Tuesday, August 4, 2009

ABIB small brands not doing so well; actually, they suck

The St. Louis Post-Dispatch is reporting on "a fascinating item" in trade pub Beer Marketer's Insights about A-B's smaller brands. Budweiser, of course, continues on a 20 year slide, and Bud Light is just about flat, but Bud Light Lime is still sizzling: the brand posted 30 million cases in sales in only 8 months last year, the best launch since Michelob Ultra, and is blazing strong this year, with 36% growth. The company's budget beers, Busch and Natty Light, are doing very well in the shitty economic times.

It's the much smaller brands that are hurting (and ABIB has a LOT of them: "A-B sells about 70 brands that collectively make up less than 1 percent of its total volume, Insights reported."). Some have been cut already, and others are headed to the block (could this finally be the end of Bud Dry, which clings to life in some isolated regional markets?). Here are the numbers from Information Resources Inc.:
Landshark Lager volumes are down 23 percent for the 13 weeks through July 12; Bud Chelada is down 27 percent, and Bud Light Chelada is down 12 percent. And Tilt brands, [now] without caffeine, are suffering serious declines of between 30 percent and 50 percent. Bacardi Silver Mojito is down 30 percent. Michelob Ultra still about even, but Michelob Ultra Amber is down 25 percent. Bass is down 24 percent, Beck's is down 7 percent and Rolling Rock is down 8.5 percent for 13 weeks. Michelob is down 36 percent, Michelob Light is down 28.5 percent and Michelob Amber Bock is down 25 percent for 13 weeks. Bud Select is down 14 percent for 13 weeks.
Bud Select's down? How can they tell? Stella was up 14%, BTW, and the much-despised (by the entire geekerie) Shocktop more than doubled over last year (seriously, Shocktop is the whipping boy for "faux craft" hate).

Wow. There's a lot of room for cutting losses and changing focus. Time to fish or cut bait on this stuff, and stop clogging the distribution channels and fogging the message. You can bet that the Brazilians are going to take a machete to this brand jungle.

Didn't hear anything about Budweiser American Ale, though the numbers I saw for last year were not bad. Let's end on the strangest note of all, though: Bud Ice is up 34 percent. What?

12 comments:

jp said...

I hope *ickmann gets a good whiff of those rolling rock numbers.If he thinks he is going to increase sales by pulling IC and IC light out of Larryville

Bill said...

To be clear, some of the brands you mentioned aren't among the 70 that combined together make up <1% of ABIB's volume, right? Unless, I guess, they're talking worldwide? It looks like the trade pub tracked sales for ALL the products, not just the lame ones on the bottom. I'd be surprised if regular Michelob or Bud Select were each far less than 1% of total US Sales for ABIB.

Lew Bryson said...

Sure, Bill, although the volume on Michelob might surprise you. Bud Select is quite a bit less than Bud Light Lime; last number I saw had it at 20 million cases last year (and dropping fast), a blip on the AB-scope.

Anonymous said...

How are Bud Porter, Bud Stout, Bud Stock ale and Bud cream ale doing?

Bill said...

...and me still having never tried Bud Select... still, 20 million cases is how many barrels? 1.4 barrels, roughly? I'm guessing it sells more than all but two or three craft bottlings? Boston Lager, SNPA, maybe Sam Adams Light? Talk about scale...

sam k said...

Another six months or a year, and Rolling Rock should be available for half what A-B paid for it a while back...affordable enough to return home, perhaps?

Jeffrey said...

Not too surprised, since AB used to come up with a brand just to compete with a regional brew, like Ziegenbock competes against Shiner Bock in Texas. I wonder, though, if Bass is really on the chopping block?

The New Albanian said...

I genuinely don't know the answer to this, but do the sales figures tell the whole story? After all, A-B uses these brands to clog store shelves and crowd other beers out. Is this strategy effective even if the bottles draw nothing but dust and get pulled after the date expires?

Anonymous said...

Funny that someone mentioned Bass. I was at the A-B Sales & Marketing meeting last fall when they announced a incentive to maintain Bass draught distribution. For those unfamiliar with beer distribution no brewery offers incentives for maintaining distribution unless a brand is getting absolutely clobbered.

Lew Bryson said...

I've been thinking the exact same thing, Sam; for half what A-B paid for it to InBev. I remember Quaker Oats took a whupping like that on Snapple, and now Snapple is kicking ass. Some companies just can't run a brand.

I doubt Bass is on the chopping block...but remember, it's not really their brand, just another one they bought. No emotional attachment (not that the Brazilians have many of those). Still...Bass isn't bad, there's just not a compelling reason to order it. Too many similar or better choices. Hard to play on tradition and heritage when it's just something you bought on a fire sale.

TNA/Roger, the strategy only works to a degree; it costs money to keep a brand alive. Of course, ABIB did 'extend' the best-by dates on a number of smaller brands a few months ago. I've just never been a big believer in the "clog the shelves" theory. It's of questionable value, and you do yourself real damage in terms of prestige by having brands that don't sell.

Steven said...

"Bud Ice is up 34 percent. What?"

Low economic times, fast buzz. Just my guess. Like Malt Liquor days of old.

The New Albanian said...

Thanks, Lew. I have no experience approaching the issue from the macro level, but always try to assume the worst.