Get the app today! Download iPhone App Download Android App

Could Budweiser Be Losing Its Fizz?

Published on Jul 30 2010 1:53 PM in Drinks

Could Budweiser Be Losing Its Fizz?

Over the four weeks of the FIFA World Cup, beer fans around the world saw more TV ads and posters for Budweiser than any other beer brand as AB-InBev’s “Budweiser United” marketing programme kicked in. And the Belgium-based brewer will be hoping the campaign was a successful, with consumers raising a glass of their beer in celebration. It is an important time. In Budweiser’s home market, where sales have been declining and football is not exactly a high profile sport, AB-InBev executives know reversing the slide will take more than a sports sponsorship. US beer consumption is falling, although there are signs of life at the top end of the market. Now, however, with much of the financial and operational challenges that came with InBev’s audacious $52bn acquisition of Anheuser-Busch in 2008 behind it, boss Carlo Brito insists the company is committed to building up Budweiser in the US and rolling out Stella Artois there as well. Despite the financial progress, the performance of Bud remains a concern. “Stabilising Budweiser is so important for us,” said Dave Peacock, president of AB-InBev’s US operations. In 1988, Budweiser’s share of the US market topped out at about 26 per cent, while its fledgling Bud Light brand was breaking through the 5 per cent level, according to the company. For the past 22 years, Anheuser-Busch let Budweiser’s share of the US market decline because consumer tastes were shifting towards lighter brews and growth from its Bud Light brand more than compensated for lost sales of Budweiser. In 2009, Bud Light’s market share was 19.3 per cent, according to Beer Marketer’s Insights, and Budweiser’s share had fallen into single digits, at 9.3 per cent, after a drop of almost 10 per cent from 2008.“There was a trade-off between Budweiser and Bud Light,” says Peacock. “But we’ve got to put a floor in it [the flagship brand’s decline].” The two brands are still the largest selling beers in the US, but at its current rate of erosion, Budweiser is perilously close to falling behind the next leading brand, Coors Light, which grew slightly, amid an overall decline in US beer sales last year, to an 8.3 per cent share. The next largest brand, Miller Lite, dropped 6.6 per cent last year and stands at a 7.7 per cent share, according to BMI. The company touts its turnround of Stella Artois as an example of its ability to take a product that has lost momentum and re-position it for growth. Budweiser “will be a classic turnround story, like Stella Artois in the UK”, Mr Brito said. Mr Peacock said AB-InBev was still figuring out its strategy for turning around brand Budweiser, but that certain elements of Bud’s heritage were “non-negotiable”, such as its its red colour (compared with blue for Bud Light), its “beechwood aging” brewing process, which is unique in the market, and the product’s association with Clydesdale horses, which used to pull the company’s delivery wagons in the pre-automobile era. (22 July) © 2010 - ESM: European Supermarket Magazine

Share on Facebook Share on Twitter Share on LinkedIn Share via Email