Bud faces down craft beer threat

25 November 2014

NEW YORK: Budweiser, the beer brand, plans to reverse falling sales by focusing exclusively on a younger demographic which is driving the current trend for craft beers.

"This is a very considered, long-term view of what will turn around the brand," said Brian Perkins, vp/marketing, Budweiser at AB InBev.

But the challenge it faces was highlighted in a Wall Street Journal report which noted how volume sales had declined from 50m barrels in 2088 to 16m last year, as light beers, including Bud Light, had taken an increased market share and as craft beers had proved increasingly popular with younger drinkers.

The latter now account for some 15% of this age group's out-of-home purchases and are one reason Budweiser is frequently no longer on tap in bars. According to AB InBev, more than four in ten (44%) of drinkers aged 21 to 27 have never tried the brand.

Consequently the beer brand will be moving away from a rather old-fashioned marketing approach, as exemplified by its use of Clydesdale horses in its seasonal advertising and Fleetwood Mac in its Super Bowl ad last year, to sponsoring food and music festivals.

Earlier this year, for example, it sought to recapture relevance among twenty-something beer drinkers with a series of short films featuring artists appearing at the Made in America concert, a three-day event in Philadelphia, telling their life story and the crucial turning points, which had then been delivered into the Facebook news feeds of millions of potential Budweiser drinkers.

A more contemporary message for Christmas will feature twenty-somethings looking into the camera and calling out friends' names as a voiceover asks " "If you could grab a Bud with any of your friends these holidays, who would it be?"

But a former executive cautioned against alienating core drinkers in rural America. "If you try to be too young and too hip, you lose your base," said Tony Ponturo, previously a senior marketing executive at Anheuser-Busch.

But distributors welcomed moves that meant even if Budweiser wasn't a first choice it was at least "in the purchase tent."

Data sourced from Wall Street Journal; additional content by Warc staff