Business

Beer companies market themselves into a corner

Beer rivals Anheuser-Busch Cos. and SABMiller PLC, by pouring millions of dollars into ads that reinforce a raucous, frat-boy image, haven't done themselves any favors. Now they need to undo all that hard work, says the new top marketer at Miller Brewing Co. "People will tell you that beer is not sophisticated enough, or stylish enough, to compete with wine and spirits," says Tom Long, Miller's chief marketing officer. "Why do they think that? Well, I believe it's because we told them to." As evidence, Long points to such recent beer commercials as Miller's own "cat fight" spots, in which two women duke it out and tear each other's clothes off, and spots for Anheuser-Busch's Bud Light featuring flatulent horses and a dog attacking a man's crotch. And let's not forget the bikini-clad twins for Molson Coors Brewing Co.'s Coors Light. Is it just a coincidence that while the beer industry has been hitting these advertising themes, three important consumer groups have begun to turn away from beer in favor of wine and mixed drinks? Baby boomers increasingly are drinking wine; young women now often find it more fashionable to drink a low-carb cocktail than a brew; and older members of the so-called echo-boom, the children of baby boomers born from the late 1970s through the early 1990s, also seem drawn to cocktails. "We've marketed our way into this problem," Long says, "and we can market ourselves out of it." In an unprecedented effort to reverse the industry's decline, Anheuser-Busch, which controls roughly half the U.S. beer market, is trying to drum up industry support for the equivalent of the dairy industry's popular "Got Milk?" campaign. Robert C. Lachky, Anheuser's executive vice president of global industry development, working through the Beer Institute, an industry group, has been assigned to get other brewers in line. He says the response has been "unbelievably favorable." Lachky has circulated ideas for TV ads among beer executives, retailers and other insiders. One, "Here's to Beer," shows people around the world drinking beer and toasting in different languages. "It's about connecting and the universality of beer," says Lachky. It is one of three or four concepts the industry is weighing. Beer's share of the overall U.S. alcoholic-beverage market peaked in 1995 at about 61 percent, according to industry estimates, but it fell to 58 percent by 2004. Spirits' share of the market has climbed to more than 28 percent in 2004 from just under 27 percent in 1995, while wine grew to 14 percent in 2004 from under 12 percent in 1995.