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GREENSBORO, N.C.—The wall behind the bar at Jake’s Billiards has 69 taps offering beer choices that range from California’s Lagunitas Fusion 22 to Natty Greene ’s Buckshot, which is brewed across town. The last tap in the long row belongs to Budweiser, and it is about to be removed.
A Halloween promotion earned Budweiser a place at the bar, a hot spot frequented by students and recent graduates of the University of North Carolina here, but owner Jessica Dewey sees no reason to keep Bud on tap. She sells 20 cases of Bud bottles each week, "but it’s mostly to older gentlemen and country kids. Our clientele likes the craft beers."
The self-proclaimed King of Beers is more of an afterthought among young consumers at Jake’s and bars across the U.S.: Some 44% of 21- to 27-year-old drinkers today have never tried Budweiser, according to the brand’s parent company, Anheuser-Busch InBev NV.
Young drinkers aren’t the reason Budweiser volumes have declined in the U.S. for 25 years, from its nearly 50-million-barrel peak in 1988 to 16 million barrels last year. Light beers like its sister, Bud Light, have chipped away at Bud’s share of the market for decades. Bud Light overtook it as the No. 1 selling beer in 2001, and Coors Light displaced it as No. 2 in 2011.
Craft beers and flavored malts such as AB InBev’s Lime-a-Rita have contributed to a 9% decline in shipments since then.
One beer distributor persuaded Jake’s Billiards in Greensboro, N.C., to add Bud draft for Halloween with zombie-themed ‘Bloodweiser,’ but owner Jessica Dewey doesn’t plan to keep Bud on tap. Justin Cook for The Wall Street Journal
The company has decided that persuading 21- to 27-year-olds to grab a Bud is the best chance to stop the free-fall. After years of developing advertising and marketing that appeals to all ages, AB InBev plans to concentrate future Budweiser promotions exclusively on that age bracket. That means it won’t trot out the traditional Budweiser Clydesdales for this year’s holiday advertising. It means February’s Super Bowl ads will feature something more current than last year’s Fleetwood Mac. It means less baseball and more raves with DJ group Cash Cash.
The marketing push is accompanied by an effort to get Budweiser back on tap. Theory being: If Levi’s and Converse can end years of sales declines by winning over young consumers, so can Bud. "This is a very considered, long-term view of what will turn around the brand," said Brian Perkins, AB InBev’s vice president of marketing, Budweiser.
Budweiser has a 7.6% share of the $100 billion U.S. beer market, down from 10% five years ago, and 14.4% a decade ago, according to Beer Marketer’s Insights. The biggest Budweiser drinkers are between the ages of 28 and 34 and consumption among that age group will decline as they settle down.
AB InBev looks at 20-somethings as a new market to tap. The number of people turning 21 peaked in 2013 at around 4.6 million. They represent the largest number of new drinkers since the Baby Boom, according to the National Beer Wholesalers Association.
In their demographic, craft beer makes up 15% of their out-of-home buys, compared with 10% for older generations, according to Nielsen, and it is growing by two percentage points a year. They also consume more cider, flavored-malt beverages and ready-to-drink cocktails.
By Tripp Mickle
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