It ain't my fault!! I'm doing my part in the consumption of beer!

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Less Thrilling

Beer Is Losing Its Fizz Among the Drinking Set

By Margaret Webb Pressler
Washington Post Staff Writer
Sunday, October 9, 2005; F05


When a huge consumer products company starts slipping in sales or
market share, even just a little bit, it can be a sign of a much bigger
problem. And that explains why beer executives are on the offensive
these days.

Though beer is still the most-quaffed alcoholic beverage in the country
by far, it is slowly losing its grip around the marketplace edges:
among new drinkers, among aging baby boomers and among other Americans
whose tastes are gradually becoming more sophisticated. More and more,
when people kick back with friends and enjoy a drink, they're not
choosing beer.

>From 1998 through last year, beer's share of all alcohol servings
slipped from 59.6 percent to 58.1 percent, according to Adams Beverage
Group, a market research company. By contrast, consumption of spirits
and wine has been inching up for several years, reaching 28.5 percent
and 13.4 percent respectively last year.

The beer industry is madly trying to figure out how to reverse this
trend, which industry insiders insist is cyclical but which some
analysts warn could represent a more long-term change in who drinks
what and when.

"Demographic trends are working against the brewers," said Bonnie
Herzog, a beverage industry analyst for Citigroup.

Younger consumers raised on an ever-growing array of soda flavors and
juice drinks, Herzog and others say, are finding the transition into
alcohol a little easier with mixed drinks, which can be sweeter than
beer and personalized to one's own taste. Baby boomers, meanwhile, are
gradually transitioning from beer to wine and cocktails. And across the
board, beer is suffering from a bit of an image problem.

The core consumer of a cold brew is widely thought to be either the
football-loving couch potato or anyone with a household income below
$45,000 a year. But in today's Internet-savvy, consumer-driven culture,
those are not exactly the beacons of a populace that increasingly buys
well-designed home products at Target and flips longingly through the
Pottery Barn catalogue.

"The industry was very complacent in the last couple of years," said
Robert C. Lachky, executive vice president of global industry
development for Anheuser-Busch Inc. "Frankly, the back door was left
open."

But brewers say they get it now. They say they're on it, even though
the industry continued to dip through the first half of this year,
according to researchers who follow beer sales. Indeed, there is a lot
going on: Companies are investing heavily in new product development,
new packaging and new marketing -- all aimed at getting people to turn
to beer for more "drinking occasions."

At the core, what many industry executives say they really need to do
right now is make beer cool again.
Changing Habits

This problem crept up on the beer industry when it wasn't looking. Beer
had been so strong for so many years, while wine and spirits wallowed
in the doldrums, that it was easy for companies to forget that beer
drinkers were not necessarily forever.

"If you told me 15 or 20 years ago that spirits would be growing in the
2 to 3 percent range and beer would be declining, I would've laughed,"
said John Michalik, North American director for the London-based
beverage consulting firm Canadean Ltd.

The result was that after decades of success selling a cold one to the
baby boomers, the big brewers hardly noticed 10 years ago when boomers'
tastes started to change as they approached 50.

"There was a general assumption -- that is proving somewhat erroneous
-- that the baby boomers would continue with the consumption patterns
that they established in their youth," said Benj Steinman, editor of
Beer Marketer's Insights, an industry trade publication. "Instead,
they're doing more like what prior generations did as they got older,
and switching their drinking habits to wine and spirits."

Older drinkers have always favored hard liquor and wine, primarily
because it's less filling -- simply less liquid -- for the same effect,
Steinman said. Helping the wine industry, too, has been a run of press
supporting the positive health effects of red wine and moderate alcohol
consumption in general.

In and of itself, this trend would not be especially troublesome for
beer, but it has happened at the same time that beer has lost its edge
among younger drinkers as well.

The beer companies had always counted on the "echo boom" -- the
children of the baby boom -- to provide the next wave of 21- to
27-year-oldbuyers. But these young adults turned out to have a much
different view of themselves and their choices, from the particular
coffee drinks they prefer at Starbucks to the bottled water they tote
around to the alcoholic beverages they start ordering. Increasingly,
these younger drinkers have been turning to a variety of cocktails --
appletini, anyone? -- drinks that say more about who they are than does
a simple bottle of beer.

"Young adults are a generation of people who can alter pretty much
everything, or at least customize everything to their lifestyle. And
beer is beer," said Neal Stewart, marketing director for the Pabst
Brewing Co., the nation's fourth-biggest beer producer. "There's
different flavors and brands, but with a mixed drink you can customize
that a million different ways."

The liquor industry has capitalized on this trend by aggressively
marketing to younger drinkers with ads that tout the cool and sexy
aspects of a mixed drink. They've pushed especially hard to market to
consumers in bars and restaurants as well, while the beer industry took
that vital avenue of business development for granted.
It's the Weather

A convergence of cultural and economic forces have also conspired to
depress beer sales. After hovering at around 1 percent growth, or a
little less, for several years, U.S. shipments of beer dropped 0.5
percent in 2003, rose slightly in 2004, but fell 1.2 percent in the
first six months of this year, according to Beer Marketer's Insights.

Beer industry executives say sales have been hurt by a decline in
disposable income among lower-income consumers, especially since the
rise in gasoline prices and decline in blue-collar employment, long a
target market.

"If you look at our key demographic of 21- to 34-year-olds, there are
more kids going to college, they have college debt, more young people
have credit cards, there are higher gas prices," said Jeff Becker,
president of the Beer Institute, an industry trade group. "That beer at
the end of the day has become a luxury."

Becker even pulled out a classic excuse from the retail industry: the
weather. "We've had some of the wettest weather at key times for us
that we've seen in the past decade," he said. "When it's too hot or too
cold or rainy, it does affect people's beer consumption."

(On the other hand, Steinman said beer suppliers in Houston were
reporting the best sales ever just before the arrival of Hurricane
Rita.)

Along with lack of growth in real incomes, lost manufacturing jobs and
rising household expenses, beer companies are feeling the effect of
consumers "trading up."

Across many consumer product industries, manufacturers are finding that
people want better things: richer coffee, tastier food, bigger houses,
silkier sheets, extra amenities in cars, higher design in their home
furnishings and more luxurious bathrooms. Manufacturers and designers
are scrambling to bring what's often called "a higher taste profile" to
the masses. Kmart linked up with Martha Stewart. Target promotes
designers Michael Graves, Isaac Mizrahi and Todd Oldham, among others.
Design catalogues stream through people's mailboxes, and home
remodeling shows proliferate on cable.

That is playing out in the beer industry, too, experts say.

"If you look at what's growing in the beer industry, it's import and
craft beers. They're higher priced and perceived as luxury products,"
said Harry Schuhmacher, publisher of Beer Business Daily, an industry
newsletter. "And so if you look at the whole alcohol category, people
perceive wine and spirits as high-end, so there's some trading up
between beer and wine and spirits."

One of the ways the beer industry has tried to counteract the slide in
sales is by cutting prices. After regularly increasing the price of a
six-pack through much of the 1990s, in the past two years the price of
mass-market beer has been sliding. Just last month, Anheuser-Busch
announced it would again forgo the traditional autumn price hike for
its beer.

Industry observers worry that such an approach only makes the brewers'
problems worse in the long run.

"If you fight on price, it's not necessarily helping the brand image of
beer," said analyst Herzog. "It could be hurting the brand equity."

Beyond pricing, though, the nation's two biggest brewers have taken
markedly different approaches to tackling the industry's woes. For
Anheuser-Busch, the defense is built largely around new products --
innovative malt-based beverages that company executives believe will
increase the number of occasions that people drink beer or any other
Anheuser-Busch product. At SABMiller PLC, the focus is on marketing to
improve the image of beer, thereby making it a more acceptable choice
for more consumers in a wider variety of settings.
Miller Takes a Chance

It has been hard to miss the new ad campaign from Miller on television
these days. The company has chosen high-profile shows to run its new
campaign for subpremium Miller High Life beer, including a debut on the
season premieres of "Survivor: Guatemala" and "The Apprentice."

The commercial is a highly evocative series of historic and
sophisticated images that tout the American heritage of Miller and the
good times and good feelings that are so, well, American
(notwithstanding the fact that Miller is now owned by a British
conglomerate).

In its softness and approach, the ad is clearly aimed at a more
educated and more female audience than the traditional sports-centered
beer commercials so familiar to viewers.

Not only are versions of Miller's new commercial airing at an
unheard-of length of 90 seconds, they have even popped up on morning
cable news programming. That's gotten the company a lot of buzz in the
industry.

"You don't play beer ads in the morning and you don't play beer ads on
the news, so they're going against all kinds of conventions," said
newsletter publisher Shumaker. "When you do things against convention,
you own it. It puts your thinking on edge."

Miller executives believe that they marketed their way into this corner
and they can market their way out of it. Tom Long, the chief marketing
officer for Miller, offers as proof the fact that some beers in the
industry are doing well -- such as imports and craft beers -- while
others are not. Those that are selling well, he said, have a story, an
image, a resonance with consumers.

"It really comes down, just like it does in any other business, to
differentiating the brands and giving them distinct personalities," he
said. It's also important to focus on where brands came from and how
they're made "so they have the personal authenticity that people are
searching for now," Long said.

What's not working for the industry now is the typical
young-stupid-male advertising approach, Long said. There is still a
core market for beer that resides with young men, but even those young
men may see themselves differently from the way they used to. The
industry needs a different definition, he says.

"The problem in American beer is sameness -- one big mass of
couch-potato jokes thrown at American males in a way that was okay 10
years ago," Long said. Now, though, "adoption leaders and style leaders
aren't seeing themselves in that imagery."
Just Add Ginseng

Long's constant harping about football and couch-potato messages is
aimed squarely not only at his own company, but at his main competitor,
Anheuser-Busch. As the beer behemoth, with greater than 50 percent
market share, Anheuser is a powerful force.

The only problem, analysts say, is the industry leader hasn't really
been leading much lately, except with price cuts.

"It does sound like they don't even have an understanding of the
marketplace," Herzog said. "How did they even allow this to happen?"

Lachky of Anheuser is open to taking some blame. "I don't think beer
companies have done a very good job in the last five years of
protecting the on-premise environment -- the restaurants, the bars, the
taverns," he said. "That's where the hard liquor people have come in
with a very aggressive form of marketing."

Yet Lachky's salvo isn't to fight marketing with marketing -- it's
innovation. The problem, he says, is that people don't think of beer as
appropriate for as many occasions as they could, so Anheuser is going
to give them the products that do seem appropriate.

The company has unveiled a dizzying array of new brands and new
packaging in the past two years, most recently a product called Tilt,
which is a beer that contains ginseng and caffeine. It has made large,
eye-catching aluminum bottles and partnered with Bacardi to make
Bacardi Silver, a malt-based beverage that is sort of a hip alternative
to a wine cooler.

"They're transitioning from being Budweiser to being a malt-based
alcohol producer," said Schuhmacher of Beer Business Daily. "They have
tremendous capabilities, tremendous manufacturing capabilities that
people may not realize."

They'll realize it soon, as there are lots more products coming from
Anheuser-Busch. You'll see products with flavors and colors that add
individuality to bottled drinks and flexibility to draft beer in bar
settings. Feel like a spicy mango beer? It's being tested right now.

"They're beertails or beertinis -- fun drinks that are meant to
excite," Lachky said. On its Web site, Anheuser-Busch also offers
recipes for mixed drinks that use beer as a base.

Next spring the company is introducing Bistro8, a malt-based beverage
that Lachky says "acts" like a wine, with a complex flavor, a little
carbonation and a light finish. "It's perfect for food," he said. It
has done well in testing in Florida and South Carolina, especially
among women.

Of course, none of these products is going to lift Budweiser to greater
heights, but over time they will hopefully push consumers back into the
beer fold, Lachky said, and encourage people to be more accepting of
beer. Anheuser-Busch isn't trying to replicate Bud Light's volume but
to "fill white space," he said -- get to all those moments when people
could drink a beer but are instead reaching for something else.

"You're basically asking consumers to experience malt-based beverages
other than in a 16-ounce glass," Lachky said.

Of course, executives and industry observers predict no overnight
miracles. Depending on whom you ask, the industry's slump is either
part of a cycle that will take time to run its course or a structural
change that will take concerted effort to reverse, if that's even
possible.

Insiders like the Beer Institute's Becker point out that beer sales
have ticked up in the past month or so, a fact he attributes to beer
companies "working it a lot harder." But these are big issues, no
matter what their genesis, say longtime observers.

"It took a while to get into it," Steinman said. "It's going to take a
while to get out of it."
© 2005 The Washington Post Company

http://www.washingtonpost.com/wp-dyn...800172_pf.html

>>Miller executives believe that they marketed their way into this corner
>>and they can market their way out of it. Tom Long, the chief marketing
>>officer for Miller, offers as proof the fact that some beers in the
>>industry are doing well -- such as imports and craft beers -- while
>>others are not. Those that are selling well, he said, have a story, an
>>image, a resonance with consumers.

In the words of Yoda: "this, is why you fail" ...

Taste anyone? Taste?

_Randal

>>>among new drinkers, among aging baby boomers and among other Americans
>>>whose tastes are gradually becoming more sophisticated. More and
>>>more,when people kick back with friends and enjoy a drink, they're not
>>>choosing beer.


They're not choosing tasteless swill? Great!


But as the article said:
"If you look at what's growing in the beer industry, it's import and craft
beers. They're higher priced and perceived as luxury products,"

This is nothing but good news.

Douglas W. Hoyt a écrit :

>But as the article said:
> "If you look at what's growing in the beer industry, it's import and craft
>beers. They're higher priced and perceived as luxury products,"
>
>This is nothing but good news.
>
Hear hear... over here in Switzerland, we have a brewer's association
that's whining every year tat beer consumption is dropping, when in fact
it's shifting : less and less drinkers are happy with mass-market lager,
and the speciality / import / local micros markets are on the increase.
But since consumers are replacing a litre or two of swill through one
33cl bloottelof something decent, indeed, volumes are dropping.
The same pattern can be observed in countries such as the Netherlands,
Austria, France...

--
Warning : you may encounter French language beyond this point.

Non, ...là tu as écrit "chuis complètement stone !" C'est spidé qu'il fallait mettre !! hé !
(F'murrr)

Laurent Mousson, Berne, Switzerland