An in-depth market study on the beer rebranding and the category

The beer market is increasingly fragmented. More players dividing a shrinking base

A worthy glass.

Fragmentation. Beer rebranding market study.

The beer market is increasingly fragmented. More players are dividing a shrinking base.

If you think it is easy to create a consistent product on the scale of Budweiser, think again. It is immensely challenging. It is science. If it were easy, everyone would do it.

Start at the beginning

Let’s start our beer rebranding market study here. Consider this. When Belgium-based AB InBev bought Budweiser in 2008, we posed the question. Will it make a difference to American beer drinkers?

The Budweiser brand is Americana. “I’ll have a Bud” is as much a part of the American vernacular as “Bless you.” (Read a blog on the A.B. InBev purchase of SABMiller here.)

This beer rebranding market study will look at that prediction. It will also pose a new prediction or two about the future of the beer market. (Read the latest trend in brewery’s here — mini taprooms)

That was right and slightly off. We have a prediction to consider as we look at the domestic beer industry.

What we got right, what we got wrong

We’ll be concentrating on the influential US Lager brands: Budweiser, Miller, and Coors.

Where we right: Budweiser did drop a few points in market share, falling under the “monopoly” threshold of 50%, down to 46.4% in 2015.

Budweiser includes all the BUD brands. The market share of Budweiser itself fell to third place in 2018.

However, Coors Light took advantage, recently passing Bud as the nation’s second-best-selling beer behind Bud Light. Bud Light still dominates with double the market share of Coors Light.

But this represents a change in style preference rather than a beer preference. When it comes to American lager, Americans prefer light beer. End of story. Is this a call for a significant beer rebranding? We think so.

Budweiser will come back

Here is a prediction for this beer rebranding market study. Budweiser will make a comeback.

Overall, Bud still holds more than twice the market share of its nearest competitor, Miller.

But, there’s something about A.B. InBev’s history that suggests it can reverse the trend

The entire alcoholic beverage market

Of course, there are other issues. The industry is losing share to wine and spirits. Sales of spirits rose to 37.8% in 2019, while beer has stayed stagnant at 45.2%. Wine is a flat line of 17%. Beer revenue in 2020 is US$587,362m. Spirits and wine are getting more aggressive in their marketing. There are now T.V. spots for Yellow Tail wine, Tito’s Vodka, and 1800 Tequila.

Advertising is no longer the sole domain of beer among alcohol marketers. (Read about beer marketing and differentiation here)

Then there’s Molson and Coors. (Below we’ll look at the major brands, and these two are certainly aiming for Budweiser by joining forces in the U.S. market as Molson Coors).

Still, if a new trend will emerge, it’s that Budweiser will remain the King of Beers. (Read about the critical market research that predicts behaviors)

Beer Rebranding Market Study looks at Budweiser

No beer rebranding market study can ignore Budweiser. The purchase of Budweiser by A.B. InBev is cause for alarm.

So much of what Budweiser means to consumers is about being a hard-core American.

Budweiser’s imagery often reflects that. Coors Light will no doubt say it made strides through its “Cold Counts” campaign.

But, we believe the introduction of A.B. InBev to the U.S. made Bud’s brand loyalty a little weaker for a time.

Because Bud has a heritage.

Years ago, and occasionally still, Budweiser was in full-on “dumb guy” mode with its advertising. It created spots around twentysomethings in search of a great beer, often to comical effect.

Bud needed a change

That ploy was already getting old by 2008 because the competition went about copying it.

Bud Light hasn’t changed that approach all that much. But it – as we’ll see later – it just means all similar ads feel like they are for Bud Light. Even if Bud Light’s ad in January 2017 just about buds.

Beer Rebranding Market Study looks at A.B. InBev

Like many companies, A.B. InBev has its share of wins and losses. But one of its most successful is Stella Artois, which has grown 12.5% in sales in 2016 to become one of the perfect brands in the business

Let’s list the reasons for Stella’s brand strength. It has an identifiable brand equity marker in the shape of the glass.

Some of the most effective billboards have shown just the Stella beer in the Stella glass. Say nothing more.

Stella has meaning

Stella becomes meaningful to those who believe in drinking the right beer correctly. Most importantly, they believe that the idea of taking care is essential. (In effect, it’s saying that other beers are not important and careless. Like fast food.)

A brand face is a description that the audience sees themselves as being—when they use the brand, they are exceptional and discerning.

Why Stella is different than Budweiser

Stella beer rebranding market study within a company as large as A.B. InBev, with operations in more than 30 countries, the same folks guiding the Stella brand are not the same ones driving Budweiser.

But there was an interesting take during a Super Bowl when Budweiser focused on heritage.

It hit the A.B. InBev dilemma (both the positive and the negative) head-on.

Budweiser (the entire brand portfolio) is still the market leader in the U.S. and globally. It can change the direction of its falling sales by tapping into what has made it one of the most potent brands over recent decades.

Its Bud Light is still going strong, and it will continue to stay on top until the competition does something different and more meaningful.

Stella has taken its place among beer royalty in the U.S. market.

Miller (or should we say Miller/Coors)

Continuing this beer rebranding market study, know this. No one has copied the Bud Light tone more than Miller and failed to increase its market share in the process.

A few years ago, every beer ad centered around “dumb guy.”

There were, in a way, much like anything you’d see from Bud Light. (Coors isn’t much better, but at least it has a claimed value. Whether it’s believable or truly differentiating is another question.)

Most of them center around some sort of party or bar with great-looking girls and guys willing to do anything for Brand X beer in Judd Apatow-Seth Rogan-Jackass fashion.

Bud Light has owned that position, but the major competitors just copied it, thinking, “If it works for Bud Light, it’ll work for us.”

It doesn’t work that way, however.

Copying the market leader never works

When you copy the market leader, the consumer simply defaults to the market leader.

For example, we’ve done studies in which we show a series of ads – inserting a “dumb guy” beer ad in the mix – then later ask, “Who was the beer ad for?” Invariably, the answer is Budweiser, whether it was or not.

What do beer drinkers think?

Today, as a few beer brands move away from that thinking, Miller is now attempting something different.

Trying to build on its equity (it thinks) by telling audiences to “Hold True.”

But do the drinkers of other beers believe Miller Lite is authentic and therefore would switch

This is especially problematic for Miller as this approach never really worked in the first place for those other than Bud Light. Positioned as the most coveted beer – the underlying message in all of them – is not effective.

Of course, my beer tastes good

Current beer drinkers already believe their beer is good. Why else are they drinking it?

Miller, among all the major beer brands, is the most in need of a brand overhaul. (Read bout repositioning a brand here)

It lacks having a unique and meaningful brand position. If it doesn’t take those necessary and challenging steps to relevance, it will continue to lose market share.

Our beer rebranding market study looks at Coors

Coors is one of the most interesting brands of this beer rebranding market study. The “cold” campaign of Coors Light has overtaken Budweiser as the nation’s second-most popular beer.

There are sure to be congratulations within the MolsonCoors complex. But they should hold off the celebrating.

It was only a matter of time until a light beer passed the long-standing Budweiser.

The top four beer brands in the U.S. – and seven of the top 10 – are light beers, and the ascension of Coors Light mostly reflected the current taste of beer drinkers. What we see here is a trend, not a brand-creating preference.

What does cold mean?

Still, it’s a fair question. Of all the light beers, why Coors? For one thing, the nearest challenger is Miller Lite, and, as we’ve seen, it is stuck finding a way to be more relevant.

Coors Light ads are identifiable as being from Coors Light when it holds the “cold” position.

Budweiser’s own Natural and Busch Light are among the next three beers in market share (after Michelob Light). But Bud uses them as fighter brands to keep others – such as Miller High Life – from growing.

Coors light is cold

The “cold” campaign may tap into how drinkers want their beer, but the problem is that it is a table stake, what you need to have to even play in the game.

You can make any beer cold – although having a can that tells you it’s cold is an excellent innovation (that the rest of the industry will soon copy).

They position it against anything. No one would claim “warm” beer, so “cold” doesn’t present a real choice.

“Cold” does feed into Coors’ image of Colorado heritage, but it does not reflect who the consumer wants to be when they drink Coors. It’s about the can of beer.

We attribute the rise of Coors Light because the market drinks more light beer, and the rest of the competition still in branding flux.

Carling

There’s a simple reason for this, of course.

Men are always the primary target audience for beers, and sports is a direct way to connect to what “maleness” beer brands often think are important.

Beer Imports

Like the beers in the U.S., those in the rest of the world are staying pat in market leadership in their respective countries.

For example, while you might think Foster’s is the most popular beer in Australia, it’s not.

Victoria Bitter holds that honor; what might be most shocking to U.S. consumers is that Victoria Bitter has been that country’s most popular beer for more than two decades.

The stability is because the brand promises, messages, and tone are not that different.

Dominant themes U.K.’s bonding (Canada’s Labatt Blue, U.K.’s Carling, Czech Republic’s Gambrinus, and Belgium’s Jupiter) along with racy tones (Brazil’s Skol), high lifestyle (Japan’s Asahi Super Dry), and even “cold” (Victoria Bitter) abound.

The status quo remains because beers are aping each other across the world, which leads to stagnation in the market. Therefore, long-time market leaders stay there while the competition slips, trying to climb up the ladder.

Corona

However, there are exceptions to that lack of brand focus among light beers.

Corona Extra is the real mover in this market space because Corona has a definite brand – “Find Your Beach” – that looks and feels different than anyone else in the market.

Corona has been the best-branded beer in the U.S.

Labatt

Labatt (What beer rebranding market study is complete without it?)

Take, for example, this Labatt Blue ad. It’s no different in terms of tone and usage than any advertisement in the U.S. or elsewhere.

Labatt’s familiar tone and the message is consistent with A.B. InBev. A.B. InBev, which also now owns Budweiser.

But AB InBev also owns Stella Artois. Still, the beer industry is becoming increasingly incestuous. Molson owns Coors and Carling. But, Fosters owns Victoria Bitter.

Cross-pollination equals repeated themes. For example, Budweiser, Miller, and Coors have sports-specific ads. So do the ones in Europe, such as this one from Belgium’s Jupiter.

Jupiter

For those of you who can’t read German, the theme line here is: “Men Know Why.” That isn’t so far from Carling’s “You know who your mates U.S.”

Gambrinus

The problem, as in the U.S., is that every beer takes that strategy.

The tactic by itself is acceptable. It’s just like everything else in beer marketing. When that happens, brands all start to run together in the minds of consumers.

The brands with the most meaning step out of the usual beer comfort zone. It does not matter if it’s a U.S. domestic or an import, Corona, Stella Artois, Guinness, and Heineken, to a lesser extent.

Guinness

Guinness is an exciting brand. Sometimes, they reach into the coveted brand territory. Other times not so much. The best Guinness branding campaign featured the equity line “the beer you have been practicing for.

The new campaign speaks of the stout’s rich and full heritage. The campaign works on a couple of levels, and the campaign powerfully embraces the brand’s heritage.

The beer rebranding market study summary

Overall, beer sales were down by 2% in 2019. This is how the beer situation stands: Budweiser is still the market leader (both nationally and globally).

Here are some figures of market share from the USA today in 2017

However, it has lost some market share after by A.B. InBev purchase. Coors Light has made inroads, and Miller continues to flounder, while spirits are taking market share away from the beer category itself.

Craft beers

The category itself is rising, with market share for the category at 13.6.% as these “serious” beer drinkers consider the big American lagers a waste of time. Craft beer consumption is growing by 4% annually. Mostly from taproom proliferation.

Craft beers, however, don’t steal market share from each other

What we haven’t mentioned in this beer rebranding market study is the elephant in the room: Craft beers.

The category itself is rising, with market share for the category at 12.3% as these “serious” beer drinkers consider the big American lagers a waste of time.

There are several reasons for this increase. The number of breweries has grown, and the increased distribution of craft beers to bars across the nation has helped lift the category.

Craft breweries are popping up like fleas

Each time a new brewery pops up, craft beers have more opportunity to sell their beer. Distribution, once the main barrier to adoption for craft beers, is increasing.

More craft beers (more than we can mention in this beer rebranding market study) out there than ever, which means the category is increasing market share, but the individual players are not. Currently, there are 8,275 craft breweries. The category is merely getting crowded.

The issue with craft beer drinkers is that they display little loyalty. They drink whatever strikes them as new and different.

As a result, arriving on the shelf or bar ensures trial. But loyalty? A different matter. More about that in a moment.

Some of the craft beer giants

Samuel Adams, Sierra Nevada, Fat Tire (Stealing Share worked on the New Belgium beer brand), 90-minute IPA, Anchor Steam, and not many others to mention (a good article about them here) all share many of the same values.

They compete for the same shelf space and grow market share by launching flanker brands and styles.

Craft, is it all about distribution?

They are relying on distribution and the appeal of their packaging and name to gain acceptance. (There is, for example, a beer called Moose Drool. And it’s not bad.)

We have done research and brand projects for clients in the beer industry, including some of the top craft beers.

The brand face of the typical craft beer drinker is “new and different.”

We know of what we speak in this beer rebranding market study. That is, the usual craft beer drinker wants to try something new and different.

This is why they often drink local beer or something different than what they have been drinking.

Craft beer drinkers and loyalty

The problem for craft beers: Their drinkers are rarely brand loyal, unlike those who drink Bud, Coors, or Miller. The craft beer drinker is devoted to craft beers, not to one individual brand.

Because of that, individual craft beers rarely steal market share from others for an extended period. The same is true for the big three, although for different reasons.

It’s not from Bud Light that Coors Light is getting its increased market share. It’s from the middle crowd, such as Fosters or Michelob, dying and not light beers.

For such a mature and competitive category, the beer industry does little positioning against each other. Instead, beers tend to copy each other. Miller Lite copies Bud Light. Some even remember that Heineken went the “cold” route a few years ago.

The beer brands aren’t working hard enough

That means the increases and decreases in the market tend to be for reasons other than brand. Light beer is the dominant trend.

Distribution is increasing for craft beers (as well as many imports). There’s more choice. Spirits and wine are growing.

The takeaway from this beer rebranding market study; is this— as it is now, the brand doesn’t move market share. The art of brand as it reflects who the customer aspires to be is practiced by few.

A few winning beer brands

Only Corona, Stella, Guinness, and a handful of craft beers use a brand in this way. Budweiser is the standard-bearer of this art as a parent brand by playing its market leadership (read: heritage) beautifully.

But it’s a new world in which beer faces more competitors and increased challenges from spirits and wine.

The good news is that, because so few are practicing the art of branding correctly, there is an opportunity.

The one in the most trouble, Miller Lite, has the most significant opportunity. The beer is carrying empty luggage. It can still fill it up, but time is wasting. To us, it’s old ad language, it’s time for Miller to “find courage.”