AMERICA’S BIGGEST BEER companies want more millennials to buy their products, but they don’t want to be, like, obvi about it.
Anheuser-Busch InBev and MillerCoors — the makers of America’s favorites, Bud Light and Coors Light — have watched their popularity slowly erode over the last decade. Their plans to stem the tide include marketing to a generation notoriously resistant to efforts at being won over.
Beer has lost 10 percentage points of US alcohol market share over the last decade to wine and hard liquor. To claw it back, the companies are buying up craft brewers and launching new lines of alcoholic sodas in an effort to appear cooler to the roughly 115 million Americans born from 1980 to 2000.
The strategy comes at a time when six out of 10 drinkers say a brewer’s independence is important when choosing a craft beer and increasing numbers of Americans are rejecting sugary drinks.
“I know that they’re panicking about that loss of market share,” said John Verive, founder of the Beer of Tomorrow blog in Los Angeles. “So they’re going after whatever fragment of a market they can. They’re just going in every different direction.”
To be fair, selling to that age cohort has proved confounding for a lot of industries. But for many brands it’s also necessary. Millennials’ buying power “will heavily influence most food trends in the coming years” and will rise to 29% of US spending in 2020 from 17% last year, according to Bloomberg Intelligence analysts Diana Rosero-Pena and Kenneth Shea, citing data from Information Resources Inc.
According to a Boston Consulting Group report titled “How Millennials Are Changing the Face of Marketing Forever,” they don’t respond to the same tactics that separated their parents and grandparents from their money. They desire “personality” in their products. They have less trust in “experts.” Marketing and product releases can’t look, feel, or smell like they have in the past.
Craft beer settles neatly into this niche. Brewed in small batches in brick warehouses by local artisans who can tell compelling company-origin stories, craft brews have seen their share of US beer sales rise steadily in the 2010s. In 2014, it was 19%, compared with 16% the year before, according to the Brewers Association. And though AB InBev and MillerCoors account for 72% of US beer sales between them, they’ve decided if they can’t beat ’em back, they might as well buy ’em.
AB InBev kicked off the recent wave of acquisitions with the 2011 purchase of Chicago-based Goose Island Beer Co. In the last two years, the Belgium-based maker of Budweiser has bought six more American craft breweries, including two in December.
The acquisitions mean craft beer is distributed by the big companies and is more widely available, said Brandon Pettit, a chef who owns the Delancey restaurant and the Essex bar in Seattle. It also means that millennials may shun even beers they like because of corporate taint. Mr. Pettit said he was about to offer Ballast Point IPA on his menu, but “then they were sold, so I decided not to do it.”
The marriage between craft and corporate beer can also get awkward. Seattle-based Elysian Brewing Co., which AB InBev bought last year, bottles Loser Pale Ale with the tagline “Corporate Beer Still Sucks” on every label.
Last year, MillerCoors bought San Diego-based Saint Archer Brewing Co., whose home page features a black-and-white Vimeo about Andrew Jones, a bearded, tattooed drummer for the band Hy Brasil. It shows Mr. Jones skateboarding, surfing, and playing the drums, shirtless. His connection to the brewery comes 4 1/2 minutes into the tastefully produced video and lasts five seconds. It shows Mr. Jones at a bar being served a beer while he’s wearing a Saint Archer T-shirt.
“Millennials are the most marketed-to generation ever, and they know it,” said Scott Whitley, who runs Tenth and Blake, MillerCoors’s craft and import division. “Authenticity and heritage, being genuine, is very important to millennials. You don’t force anything on them. You let them come to you.”
Jorn Socquet, Anheuser-Busch’s vice-president of marketing, is testing that idea. He said he plans to book little or no TV advertising for the company’s new Best Damn Root Beer, alcohol content 5.5%. Instead, he said AB InBev is doing memorable “stunts” like turning a Detroit billboard into a bar or putting a couch behind first base at a baseball game for “the best damn seats” in the ballpark.
“There’s a bunch of stuff that we want to do that people will say, hey that’s cool,” Mr. Socquet said. “If you look at millennial brands that today are at the top of their preferred list, most of the time the advertising budget of those brands is zero.”
The beer companies are famous for their TV commercials — the newest will be showcased during the Feb. 7 Super Bowl, when many viewers tune in just to see the ads. Hard soda won’t have the kind of exposure that a puppy chasing Clydesdales or a Silver Bullet train slicing through ice can provide. Plus, soft- drink sales have fallen for 10 straight years, according to Beverage Digest, and a Gallup poll last year found that more than 60% of Americans said they were actively trying to avoid drinking soda.
MillerCoors is betting against the soda-pop trend, too. This month, the Chicago-based brewer launched Henry’s Hard Sodas in flavors including orange and ginger ale.
Pressure is mounting for the new products to succeed. Mainstream beer brands — Coors Light, Miller Lite, Budweiser, and Bud Light — lost 10.6 million barrels of volume between 2010 and 2014, according to data from Susquehanna International Group.
To make serious inroads, Big Beer will have to overcome the perception in the craft-beer world that small is beautiful.
“When you think about craft, you think about the people making these beers, and then when you think of AB InBev you think of a big stainless steel, cold, humanless factory,” said Jackie Dodd, an award-winning blogger who posts as The Beeroness. “That might be one of the things people are worried about — don’t take the soul out of my beer.” — Bloomberg