Bud attacking the craft beer drinker not the beer

Budweiser ran an ad during the Super Bowl that has attracted a significant controversy. The ad isn’t an attack on craft beer, it’s far more sinister than that. It’s an attack on the craft beer drinker. It uses tactics straight out of the American conservative playbook to target democrats by branding them as elitist, smug and self-righteous. They made liberal and well-educated negative in the political discourse. Now Budweiser is branding “craft beer” drinkers as north eastern liberals and west coast hippies. They’re simply the counter-culture to real beer drinking America.

To examine this, you have to look at the three different ads Budweiser aired during the Super Bowl. We have the whimsical ad that keeps people talking about long after the game ends and this one certainly did. Gone are the days of Wazzup or the Budweiser frogs. In their place is an ad called “Brewed the Hard Way” that’s trying to put across the message that Budweiser is a beer for the many, not just the few. To put it bluntly, it’s are putting out the message their beer is for ordinary Americans and not elitist beer drinkers. “Let them sip their… pumpkin peach ale” because the Budweiser is “brewed the hard way” for hardworking people.

https://www.youtube.com/watch?v=siHU_9ec94c

Yes, craft beer enthusiasts can at times take things too far. There are those that see beer as the new in thing, those that have moved beer appreciation to a level that of a superior wine club and of course those that talk people’s ears off about beer. Not all drinkers are enthusiastic about beer as we are. Our passion for beer can come across a little too much at times. It affects the one true thing that beer has above all other alcoholic products, its accessibility. It is this very point that the company’s attacking.

The first ad has attracted a lot of the attention of the beer community out there but another ad run during the game also has craft drinkers in its crosshairs. The “Clydesdale Beer Run” is set in a supermarket where a customer first picks up case of beer that’s clearly not Budweiser (or any other macro brand for that matter). As soon as he does this a Clydesdale horse appears and plainly isn’t happy. Needless to say the customer then opts for a case of Budweiser and slowly backs away. The tagline is “Don’t forget your Buds”. This ad’s quite sinister in that it practically invokes the infamous 100 percent share of mind campaign that began almost 20 years ago. Whilst that campaign focused on strong-arming distributors, this ad targets the actual customer. It’s interesting to note that these ads and the share of mind campaign were both borne out of surges in popularity for craft beer, not its macro-rivals.

https://www.youtube.com/watch?v=xAsjRRMMg_Q

Finally, “Lost Dog” is a continuation of Budweiser ads of recent years designed to pull on the heartstrings of viewers. In the past, they even promoted pet adoption in one ad. This ad shows a pick-up truck driving country-boy looking for his missing dog who in turn is looking for his owner. This is an out-and-out American family-values ad (although the song’s a cover of 500 Miles by local band the Proclaimers). It continues the theme of Budweiser being the beer of traditional small-town America that’s resilient against change. It’s trying to convey certainty in an uncertain world. Craft beer is just one more uncertainty. Bud’s just plain folksy and uncomplicated.

What Budweiser fails to mention is that it itself is no longer American, as its global HQ’s in Belgium. It’s more than likely of course that failure to mention this was simply an oversight. So too did they omit to acquiring a portfolio of craft breweries, the most recent of which took place 10 days before the Super Bowl kicked off. But what are #BestBuds for if we can’t remind them of this?

Selling foreignness to the local drinker

After leaving a match in Donnybrook, I couldn’t help but be struck by 3 billboards clustered around the same intersection advertising big beer. There was one promoting Peroni in a manner influenced by the George Clooney Nespresso ads, one from Budweiser how they can help you get a job and one promoting Kronenbourg 1664 drawing on classical French alcohol advertising practices of old.

Three billboards in close proximity promoting beer. All three being lagers. Two promoting the foreignness of the beer and one just an out-and-out escapism message (or perhaps AB InBev are giving up brewing & reinventing themselves as a recruitment company). Anyway, they show that a traditional Big Beer marketing tactic’s alive and kicking.

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Not content with dipping their toes into the “crafty beer” market, they still persist with countering the “lack of choice” argument with launching foreign brands on a market. It’s as if they use the same play book from back in the days of the East India Company. Do they think beer drinkers still eagerly scan the papers for notices of what wondrous, seemingly exotic and possibly much sought-after beers to arrive off the boat? Well, the ads indicate that the big selling points of one the beers in question is that they are foreign and foreign means better, more exotic – hell they must be if they went to the trouble of shipping them. Well, that may imply of course the beers are imported and not brewed locally (under contract potentially).

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Above all, it’s a back handed slap to the local independent brewing industry. It’s not an Irish thing nor a British one, it’s one that’s being repeated all over the place. Look at the US, Molson Coors have Blue Moon to get a piece of the “choice” market and a response from AB InBev was to push a beer from the “largest micro-brewery in the world”, namely Stella Artois. Seriously they tried to position Stella in the craft market on the basis that the Belgians know brewing. It’s similar to when in the 1980s, the microchip & PC revolution was taking hold in the US and the Soviets were trying to build the largest computer. They simply miss the point. They really only do this with lager, with the exception of the occasional wheat beer.

Big beer can put these new beers into existing establishments and many fail to take root. Bar owners have been known to complain that these beers often are slow to shift (not unique enough perhaps?) and can be reluctant to try carrying a craft beer (bottles can be an easier sell to them). However, continuously launching new beer brands can help attune consumers to break with existing brands and try other things. We need to ensure they get the opportunity to try something really special.

When beer’s like a soap opera

Big beer can be like a soap opera. At times you find rivals in bed together, at each other’s throats and other power games. Take Molson Coors and SAB Miller. They’re global competitors, except in the United States where they have the joint venture, Miller Coors. In Ireland, Diageo produces rival Anheuser-Busch InBev’s Budweiser. Three years ago SAB Miller acquired Fosters but the Australian-based brewery doesn’t own the rights to its namesake beer in Europe, Heineken NV does. Confused? You’re not alone. It’s a question of extending global reach, of achieving or retaining market share, of seeking efficiencies in production as well distribution.

The week commenced with news that the family-owned Heinken NV rejected a take-over by the second-largest brewing concern, SAB Miller. Heineken itself is the third-largest brewer in the world and is sold in over 100 countries. According to the Wall Street Journal, the advantage to SAB Miller was that it would strengthen its reach into Latin America (Heineken owns Dos Equis & Tecate) and Asia, where SAB Miller is weaker (with the exception of Colombia). Other benefits would be that it would’ve reunited the Fosters brand within the one company, seen Grolsch, Heineken & Amstel together. Possibly with Heineken continued to be pushed out into the export market (especially Africa) and the former being concentrated closer to home. SAB Miller recently acquired family-owned Peroni and already has the ubiquitous Pilsner Urquell joining Miller and Castle and Polish lagers Lech & Tyskie in its stable.

So you’re probably thinking this is a moot point now, given Heineken’s rejection of the approach. Well, it gets even more interesting. The second-largest brewer is now subject to a take-over itself by none-other than the global powerhouse that is AB InBev. According to the Wall Street Journal, the Belgian-based company and the largest brewer in the world is currently engaged in discussions with banks over financing the take-over. The reported amount is a staggering €94 billon. The largest deal in the brewing sector to date was the 2008 acquisition of Anheuser-Busch by InBev for $52 billion. They also bought Mexico’s Grupo Modelo, makers of Corona for $20.1 billion in 2013.

In 2013, AB Inbev had approximately 20% of the global beer market (source: Euromonitor). So why does it need SAB Miller? Any deal would further strengthen its foothold in South America and complement existing markets. More importantly, according to Bloomberg, it would give AB Inbev access to markets with rapidly expanding markets in China and across Africa, as well as a bigger presence in Australia. The effect of the acquisition would be subject to approval, such as the likelihood of SAB Miller having to end its interest in Miller Coors. This wouldn’t be too much of a downside because it could simply enter an intra-company arrangement with the Anheuser-Busch operation.

It is perhaps AB InBev’s luck that Heineken rejected the SAB Miller deal because a prospective take-over or merger would seem unlikely as a SAB Miller-Heineken concern would be a similar size to the Belgian behemoth. So where does that leave Heineken? Apparently there are now rumours of Molson Coors and Heineken coming to some sort of arrangement. This could see the houses of Molson, Coors and Heineken coming together to create one big happy family.  Although, such a deal could be interesting in terms of both breweries operations in Cork. In the meantime, Heineken is considering the sale of its Czech operations to Staropramen, owned by none other than Molson Coors (source: Reuters). We just have to wait and see what Diageo and Carlsberg responses will be.

As I said, it’s all confusing and that’s why I think so many people enjoy the small, independent and local aspect of the craft beer movement. Less focus on the bottom-line, more on the product. However, an eye will have to be kept on the continued consolidation within the beer industry because of impacts on distribution, sourcing of raw materials and bottling. Macro-beer will continue to be like the cheesy American soap operas.