The report argues that brand extensions are not the way forward for mainstream brewers

The report argues that brand extensions are not the way forward for mainstream brewers

Mainstream US brewers have mostly failed to have a "lasting impact" on sales with expensive brand extensions and should instead copy craft brewers by launching new styles, according to a new report. 

A Mintel study, published yesterday (28 January), argues that the country's high-volume brewers are at a "crossroads" as volumes remain stagant and market share is being lost to craft beer, wine and spirits. "Although they have introduced premium, craft-style brands such as (MillerCoors') Blue Moon to capture the excitement over craft beer, they also have largely failed to produce brand extensions that have a lasting sales impact on the market," the report says. 

"Bud Light Platinum (brewed by Anheuser-Busch InBev) exemplifies a brand extension that had early success due to marketing buzz, but growth quickly dried up after drinkers recognised that no amount of hype can drown concerns about taste." 

Mintel predicts that US beer sales by value will further outpace stagnant volume growth over the next four years, as consumers continue to trade-up to premium and craft brands.

"Instead of launching new products that amount to costly advertising adventures, big beer brands should continue the trend toward premiumisation with more focus on quality," the report says.  

In its nine-month numbers, A-B InBev reported a 2.8% slide in North America volumes, while sales were up 3.7%. MillerCoors reported a 2.9% drop in year-to-date volumes and flat sales

"Perhaps," Mintel suggests, "they should follow the example of smaller, craft brewers in showcasing brewing processes, emphasising quality ingredients, and introducing new styles and flavors that are not just extensions of light beer." 

Despite the ongoing rise of craft beer in the US, analysts at Nomura have forecast that the segment will still only account for 10% of the country's overall beer volumes by 2017.