ABI’s Free Beer Gambit

free-beer
USA Today is reporting that Anheuser-Busch InBev‘s plan to reverse slumping sales trends is to give away their beer. Not all of it, of course, but part of a new marketing barrage to begin next Monday includes stepping up sampling significantly, to record levels of free beer giveaways.

According to the article, Latest ad strategy to freshen Budweiser’s image: Free beer, by Bruce Horovitz, ABI is poised to “announce plans to push free beer and a hipper Bud image to younger beer drinkers over the next several weeks” in an effort to reach the under-30 crowd growing up under the influence of the more flavorful and more local craft beer segment.

The new marketing campaign will feature the tagline Grab Some Buds, a phrase ABI has applied to trademark, and starting Monday, Budweiser “will unleash its biggest-ever national free-sample effort in trendy bars and eateries.”

From the USA Today article:

The hype culminates on Sept. 29, when the brand hosts the “Budweiser National Happy Hour,” a bid by Bud to nudge folks to at least try a free brewski. The free samples for those 21 and up range from 6 ounces to 12 ounces, depending on state and local rules.

At issue: a brand that’s lost mojo. Bud unit sales were down 9% last year and are down the same this year, says Beverage Marketing Corp. Beer drinkers have lost loyalty to Bud for the past seven years, research firm Brand Keys reports. Bud’s ranking among national product brands slipped from 16th in 2003 to 220th in 2010.

Here’s their four-prong approach:

  1. Sampling. A-B will hand out 500,000 samples by mid-October.
  2. Facebook. Bud plans to partner with Facebook so folks turning age 22 and up can get a free beer on birthdays.
  3. New ads. Ads air Saturday about anticipating good times with Bud.
  4. Focus. A-B will focus 95% of TV ad time on Bud Sept. 25 to Oct. 3.

The article concludes doubtfully, with “Brand consultant Robert Passikoff [expressing] serious doubts about Budweiser’s effort. ‘They’re in trouble because they don’t know how to talk to consumers,’ he says. ‘They no longer know how to create an emotional bond.'”

Frankly, I think they’re in trouble because they’re not keeping up with what customers want. All their “fixes” for dwindling sales (though to be fair sales are still ginormous) involve the same old tried and true marketing tricks that have seen them through the last half-century. Sampling, new ads and more TV spending are hardly revolutionary, and neither is finally trying to figure out how to use Facebook.

ABI is losing the battle for customers perceiving them as a patriotically American company, however jingoistic and emotional that is. They’ve also taken hits for the way they’ve treated employees — laying off hundreds (is it thousands yet?) — and keeping the remaining ones fearful for the next round of layoffs and working many jobs and too many hours. They’ve also taken a hit for asking suppliers to wait as long as four months to be paid.

ABI could produce beer every bit as flavorful as the best craft beer, but they wouldn’t know how to sell it. It’s not their business model. ABI president Dave Peacock thinks sampling will work, of course. “‘When we get the trial, we find we have a positive result,’ Peacock says.” But I honestly can’t see how sampling will be a positive experience for young people that recognize there are more flavorful alternatives to mass-produced American-style light lagers.

I think the Hans Christian Anderson fairy tale, The Emperor’s New Clothes, provides a useful analogy. If we think of flavor as clothing, sampling young people on Budweiser will only serve to reinforce that indeed the Emperor has no clothes.

Comments

  1. says

    I thought the idea of giving away free samples was to introduce people to something they haven’t tried before in the hope that once they try it they will become so enamored of the product that they’ll pay for it. I think everyone of drinking age pretty much knows what Bud tastes like. It’s just that more and more people don’t like the taste, or lack thereof so they’re voting with their wallets and increasingly choosing to reject that product. Giving it away and buying more TV time is not going to change the fact that more and more people just don’t want to drink Bud. The first rule of marketing is to give your customers what they want, not try to shove it down their gullets.

  2. Rory says

    I can’t help but think that if a craft brewer, say Mt Shasta, used a phrase like “grab some buds” every govt. agency involved would slam down on them for promoting pot. Shows where the power lies.

    And I agree with Chuckl, giving it away won’t change anything for them.

  3. Mr. Nuts says

    ABI’s completely screwed up. They’re channel stuffing to make quarterly numbers BIG TIME.

    My local liquor store has cases and cases of ABI products in their back room and out in their aisles. I asked the owner what was up with that — and he mentioned getting an amazing deal if he loaded up.

    ABI can produce craft beers. However, their attitude needs to be changed. In an ideal world, their breweries would be operating 24/7 pumping out Bud and BL — with minimal downtime for packaging changeovers. They’re so accustomed to operating at massive scale they think turning out a small batch of highly profitable product is a waste of time.

    ABI and AB, when still independent, also don’t know what the word “brand” means, either. Seriously, buying Rolling Rock and closing the Latrobe Brewing Company in order to move production to Newark? They might have lots of MBA’s working for them — but they’re book smart and street stupid ones.

  4. Adam says

    The only people that are going to like this are the people that are out to get drunk.
    And everyone that has drank beer has come across this crap at some point. It starts in high school and usually lasts until they can buy something else on their own or they get a fake ID–and usually those with fake IDs are just out to get drunk and whatever is cheapest or available.
    AB just doesn’t want to acknowledge there are smarter drinkers in this country now. They either need to buy up local, small breweries and brew pubs or just prepare for getting less than 50% of the market (love to see them get less than 25% in the next 10 years). My guess is they ramp up there shadow brands and trick people into thinking they are drinking small brewery products.
    Someone needs to come out with a phone app that tells you the true force behind a beer so you aren’t fooled by another Blue Moon-like product.

  5. ozzy says

    really do they have to give away beer in order for people to like them it like kissing your sister it’s a kiss but it doesn’t taste good or it does it make it right so please really all the good people that worked at AB have long gone and they don’t know what there doing

  6. The Professor says

    Adam, I hear what you’re saying and actually agree with most of it with regard to the Budweiser promotion.

    But I don’t at all agree with the part about “tricking ” people, and the idea of Blue Moon “fooling” anyone.
    If any big brewers should actually make a beer that is more along the lines of some of the better so called “craft” brews out there (and we all know that they certainly can do it), who cares… as long as the product is good? (which opens a whole other discussion since what one person finds good, another will not)

    I’m actually glad to see the big brewers finally opening their eyes in recent times. Besides, as I’ve stated often, it seems pretty ridiculous to fault them for finally doing what we have been _wanting_ them to do for the last 40 years.

  7. Tony says

    Let em do it, I say,,, it’ll look ridiculous on them and if the TTB steps in they’d get to put the word censored over it and be oppressed… and thereby claim coolness… I wouldn’t be surprised if that wasn’t the plan anyway…   Anyway, this is like the other two CA breweries who recently declared indirectly that they really are for the Nov ballot item legalizing med pot… Those two brewers impose drug testing… Let them all walk the talk or else stop pretending… the hypocrisy of all three knows no bounds…

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