A-B calls for united front to halt beer slide
Such has been the decline in beer sales in the US that market leader Anheuser-Busch has called for joint industry-wide advertising to address the situation. But the proposals have immediately exposed the fierce rivalry in the sector, and finding a united message in such an intensively competitive industry will be no easy task. Dean Best reports.After a summer of fierce competition in the US beer industry, the country's largest brewer has had enough. Anheuser-Busch, which has suffered more than most as US consumers increasingly switch from beer to wines and spirits, wants the US brewing fraternity - under the auspices of the Beer Institute - to join forces in an industry-wide marketing campaign to help boost flagging sales.
The move, which has drawn inspiration from the successful "Got Milk?" campaign in the US, could see A-B team up with fierce rivals like Miller Brewing to launch a marketing offensive to remind consumers why beer remains the most popular alcoholic beverage.
It's easy to see why A-B has mooted this kind of plan. Growing demand for wines and spirits in the US, notably from younger consumers, has eaten into beer sales. Spirits producers, in particular, have been successful in appealing to the key 21- to 30-year-old age group through product and packaging innovation, while wine producers have taken advantage of growing health awareness among consumers.
In response, Bob Lachky, A-B's executive vice-president for global industry development, has appealed to US brewers to join together to attract drinkers back to beer, leading A-B's moves to set up an industry-wide marketing campaign, as he puts it, to "heighten the romance of the product again".
"We hope to take the platform of talking about beer to the highest level" Lachky says. "How are we going to compete against liquor or wine? The higher road of the real intrinsic benefits of beer versus other forms of alcohol - that's where we've got to be focused."
The campaign already has a tagline in place - Here's To Beer - while a logo and print ads are in development. Occasional TV ads have also been proposed, a strategy that could even see the Budweiser brewing giant give up a prized spot during the Super Bowl. Lachky has proposed that individual brewers could occasionally give one of their own TV advertising spots over to the generic campaign, suggesting the possibility of using one of Budweiser's slots during the Super Bowl, arguably the most sought after nationwide TV event for advertisers, as an example.
However, Lachky says convincing retailers about the enduring popularity of beer in the US will be critical to the success of the campaign. "We're working at the grass roots level first. We need to get people to view beer differently and give retailers the necessary information to treat beer differently. This involves giving compelling messages to retailers to convince retailers to give more presence to beer. We want to empower them."
Lachky insists his proposals have been "very well received" among fellow brewers. Nevertheless, a generic industry campaign runs contrary to prevailing marketing tactics seen across the Atlantic.
In recent weeks, the intense rivalry between A-B and Miller has again hit the headlines with a row over a series of Miller ads promoting Miller Lite in direct comparison with Bud Light. It will be tough to find consensus on how to revive beer sales and predictably not everyone is convinced by A-B's plans. Miller, for instance, insists it would back the idea of an industry-wide campaign but is sceptical that A-B's proposals would boost beer sales.
"We would fully support any campaign that benefits the category but we are very realistic about our expectations, because beer is a brand-driven business," says a Miller spokesman. Miller wants to focus on developing individual marketing efforts for each brand in its stable. "Consumers don't have a problem with beer, it's with beer brands that they have a problem," the spokesman continued. "It's up to all the different brewers to develop compelling, vibrant and differentiated marketing campaigns for their brands."
Miller believes that years of stale marketing bored consumers and failed to differentiate beer brands from each other. "Beer isn't a commodity, it's a collection of very different brands. Our concern is that we do not want to add anything to the industry that further 'commoditises' beer."
Lachky is adamant that his plans will in "no way" commoditise beer. "In no way can you commoditise an industry with US$500m of branded advertising a year," Lachky argues. "(The campaign) will elevate the image of beer. Look, the real enemy is hard liquor and wine taking occasions from beer. It's not beer versus beer anymore."
Underlining one possible reason why other players may be instinctively wary of A-B's plans, Lachky says it wants industry backing but is determined to go ahead with its plans even if it does not get full support. "I'm not terribly worried if not everyone is on board," he told just-drinks. "We're working overtime to get everyone on board - we really want a unified position through the Beer Institute - (but) if some baulk at it, we're going to forge ahead in the same manner." Generic marketing may have its merits, but if the wider industry feels it is simply being told to jump to the beat of A-B's drum, there will naturally be resistance.
The Beer Institute says it is in the "very early stages" of formulating the plans and declines to comment further. Further meetings are set for early December with brewers and with the National Beer Wholesale Association to finalise the plans.
Mark Swartzberg, a beer industry analyst at US investment Legg Mason, says A-B's proposals could work but cautions that it depends how the campaign is structured. "It's more a question of the kind of message that's going to be put across than the amount of money put behind the campaign," he says. "The difficulty for the industry is to combine what works from a consumer perspective from the perspective of the supplier; it's hard to prove the economic incentive to suppliers of a consortium on an industry-wide basis."
Swartzberg argues that as Miller remains "a large but distant number two", it suits the brewer to focus on its own marketing strategies. "The single biggest opportunity for Miller is to clarify its brand propositions and then show the contrast with the market leader. Miller can tacitly support A-B but still focus on its own marketing."
And that could prove a problem for Lachky's hopes of getting an industry-wide campaign off the ground. Wine and spirits represent a common - and growing - threat to brewers but the two biggest brewers in the US remain poles apart in how to combat it.
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