It’s been an up-and-down few months for world’s largest brewer Anheuser-Busch InBev. But the global giant is hoping this week marks the start of a super turnaround.
While AB stock is up nearly 11 percent over the last year the company faces continued headwinds in the North American market.
In January, the iconic Budweiser brand was unseated by Coors Light as the country’s No. 2 selling beer. According to Beer Marketers Insights, Molson Coors shipped 18.2 million barrels of Coors Light in 2011, compared with 17.7 million barrels for Budweiser. While Bud Light remains the country’s best selling beer, it marks the first time in nearly twenty years that AB did not control the top 2 best-selling beer brands.
The Coors Light news is confirmation of the overall changes the beer industry has been seeing the last few years. Consumers are moving away full-calorie beers, as indicated by four out of the top five selling beers in 2011 being “light beers.” Worse, some consumers are dropping beer altogether are turning towardspiritsas evidenced by overall U.S. beer sales declining one percent last year, while spirits sales grew.
When consumers are reaching for a beer these days, it’s likely a craft beer, a segment which has seen consistent double-digit growth despite the overall decline in beer sales.
Wooing Cocktail Lovers
AB is hoping to stem the tide by introducing Bud Light Platinum brand. Think Bud Light on steroids. Platinum is higher in alcohol at 6 percent versus Bud Light's 4.2 percent. It's also higher in calories, logging in at 137 calories to Bud Light's 110. As for taste, AB says Platinum is "slightly sweeter" than they typical Bud offering.
While speculation in the beer community exists that Platinum is another attempt by AB to tap into some of the growth seen by craft beer, AB execs say they have a different consumer in mind. AB says its targeting the consumer who may have dropped beer altogether in favor of hard liquor and hopes to position Platinum as a more upscale brand that can reconnect with the consumer who has strayed from beer.
“We feel like we can come up with compelling propositions that can compete on image and that can compete on taste and have these people come back to beer and stay in beer" AB VP of Marketing Paul Chibe recently toldAd Age.
Anheuser-Busch is apparently willing to spend big to back up that proposition. According to Ad Age, AB, exclusive beer advertiser of the Super Bowl, will use the first two of its six Super Bowl ads (at a reported $3.5 billion per 30 seconds) to promote Platinum.
A Littler Light
While Platinum appeals to consumers who may be looking for something more substantial in their beer, AB is working the other end of the spectrum as well. This week AB is introducing smaller size cans and bottles for its Select 55 label. Already marketed as the "lightest beer in the world", AB is going even lighter with Select, rolling out what they are calling Select 55 “Little Lights.” The smaller sized containers include eight-ounce, 35-calorie cans, available in 12-packs; and seven-ounce, 32-calorie clear glass bottles, available in six-packs.
“These new sizes for Select 55 provide more options for adults who want to enjoy a great beer with few calories,” said Ryan Moore, senior director, Select 55.
For AB, both moves are timed to capitalize on the company’s sizable commitment to the NFL and the Super Bowl. AB is in the first year of a six-year, $1.2 billion deal as the official beer of the NFL. According to Nielsen, the two weeks leading up to the Super Bowl are the seventh biggest for holiday beer sales, with Super Bowl beer sales hitting $49.3 million last year. Nielsen says grocery retailers alone sell 17 million cases of beer in the two weeks leading up to the Super Bowl.