Budweiser: Brewed the Hard Way. A Reality Check.

Budweiser came to the Super Bowl with its balls fully inflated, and from the reactions they're getting to their 60-second "Brewed the Hard Way" television commercial, you'd think they ridiculed Jesus or something. Touting Bud and its brewing process over craft beers, and shining a light on craft beer drinkers and their ... discriminating habits, lit a fire. An inferno. Craft beer drinkers have come out of the woodwork in full defense mode, along with congressmen, senators and all those sensitive, self-justifying, sophisticated beer drinkers who just don't understand that they have certain taste quirks and habits that just don't jive with the general beer market. After all, research shows that the number one driver of craft beer purchases is "style."

Or, the style they wish they had. Or, maybe it's the higher alcohol content, since most craft beers have higher alcohol by volume (ABV) than macro beers -- many of them over 10 percent! Macros are a comparatively modest 5 percent, give or take. The top 100 beers in the world by alcohol are all craft beers -- and they range from 14.5 percent ABV to a whopping 65 percent ABV!

Talk about style.

Like the commercial says. Budweiser: It's... brewed the hard way.

You've seen the commercial, which they continue to run: created and produced by Anomaly, NY (who got Budweiser back on the right track after they won the business and repositioned Bud as the brand leader they once where -- and still are for many beer drinkers), it's brilliantly shot and moves at a good pace, intercutting Budweiser's brewing features, owning the reality that it's a macro (mass market) beer.

"Let them sip their pumpkin peach ale."

Damn straight!

Then here comes MillerCoors with a tweeted ad headlined, 'We think all beers should be fussed over." Oh, man. Get over it. At least they acknowledged that "We believe all brewing is a craft." Which has to include Budweiser, too.

Anyway, given craft beer drinkers' rabid reactions. they must have little confidence in their beers, or themselves, otherwise, why bother? Who cares? "I've got my beer -- or more accurately -- my distinctive tasting, more expensive beer for each and every special occasion -- and I'm never drinking Budweiser anyway (except maybe when I'm alone) -- so piss on your commercial."

Why so defensive?

Craft beers have been the hot topic in the beer and beverage business for years, with all kinds of speculation that they would take over the beer category, crowd out the less distinctive major U.S. brands and appeal to a majority of beer drinkers who care about taste, and so-called quality. "The future of beer," says Ninkasi Brewing, Oregon.

Ain't happened. And it won't. I said so three years ago on a CBS This Morning News segment about beer, and I'm saying it again: Won't happen. Not in this lifetime anyway.

And this from Benj Steinman, Beer Marketers Insights, craft is "a much broader, more powerful phenomenon that's really reaching into ... different corners of the American consciousness ... craft is now something that is large."

Really? Consider this: there are some 3,100 craft beer brands sold in the U.S. and yet since their inception they've barely managed to generate as much volume as Budweiser does alone. It's taken three thousand one hundred brands of craft beers to gain 7.8 percent of the U.S. beer market, which barely equals what Budweiser still holds, all by itself. And it's taken decades.

Like it or not, the vast majority of U.S. beer drinkers' tastes just don't skew that way, not even close, never have. Otherwise three of the five largest selling beers wouldn't be light beers (and the other two, macros). It's not for lack of flavor options either: peanut butter, strawberries, key lime pie, chocolate, coconut curry, banana bread, coffee -- even coffee once ingested by small mammals -- and beard yeast! -- have all been offered in craft beers. And I'm not making this stuff up.

Anyway, like the commercial says, Budweiser "... is not brewed to be fussed over."

And where does Sam Adams fit in to all this, with at least 3 million barrels sales volume? First of all, soon as they reached the original volume limit rule to officially qualify as a craft beer (less than 2 million barrels), the Brewer's Association simply upped it to 6 million bbls). Is it really craft beer? Lot of beer drinkers don't think so, and even the Boston Beer Co is hedging their bets: they've just introduced two new (and authentic) craft beers to their Rebel IPA family: Rebel Rider Session IPA and Rebel Rouser Double IPA.

So here's something else to think about: without Sam Adams' 3.4 million bbls (as of 2013), the craft beer share would be down to 6.2 percent.

Yes, the craft/microbrew category continues to grow, producing bold plus-growth percentages over a small base. And they own a 14 percent dollar share (with their 7.8 percent market share) of the $100 billion market -- so what's that say about how much you're paying for this stuff, and how long will you have deep beer pockets? And is it really worth it?

Face it -- these guys are never going to drink Budweiser.

Besides... Budweiser is "brewed for drinking" ... not "dissecting."

Meanwhile A-B InBev faces another argument (which they should also ignore), since they own several craft beers and had just acquired the brewing company that created "Gourdgia on My Mind" beer (unbeknownst to the Budweiser team or agency at the time), whose taste is described as "Peach pecan pumpkin amber..." oh, man! Anyway, all this is is classic portfolio management. Budweiser draws a line in the sand to protect what territory it has left as the once King of Beers. And appropriately, A-B InBev continues to market their own craft beers with a different strategy, targeted to an entirely distinct segment of beer drinkers, in an ongoing attempt to grab some of that 16 million barrels of more profitable craft beer and protect their flanks. And all the rest of them will be aiming at the category's 200 million barrels. Guess who wins?

Bud's controversial ad is actually showing some positive signs: According to a spokesperson from Ace Metrix " ...the :60 and :30 spot, "Brewed the Hard Way," have 'earned strong emotional sentiment scores, which is particularly unique for beer ads.' "The campaign has 'performed well with all types of beer drinkers'."

Finally, Budweiser closes "Brewed the Hard Way" with "This Bud's for You," a renowned campaign that made beer business history back in the '80s, growing Bud's market share to a 26 in five short years. I know, I was on the D'Arcy Advertising team that launched it against Bud's image as "My dad's beer," (sound familiar?) and then led its roll out for those five years, supported by ground-breaking advertising to market segments -- Blacks, Hispanics, even women.

This Bud's for You.

Now, there's a big idea, but if Budweiser's aim is to be "cool," as some insiders have described it, then it's not gonna happen by being big. Big is not cool, but the Bud brand could be, again.

Meanwhile -- "This Bud's for... Me!"

Tim Arnold
19 Feb 2014