If we were running Anheuser-Busch or MillerCoors we’d be in a bit of a panic too. Every month, it seems, we report yet another decline in shipments. CEOs of major brewers took their panic to the stage at the National Beer Wholesalers Association annual convention, as Adage succinctly summarized today.
Nobody really knows, of course why the decline. But we have a couple of theories.
First, for years beer dominated the airwaves. Spirits didn’t advertise on radio or tv, unwisely in our opinion. But in the last 20 years, spirits has steadily increased its advertising on tv. Wine advertised. But not much. Once spirits began advertising, beer was no longer the only voice out there.
Second, this is generational. One of the great advantages of having covered this industry for 33 years is we’ve seen this before. This feeling of absolute despair reminds us of the panic that swept through the spirits industry in the early 1980s. A Wine & Spirits Wholesalers Association annual convention in Atlanta in the mid-1980s resembled a gathering at a funeral parlor, not a trade association meeting. The gloom was so deep that Brown-Forman felt compelled to diversify into luggage and china.
Here’s the good news: If Millennials are drinking spirits, you can bet their kids will turn to beer or wine.
Third, beer advertising has been abysmal. It was bad enough when Budweiser made a bunch of frogs its advertising stars, but who can explain exactly how taking over a hotel or an entire town, slapping a Bud Light label on everything in it, sells beer?
Part of this is that beer marketers, like everyone else, got swept up in the idea that traditional media – radio/tv, magazines and newspapers – was stodgy. And expensive. Why pay all that money when you could get lots of exposure via Twitter and Facebook? And stage events? The results speak for themselves.
Along the way, we think beer marketers – and in particular the industry leader – have made a series of strategic mistakes. Back when the Busch’s ran Anheuser-Busch they made money handing out samples of A-B products at A-B-owned theme parks. When InBev’s Belgian-Brazilian bankers bought A-B the first thing they did was sell those theme parks because they weren’t “core assets.”
Maybe not, at least in terms of brewing, warehousing or transporting beer. But they actually made money for A-B, they gave lots of consumers the opportunity to sample A-B products for free, and they made friends by making the Budweiser Clydesdales available. To be sure, A-B can still stage events at Sea World and Busch Gardens – if they pay.
Add to that, at a time when everyone is talking “local,” Big Beer moved their headquarters out of Midwestern cities to metropolises – A-B to New York and MillerCoors to Chicago. The stated reason was a greater pool of talent in those cities.
We don’t buy that for a minute. The reason A-B moved its marketing team to New York was that it made it easier for the international talent that comprises the top ranks under the new regime to fly home, be it to Brazil or to Europe. . . . Our opinion.
So, what should Big Beer do? We think the answer is found in the past. Unless humans have changed – and there’s nothing to indicate they have – what worked in the 1950s and 1960s should work today.
First, they need to dramatically increase their advertising in traditional major media. Yes, Facebook is getting into TV as are a bunch of other new media. But the eyeballs are still on broadcast TV. It we were calling the shots, we’d put tons of money there.
Second, they need to return to jingles. When was the last time you heard “Here Comes the King”? Or “If You’ve Got the Time, We’ve Got the Beer”? We don’t recall a jingle for Coors, so it needs to write one.
Third, they need to make their name visible everywhere. On distributors trucks. On mud flaps. On t-shirts and sweatshirts.
Fourth, they need to emphasize, when they can, a local angle. I still remember driving through Texas in the late 1950s and seeing Ford cars with a decal in the back window: “Made in Texas by Texans.”
Fifth, they need to understand that this, too, will pass. Spirits will not always be king of the hill. When a new generation comes along, the one thing you can bank on is, it’s drink won’t be its father’s drink.