The Wall Street Journal posted this article today, detailing how Luiz Edmond, Anheuser-Busch InBev’s president of North American operations, plans to get Americans to stop ditching their brands. Bud Light and Budweiser keep losing drinkers to smaller breweries and liquor and they’re not really okay with that.
Here’s some numbers for those of you wondering just how much they’ve lost:
- U.S. Shipments have fallen for three consecutive years, with a 3.2% drop over the last year
- Since 2008 the share of the U.S. beer market has fallen from 48.9% to 46.9%
- Operating margins have increased more than 10% over 3 years
Anheuser-Busch is hoping to bring some of their long lost drinkers back with 19 new products that will launch in the U.S. this year, including small-batch “craft” brews, cider, and more tequila and tea based malt beverages. Bud Light Lime-a-Rita, an 8% ABV beverage that will launch in April, supposedly tastes like a margarita.
The Stella Artois brand grew 24% last year and Goose Island experienced more than a 20% growth in that time, so it’s not all bad news. A-B also has big plans to increase the alcohol content in light beers. Bud Light Platinum, which has already captured more than a 1% market share, could be the first of many. Perhaps the demand for Platinum can help them win their distributors back from the rival brands they left for.
All of Mr. Edmond’s strategies sound like smart ideas but I’m interested to see how well they actually work.
Coincidentally, Anheuser-Busch’s loss in market share is happening as production at hundreds of small, independent brewers grew 13% to more than 10 million barrels, a new high. The total U.S. beer market is about 200 million barrels.
With most things headed in the downward direction, can Budweiser bounce back? With a lot of hard work and the right leadership, it’s definitely possible but we’ll just have to see.
As much as I love my craft beer, the business-minded side of my brain is intrigued by the strategies they’re going with and I’m excited to see how they do.
Regardless of the effectiveness, their somewhat desperate efforts will certainly create a buzz.