X
    Categories: Case StudiesLaura

Bud Light: What goes around finally comes around

At last
month’s beer summit it was the brew of choice for the leader of the free world, Barack Obama. It is the best-selling beer in the United States and a close
relative of the world’s best-selling beer.

Yet, the
headlines this week have been decidedly negative.

“How Bud
Light lost its sense of humor-and, subsequently, sales. Wary of 3% drop for its
biggest brand, A-B dials down ‘drinkability’” reported Advertising Age.

“Anheuser refreshes
Bud Light campaign. Taking on weaker sales, brewer seeks buzz by pouring more
humor into new round of TV ads” said The Wall Street Journal.

First of
all, was it really humor that built the Bud Light brand? No.

Second of
all, have Bud Light sales really fallen? No.

Lastly,
should Bud Light switch its strategy away from drinkability? No.

 



What is a Bud Light?

 

Bud Light is
just a watered down version of Budweiser. That is what the average consumer
thinks.

That is why line
extensions are always intrinsically cannibalistic. The best prospective customer
of Bud Light is a Budweiser drinker who wants to avoid the calories and bloat
of regular Budweiser.

By drinking
Bud Light, Joe Six-Pack gets to keep his Budweiser & Clydesdales and just loses some calories.
Same applies to Jane Six-Pack.

Since all major
beer brands used line-extensions to move into the emerging light-beer category,
the leader of the light category is obviously a line-extension.

And because
no pure light-beer brands were launched, the consumer sees light beers as a
flavor variation rather than a different brand. Much like what has happened in
cola with Diet Coke and Diet Pepsi.

Being first
is usually best, but not always. Even though Bud Light was one of the last line-extensions
launched, it has become by far the most successful. Which is exactly the same
as what happened with Diet Coke. The last of the diet-cola line extensions
became the leader.

But is the
success of Bud Light driven by its advertising? I say no. The success of Bud
Light is a direct reflection of the power and leadership of Budweiser, the world’s
best-selling beer brand.

The formula
is easy. Take the best-selling brand, line extend it into a hot new emerging category
with no competition except for other line extensions and voila! A winner is
born.


Let’s be
real. It was not Spuds Mackenzie that built Bud Light, it was Budweiser.

But success has
come at a great cost to Budweiser. After the 1981 launch of Bud Light, initially
both Budweiser and Bud Light grew in sales. But the party didn’t last. In 1988,
seven years later, Budweiser hit its high-water mark of 50.6 million barrels in
the U.S. Every year since, for the past 21 years in a row, Budweiser sales have
declined.

People don’t
change quickly; it took twenty years for light beer to fully catch on. In 2001,
Bud Light overtook Budweiser and since then hasn’t looked back.

Every year
since its launch, Bud Light has posted sales increases. And currently Bud Light
is coming close to being twice as big as its namesake. In 2008, Budweiser sold
23.5 million barrels and Bud Light sold 44.6 million barrels.

 

 

Bud Light is still King.

Bud Light
has been on fire since its launch. The decline of Budweiser has been overshadowed
by the raging success of Bud Light.

In 2008, Bud
Light sold 44.6 million barrels up from 42.7 million barrels in 2007, a gain of
4.4 percent.

What the recent
articles citing Bud Light’s so-called decline fail to mention is the raging
success of Bud Light’s own line-extension brand, Bud Light Lime.

Bud Light
Lime has been growing rapidly. In 2008, it sold 3.3 million barrels. If you add
the 3.3 million to the 44.6 million accounted for by Bud Light you get 47.9
million. So the two brands together would have grown 12.2 percent last year, an
astounding rate.

Given that
Bud Light Lime has been a blockbuster, it’s no wonder that Bud Light went down
in 2009.

After all,
who is the best prospective customer for Bud Light Lime? A Bud Light drinker
that wants a twist of lime for a change.

That’s the
classic pattern of a successful line extension. The line extension kills the
base brand.

So perhaps
we are seeing the same thing with Bud Light and Bud Light Lime.

What all this
proves is that Bud Light (with all its variations counted) is still the King of
Beers and far ahead of the other beer brands.

 

But it also
proves that line-extension is dangerous and hurts the base brand. What Bud
Light did to Budweiser, Bud Light Lime is doing to Bud Light. What goes around
finally comes around.

(And Select is doing nothing to nobody since nobody is drinking it. )

 

Dumping Drinkability is Dumb.

With “drinkability,”
Bud Light finally found a word to own in the mind.

“Drinkability”
is not exciting or funny or creative but it is a powerful strategy.

Drinkability
communicated the brand’s core benefit. It connects the Budweiser brand with the
drinkability of a light beer.

Why do
people choose Bud Light anyway? Because it is funny? No.

Just ask Obama why he choose it. Obama picked Bud Light because it
is a light beer and the leading brand.

Powerful
strategies are usually not very exciting. Driving for BMW. Reliability for
Toyota. Cowboys for Marlboro.

What makes a
strategy powerful is a narrow focus over an extended period of time.

A-B InBev has
claimed it’s not dropping drinkability altogether, they say they are just dialing
down the word drinkability. CEO Dave Peacock says they “going back to that
familiar Bud Light voice and that the work will reference drinkability, but it
won’t be as drinkability heavy.”

Sounds
pretty watered down and weak to me.

Laura Ries :

View Comments (14)

  • Who drinks Bud Light? I live in a neighborhood of New York where the bars fill with firemen and police officers. They drink Bud Light. It's not because of drinkability or humor, it's because it's a cheap high and it's not "girlie". Guys and women who want to look chiseled don't want calories. That's why the President chose it. It's a working man's drink. It's the ball game drink. It's America.
    We seem to have forgotten Amstel and Tab here.
    People who drink Bud Light don't drink beer for the taste. It has none. They want to get bombed. Bud Light has pukability.

  • Exactly, drinkability means you can drink them down quickly and easily without too many calories and still get drunk.
    Budweiser means it is all-American. Budweiser is the leading beer in the U.S. and now around the world.
    Budweiser got to be the leader by being the first national beer brand.
    Bud Light has now replaced Budweiser in U.S. sales because thin is in. Today it is about getting drunk but staying skinny.
    It's the beer to have when you are having 20!

  • Yes, you are right on Tab.
    Tab was a diet only cola. But it was basically killed by Coca-Cola when it introduced Diet Coke with aspartame and kept the saccharin in Tab. Tab also didn't have universal appeal since it was very female oriented and had a realtively weak name. (Tab stood for the alternative beverage)
    Amstel is a different story. Initially only the Amstel Light brand was imported into the U.S. but it is a beer brand extended into everything as well. From Amstel Lager, to Amstel 1870 (the dark beer), to Amstel Light, to Amstel Free.
    The ideal would be a brand that stood for the light category without having the "light" name on the label.
    Al had several meetings with Coors in the 1970's and told them to launch Coors nationwide as a naturally light beer. Original Coors has fewer calories than Michelob Light.
    Instead Coors followed the line-extension route.
    Our opinion is that if Coors focused on one beer brand. And focused on owning the light category it could have been the leading beer in the U.S.

  • In addition to hearing what their marketing people say, we have to take a close look at their actions. The word drinkability is a 5 syllable word that takes the bitterness out of beer to make it easier to drink. That followed by the more modern image, logo and italics lettering, makes it feel like you can take a 6 pack with you to the gym, coupled by their lime brand with gold and soft green colors, indicates that they are going through a slow rebrand of sorts. It may be signaling an effort on their part to soften their brand to fit in with today’s Metro Male and Female trends. In that respect the word drinkability may have been used transitionally, to get them from the rough and tough Joe 6 pack to the softer image they are now seeking. Reasons for ending the campaign may be 1) Drinkability negatively reflects on beer in general, implying that ordinarily, beer is undrinkable- something the king of beers would not want to message forever. 2) There is something disingenuous about supposedly being the only drinkable beer. 3) “Drinkability” as a slogan is somewhat goofy.
    Obama’s drinking Bud Light at the “beer summit” was a godsend and probably pushed them way ahead of where they thought they would be in terms of the rebrand. Now that they rounded the corner, they are easing off the drinkability word and pushing ahead with the feminization if you will, of the brand. Consider this from the Wall Street Journal (Aug 11) “One of the new spots, which are currently in development, features a soft-spoken woman in a bar who is trying to get the attention of a distracted bartender. She is ignored until she does something funny. Mr. Peacock confirmed that such an ad is planned.” Humor may just be the conduit for furthering this newer brand image

  • Didn't DRINKABILITY first appear on the Budweiser label anyway? Going back to the Budweiser creed, which we all remembered as part of our Fraternity Rush week...Budweiser has a 'taste, a smoothness and a drinkability you will find in no other beer at any price.'
    Funny how everyone thinks Bud Light just made that word up.

  • Thank you for your post Laura. Most importantly (at least to me) is the fact that your post asks us to focus on one word. To - DIFFERENTIATE - the product. I don't know that 'drinkability' should be the word du jour for Bud Light but if it remains I bet it won't be long before some ad agency comes up with the phrase "Let the good times flow" as a theme to parlay drinkability into a larger advertising concept. Loved reading your thoughts.

  • Sorry for my question (I live in Europe :)). I do not uderstantand, Bud Light, is it some kind of nonalcoholic beer? If not, what it is about?

  • Hey Laura, love your posts congrats.
    Why don't you write a post about Nokia entering on the PC category or the new campaign for Sony, make.believe.
    cheers