Dive Brief:
- Despite strong profits following its acquisition of SABMiller last year, AB InBev has struggled to contain sales losses with America’s most popular beer brand, Bud Light, according to The Wall Street Journal. Since 2010, Bud Light’s market share has slipped from 19% to 16%.
- CEO Carlos Brito said he believes the company’s “Famous Among Friends” ad campaign will improve volume sales and market share. “We believe the campaign has legs,” he said during a recent conference call with analysts.
- Industry observers, however, aren’t so optimistic. “There is no end in sight to the weakness” of Budweiser and Bud Light, a European beverage analyst told the newspaper.
Dive Insight:
AB InBev CEO Carlos Brito has a lot of faith in Bud Light’s latest ad campaign, “Famous Among Friends,” which celebrates friends coming together over the beer. But Brito expressed a similar enthusiasm for the brand’s recent politically themed ad campaign starring Amy Schumer and Seth Rogan that kicked off during the Super Bowl. The celebrities tried to inject star power and humor into the brand’s image, but ultimately failed to move the dial for America’s bestselling beer brand.
A similar story played out with the company’s “Up for Whatever” ad series, which despite staging elaborate stunts like a full-size game of Pac-Man and ping-pong with Arnold Schwarzenegger, failed to lift sales of Bud Light.
Indeed, Bud Light relies heavily on marketing and advertising that sells cans, kegs and bottles of its beer — something that many industry observers have criticized. In the past, the brand has relied on innovations such as twist-off caps, thinner aluminum cans and cold labels, as well as extensions like Bud Light Lime, Lime-A-Rita and Platinum. But the company has run through many of its most promising bells and whistles, leaving it beholden to high-powered ad firms to drive growth.
There are other forces chipping away at Bud Light’s dominance. Overall beer consumption is down, a trend that hits larger brands particularly hard. Craft beer also has cut into sales of mainstream brews, though that may become less of a problem for AB InBev and others with sales of the niche beverages beginning to slip following years of breakneck growth. Mexican beers like Modelo Especial and Dos Equis may pose a challenge as they find resonance with light beer drinkers. According to Ad Age, Modelo Especial recently overtook Bud Light as the top-selling beer in the Los Angeles market.
Some problems are out of the company’s control, but many are self-inflicted wounds. AB InBev is seeing some sales cannibalization between Bud Light and other brands, particularly with its other low-calorie performer Michelob Ultra. In an earnings call last year with analysts, Brito said “there is some cannibalization," adding Michelob Ultra is sold at a higher price point and doesn’t seem to cannibalize the same drinking occasions as Bud Light. He said the company is working hard to make sure there as few overlaps as possible between the two brands. To be sure, turning around Bud Light is not going to be an overnight success for AB InBev, but the beer giant is hoping that despite failed attempts, something will eventually work.