to sink in, then adding, "I don't say that out of arrogance."

The problem, according to Peacock, is the image. A-B has not effectively used the brand's best qualities to market the beer. Budweiser has been brewed with the same yeast strain since 1876. It is the only one that is beechwood-aged, which helps with fermentation.

"We have just as good a story as they do," he said, referring to the craft brews that tend to harp on their craftsmanship and history. "We just have been remiss in explaining that."

This side of Budweiser is emphasized on its brewery tours.  I've taken the local one twice, and they really focus on the production of the beer.

On the other hand, there are Bud's commercials:

A new series of lighthearted, but not silly, Budweiser ads now running on TV are aimed at young male drinkers. One shows different ways to carry Budweiser bottles from the bar to the table. Another highlights the various ways young men say hello to each other.

These commercials, just like the frogs and ants, portray the beer as a frat boy beverage, which conjures up images of cheap swill consumed in large quantities.  This message does not say "quality beer" in any way.  This is the contradiction Budweiser will have to address if it wants to regain US market share (the beer is apparently doing well abroad).

What are your thoughts on Budweiser?