Why beer can learn from spirits

The sales of big beer brands is dropping across large parts of the US and Europe and Chris Cassell, managing director at independant drinks marketing company White Label, explores how these brands should follow in the footsteps of spirits.

Remember Budweiser? The “King of Beers” has lost its crown. The new year has been bad news for what was once the best-selling beer in America. It’s now not even in the country’s top three best sellers.

But wait. One brand’s fall from grace doesn’t necessarily make a trend. All you have to do is take a closer look at all its competitors. Between 2016-2017 shipments from the ‘Big Five’, Anheuser-Busch InBev, MillerCoors, Heineken, Pabst and Diageo all fell by 14%.

Why? Because mass beer’s been hit by a double whammy.

THE ONE-TWO PUNCH

Firstly, there’s been a step change in the global alcohol sector, a trend shift that’s had a real impact. People are drinking less, but better. They’re looking for more flavourful, better quality drinks and they’re not afraid to pay for them. Bland is bad.

And then there’s the rise of craft. In the UK in 2017 the number of breweries exceeded 2,000 for the first time since the 1930s. It’s a similar story in the US where 83% of drinking-age Americans now live within 10 miles of a brewery.

Until now, the Big Five’s main strategy has been to buy out the competition.

These acquisitions have had mixed success. For Lagunitas it seems to have worked. This is a good example of a craft beer that’s gone from strength to strength after its acquisition by Heineken. Foodable Network compared overall sentiment before and after they took them over. They reported sentiment rise of 19.68 two years after the buyout. But others haven't been as lucky. Goose Island anyone? There’s a growing backlash against craft beer "sellouts".

HOW CAN BIG BEER RESPOND?

Mass beer’s biggest problem is that, more than ever, people are buying philosophies, not products and services. Choosing craft beer suggests you’re more interesting, you care about small independent local businesses and you’re open to new exciting flavours.

What does mass beer say about you when you order it at the bar? Who wants to be the lager guy surrounded by IPAs, stouts and farmhouse ales? Mass beers are learning that trying to appeal to everyone, appeals to no one. ‘Open Your World’, ‘Probably the Best Beer in the World’ and Bud’s ‘America’ campaign aren’t resonating with people because they’re not speaking to consumers. They’re not connecting on an individual level.

ARE YOU TALKING TO ME?

There is one mass beer that’s engaging with consumers on an international level. You won’t be surprised to hear that it’s a beer that looks and tastes different to any other and is owned by Diageo.

The brand we’re talking about is on a mission to find and celebrate the most interesting characters and stories about people across the world.

Guinness’ campaign, “Made with More”, gives a platform to “those with the confidence to carve their own path. They’re reaping the rewards for building meaning into their beer - a 4% sales increase in 2017. This bright beacon brand means there’s hope for mass beer.

In the spirits industry, brands are much better at taking a stance; they know they’re not for everyone and they’re ok with it. That fact alone gives them the leeway to carve out a space they can call their own.

Mass beer brands need to stop trying to appeal to everyone. In a world where we’re all striving to define ourselves through the brand choices we make, mass beer needs to give people a reason to buy their beer. People don't buy what you do, they buy why you do it.

Taking this path might mean some short term suffering. But it could also be the reason they’ll survive in the long term.

IMMTATION IS FLATTERY

Spirits have got it right, and there’s so much to be inspired by with some brands. Look at what Illegal Mezcal did in the streets of Miami, New York and LA. They rose to fame by plastering the walls with anti-Trump propaganda posters. It was all in the timing - they were quick to respond to Trump’s announcement that he was running for president and they benefitted from their bold approach. It was clear they weren’t Trump fans - understandable coming from a Mexican brand.

OK, so there were people who disagreed with the campaign – they won’t be grabbing a bottle of their mezcal any time soon - but they made a real connection with millions of others.

This approach may not work for mass beer brands because mezcal is niche and Illegal Mezcal is a relatively small brand. But look at Smirnoff - the number one brand in the number one spirits category by volume in US. In 2017 they launched a series of out-of-home ads across the US featuring the claim:

“Made in America. But we’d be happy to talk about our ties to Russia under oath.”

That statement was in response to growing calls for President Trump to talk about alleged ties to Russia under oath. This type of marketing is keeping brands like Smirnoff right at the top.

BEER TO BELIEVE IN

Despite Guinness’ example, the beer industry’s been complacent in celebrating progressive attitudes. Few beers support the LGBTQ community for example, while 
Stolichnaya Vodka has had great success through their long relationship with them.

The question that mass beer needs to ask itself is what does it believe in as a brand? What change does it want to make? Carrying on regardless is not an option. And pleasing everyone is impossible.

The biggest learning from the spirits world and from the craft beer movement is about committing to being ‘you’.