Can Bud Be Saved? America’s Biggest Brewery Keeps Losing Customers

The Wall Street Journal posted this article today, detailing how Luiz Edmond, Anheuser-Busch InBev’s president of North American operations, plans to get Americans to stop ditching their brands. Bud Light and Budweiser keep losing drinkers to smaller breweries and liquor and they’re not really okay with that.

Bud Lime-A-RitaHere’s some numbers for those of you wondering just how much they’ve lost:

  • U.S. Shipments have fallen for three consecutive years, with a 3.2% drop over the last year
  • Since 2008 the share of the U.S. beer market has fallen from 48.9% to 46.9%
  • Operating margins have increased more than 10% over 3 years

Anheuser-Busch is hoping to bring some of their long lost drinkers back with 19 new products that will launch in the U.S. this year, including small-batch “craft” brews, cider, and more tequila and tea based malt beverages. Bud Light Lime-a-Rita, an 8% ABV beverage that will launch in April, supposedly tastes like a margarita.

The Stella Artois brand grew 24% last year and Goose Island experienced more than a 20% growth in that time, so it’s not all bad news. A-B also has big plans to increase the alcohol content in light beers. Bud Light Platinum, which has already captured more than a 1% market share, could be the first of many. Perhaps the demand for Platinum can help them win their distributors back from the rival brands they left for.

All of Mr. Edmond’s strategies sound like smart ideas but I’m interested to see how well they actually work.

Coincidentally, Anheuser-Busch’s loss in market share is happening as production at hundreds of small, independent brewers grew 13% to more than 10 million barrels, a new high. The total U.S. beer market is about 200 million barrels.

With most things headed in the downward direction, can Budweiser bounce back? With a lot of hard work and the right leadership, it’s definitely possible but we’ll just have to see.

As much as I love my craft beer, the business-minded side of my brain is intrigued by the strategies they’re going with and I’m excited to see how they do.

Regardless of the effectiveness, their somewhat desperate efforts will certainly create a buzz.

[techtags:Budweiser, Bud, Anheuser-Busch, A-B]

4 Comments

  • Tom Rees March 29, 2012 @ 3:23pm

    Ya know, if Bud wanted to improve sales, they need to improve taste, not come up with a bunch of cutsie new drinks. Compared side-by-side, Bud/Bud Lite to many (and about all craft brews) other beers, and it has no real distinguishing taste. While it is phenominal the consistency they have from batch to batch to batch, brewing something that is like alcoholic water just doesn’t get it when there are producers who have beer that has real taste to it. Increase the malt flavors and give it a hops punch and I would imagine the sales will follow.

  • Hannah March 29, 2012 @ 3:28pm

    Tom Rees – As a full-flavored, craft beer lover, I couldn’t agree with you more.

  • bierfesten March 31, 2012 @ 9:53pm

    It is the business side of my craft beer loving brain that also wants to know the methods for which the large boys will fight back those micro % points that Craft is taking. Ultimately these cutesy beers sell to new drinkers who don’t want to drink a beer that seems mispect ‘Lite’ but if they drink something that sounds like a Hard Metal they will think its cool.
    The one thing AB has is distribution and knowledge how to sell large amounts of light beer.

  • O'Shea Shenanigans April 6, 2012 @ 10:20am

    Well said Tom Rees. Here Here! Cheers!

    Note to Bud LIght…If I wanted a Margarita…I would…ya know…order a margarita.

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