MARKET STUDY BEER REBRANDING
Beer Rebranding. Only way to win.
“Beer consumption is declining. Even craft beer is a victim of the no brand loyalty movement. Beer rebranding may be the only answer.”
An in-depth market study on the beer rebranding and the category
A beer rebranding market study? Yup. The beer market is rife with new entries and repositioning of long standing beer brands. It’s time for someone to step up to the plate call a spade a spade.
There is very little difference between beer brands. Are there marked differences in beer styles brands? Not so much.
Understanding that market truth about beer rebranding is a key to success.
Let’s be fair. All the beer brands have relied on the emotional foundations of brands to elicit loyalty and trial.
In blind taste tests, conducted by Resultant Research (our market research arm) no one can tell the difference in tastes beyond the normal ranges of randomness.
MicroBrews are part of the beer rebranding market study
The micro beer market is growing at an amazing rate. But the manufacturers (brewers) believe the secret to their success relies on a great taste.
Every successful brand needs to salute great product. You will never be a successful beer brand if you don’t make a well-crafted product. It is a table stake in the category.
When was the last time you heard someone at a bar tell the bartender “That was a terrible tasting beer. Might I have another and while you’re at it, buy a round for the bar”?
Of course, we like the brand of beer we drink.
Just don’t underestimate the emotional impact a brand association makes on our personal choices.And, its influence in beer rebranding.
Every beer drinker brings something to the party. They bring their own expectations to the brand experience.
Successful brands manage that expectation. That is what brand management is about.
The Beer Franchises
The Budweiser franchise gets it. But, they need to start looking at the entire franchise and not the singular sub-brands. Budweiser may be dipping but Bud Light is healthy. Think of light beers as a style, not a brand. Not so different from a Pale Ale.
Understanding that dynamic is a defense of why Budweiser spends so much energy and cash on the television campaigns.
Look at the recent Bud Light campaign Dilly Dilly.
The beer market is increasingly fragmented. More players dividing a shrinking base
A worthy glass.
The beer category is in flux. Light beer is taking over the general market
If you think it is easy to create a consistent product on the scale of Budweiser think again. It is immensely hard. A science. If it were easy everyone would do it.
Start at the beginning
So, let’s start our beer rebranding market study here. Consider this. When Belgium-based 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 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 tap-rooms)
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 major US Lager brands: Budweiser, Miller and Coors.
This 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 major beer rebranding? We think so.
Budweiser will come back
Here is a prediction for this beer rebranding market study. Budweiser will make a comeback.
Particularly if you are smart enough to not separate STYLE from brand name.
Overall, Bud still holds more than twice the market share of its nearest competitor, Miller.
But, there’s something about ABInBev’s history that suggests it can reverse the trend. (Read how the big guys are getting into the craft beer business)
The entire alcoholic beverage market
But beer once held 60% of the market, so the trend is alarming. Spirits and wine are getting more aggressive in their marketing. There are now TV spots for Yellow Tail wine 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 Miller and Coors. Below we’ll look at the major brands and these two are certainly aiming for Budweiser by joining forces in the US market as MillerCoors. (SABMiller of London owns Miller and Molson owns Coors.)
Still, if a new trend will emerge, it’s that Budweiser will remain the King of Beers.(Read about the important market research that predicts behaviors)
No beer rebranding market study can ignore Budweiser. The purchase of Budweiser by ABInBev 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 ABInBev to the U.S. made Bud’s brand loyalty a little weaker for a time.
Bud has heritage
Years ago, and occasionally still, Budweiser was in full-on “dumb guy” mode with its advertising. It created spots around dofus twentysomethings in search of a great beer, often to comical effect.
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.
Like many companies, ABInBev 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 most 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 becomes meaningful to those who believe in drinking the right beer correctly. Most importantly, they believe in that the idea of taking care is important. (In effect, it’s saying that other beers are not important and careless. Like fast food.)
A brand face is the description that the audience sees themselves as being—when they use the brand, is special and discerning.
Why Stella is different than Budweiser
Within a company as large as ABInBev, with operations in more than 30 countries, the same folks guiding the Stella brand are not the same ones guiding Budweiser.
But there was an interesting take during a Super Bowl when Budweiser focused on heritage.
It hit the ABInBev dilemma (both the positive and the negative) head on.
Budweiser (the entire brand portfolio) is still the market leader – both in the US and globally. It can change the direction of its falling sales by tapping into what has made it one of the most powerful 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.
Speaking of which…
Stella has taken its place among beer royalty in the US 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 some sort of 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 are moving away from that thinking, Miller is now attempting something different.
Trying to build on its own equity (it thinks) be 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.
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 obviously lacks having a unique and meaningful brand position. If it doesn’t take those important and difficult steps to relevancy, it will continue to lose market share.
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.
Budweiser sells emotion
It was only a matter of time until a light beer passed the long-standing Budweiser.
The top four beer brands in the US – 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 the way 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 a nice innovation (that the rest of the industry will soon copy).
Not positioned against anything. No one would claim “warm” beer, so “cold” doesn’t present a true choice.
“Cold” does feed into the image of Coors being from Colorado, but it does not reflect who the consumer wants to be when they drink Coors. It’s about the can of beer.
Instead, the rise of Coors Light (read about Coors light here) is most directly attributed to a market drinking more light beer and the rest of the competition still in branding flux.
How many ways can you sell the sells emotional value of COLD?
Banquet Beer. Quirky.
Coors light. Moved passed Budweiser in sales.
There’s a simple reason for this, of course.
Men are always the main target audience for beers, and sports is a direct way to connect to that “maleness” beer brands often think are so important.
Black Label Beer. Old school.
Imports (Non-U.S. beers)
Like the beers in the US, those in the rest of the world are basically staying pat in terms of 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 and, what might be most shocking to US consumers, is that Victoria Bitter has been that country’s most popular beer for more than two decades.
The reason for the stability is because, like in the US, the brand promises, messages and tone are not that different than what is in the US.
Most themes are dominated by male bonding (Canada’s Labatt Blue, UK’s Carling, Czech Republic’s Gambrinus and Belgium’s Jupiler) along with racy tones (Brazil’s Skol), high lifestyle (Japan’s Asahi Super Dry) and even “cold” (Victoria Bitter).
The status quo remains because all across the world, beers are aping each other – which leads to stagnation in the market. Therefore, long-time market leaders stay there while the competition slips trying to climb up the ladder.
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.
This has long been the best-branded beer in the US.
Corona sells summer celebrations
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 message than any ad in the US or elsewhere.
Labatt’s familiar tone and message is consistent with ABInBev. ABInBev, which also now owns Budweiser.
But ABInBev also owns Stella Artois. Still, the beer industry is becoming increasingly incestuous. Molson owns Coors and Carling. But, Fosters owns Victoria Bitter.
Cross pollination equal 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 Jupiler.
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 are.”
The problem, as in the US, is that every beer takes that strategy.
The tactic by itself is fine. 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. Whether it’s a US domestic or an import, Corona, Stella Artois, Guinness and, to a lesser extent, Heineken.
Czech beer. The Pilsner folks.
Guinness is an interesting brand. Sometimes, they reach into 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. It works on a couple of levels. Certainly it powerfully embraces the heritage of the brand.
The beer you have been practicing for. Guinness.
Beer rebranding market study summary
This is how the beer situation stands: Budweiser is still the market leader (both nationally and globally).
However, it has lost some market share after by ABInBev purchase. Coors Light has made inroads and Miller continues to flounder, while spirits are taking market share away from the beer category itself.
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 with market share for the category at 12.3% as these “serious” beer drinkers consider the big American lagers a waste of time.
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.
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.
There are also 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. In fact, that’s the reason why 165 breweries closed in 2017, even though more than 1,000 opened. The category is simply 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, 90 minute IPA, Anchor steam and no 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 with the launch of 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 for some of the leading 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 the 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 loyal to craft beers, not to one individually.
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, beers that are dying and not light beers.
For such a mature and competitive category, the beer industry does little positioning against each other. Instead, they 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 increasing.
The takeaway from this beer rebranding market study it is this— Brand as it is used now doesn’t move market share. The art of brand as it reflects whom 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 brand in this way.. Budweiser, as a parent brand, is the standard bearer of this art 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 opportunity.
In fact, the one in the most trouble, Miller Lite, has the greatest opportunity. The beer is basically carrying empty luggage. It can still fill it up, but time is wasting. To us its own old ad language, it’s time for Miller to “man up.”