Are Budweiser and Miller Getting Desperate as Micro Brews Explode?

In case you haven’t noticed, micro-brew beers are one of the hottest trends in the beverage space. Supermarket shelves have quickly transformed to offer what was once available at only specialty beer shops.

The losers? The Coke (KO) and Pepsi (PEP) of beer: Budweiser and Miller.

Sales of Budweiser and Miller branded beer are so poor, Budweiser just announced a new marketing plan to give away free beer. Unfortunately, Budweiser misses the point because consumers have gravitated to micro brews for a wider variety of flavors and higher alcohol content. Budweiser, of course, is nearly tasteless and requires more cans to get the same buzz.

Budweiser Loyalty

Source: USA Today

The truth is in Budweiser’s numbers:

-9% = Drop in Bud unit sales last year and again this year (Beverage Marketing Corp.).

King to Pauper of Beers = Loyalty to Bud has been in a solid downtrend for seven years, as National Product Brand Loyalty slipped from 16th in 2003 to 220th in 2010 (Brand Keys).

Compare these numbers with a stock chart for the most mainstream micro-brewer The Boston Beer Company (SAM) — home of Sam Adams:

sam adams boston brewery

IMHO, Anheuser-Busch Inbev (BUD) would do much better pitting Budweiser against the comparable Pabst Blue Ribbon. Then, they should save all the extra marketing loot for buying more of the best micro-brews for their portfolio. There’s no need to fight a trend when you are one of the richest companies in the world … just buy the trend.

But that may be too “nimble” an idea for a titanic corporation. Instead, I will expect BUD to follow Miller into the marketing gimmick Vortex — that’s what companies do when they are desperate to hang on to old products and old ways.