By Saabira Chaudhuri
A fight between America's two biggest brewers is jeopardizing a
proposed "Got Milk?"-style campaign intended to help struggling
beer makers win back drinkers who have defected to wine and
spirits.
Anheuser-Busch InBev SA, Molson Coors Brewing Co., Heineken NV
and Constellation Brands Inc. have for over a year discussed a
potential multimillion-dollar, brand-agnostic campaign aimed at
improving the overall health of the beer category.
But the campaign could now be dead in the water after
MillerCoors, Molson's U.S. unit, pulled out of a meeting slated for
next month and said the initiative should be paused following a
public spat with Bud Light maker AB InBev.
The rift began when AB InBev ran three Super Bowl TV ads earlier
this month highlighting MillerCoors's use of corn syrup in Coors
Light and Miller Lite. MillerCoors responded on Twitter and with a
full-page newspaper advertisement addressed to "Beer Drinkers of
America" defending its use of corn syrup as a part of the brewing
process.
High-fructose corn syrup, used as a sweetener, has attracted
negative attention for its role in the national obesity epidemic.
MillerCoors notes that it uses corn syrup, not high-fructose corn
syrup, only in the fermentation process for beer making, as does AB
InBev for some other brands. MillerCoors says the corn syrup
doesn't actually make its way into the beer.
Pete Marino, MillerCoors's communications chief, called it a
"waste of time and money" to work on the campaign "while the
dominant industry leader is spending millions of dollars demonizing
beer ingredients."
Beer has been losing market share for two decades, prompting
brewers, after years of infighting, to recently agree to a rare
rapprochement. Beer's share of the U.S. alcohol market by sales
dropped to 45.5% last year, down from 56% in 1999, according to the
Distilled Spirits Council. Spirits, by contrast, had a share of
37.3%, up from 28.2%. Wine's share was 17.2%, up from 15.8%.
Alcohol makers of all stripes are also struggling with a propensity
among younger drinkers to drink less.
Mr. Marino said AB InBev's ads could hurt beer overall because
many brewers use corn syrup to brew. "ABI's misguided attempt to
gain a competitive advantage threatens to single-handedly set back
the health of our category for a long time," he said.
AB InBev says highlighting how Bud Light eschews, and Miller
Lite and Coors Light use, corn syrup was about transparency and
shouldn't hurt collaboration. "It's a fact and one we thought
consumers should know as they decide which beer to drink," a
spokeswoman said.
Mainstream lager brands like Bud Light, Miller Lite and Coors
Light have suffered the most as consumers defect to craft beer and
other tipples, prompting especially fierce competition among their
owners. MillerCoors, for instance, has for years run ads saying
Miller Lite has more taste than Bud Light.
Bud Light and Miller Lite volumes are down more than 25% over
the past decade, while Coors Light is down 13%, according to data
from Beer Marketer's Insights, a trade publication.
Beer has performed better in Europe, where brewers say
industrywide campaigns including the U.K.'s "There's a Beer for
That" have helped sales. But executives say the U.S., where the top
four brewers dominate 75% of the market, makes collaboration
harder.
"The tone of competition was as unfriendly as I've seen during
the Super Bowl campaign," said Heineken Chief Executive
Jean-François van Boxmeer. "No wonder the beer category isn't going
to elevate itself."
Early last year, top executives from AB InBev, MillerCoors,
Constellation and Heineken huddled together for five hours at the
Westin hotel in Crystal City, Va., to discuss beer's troubles and
concoct a way to jump-start growth.
A presentation showed photos of a glamorous woman drinking a
glass of wine, Pierce Brosnan (as James Bond) drinking a martini
and an older man in a vest drinking a beer while smoking in his
kitchen. "Beer should be thriving but instead we are losing," it
read.
The presentation acknowledged billions of dollars of lost
revenue, how other drinks are perceived as more sophisticated, and
criticized disorganized grocery store shelves and the use of
generic glasses in bars for cheapening beer's image.
Ideas to boost beer included helping drinkers find the right
beer for them, positioning beer as a reward at the end of a tough
job and efforts to convince consumers that beer is social and
sophisticated.
Other possible moves include a program to educate bartenders,
highlighting beer's contribution to the U.S. economy and marketing
targeting younger drinkers, according to documents reviewed by The
Wall Street Journal and people who attended the meetings.
Over the past year, brewers, retailers and distributors have met
repeatedly to discuss how to tackle the challenges facing beer,
according to an attendee. Executives met in San Diego in September
to hear pitches from five marketing agencies. They decided to hire
one and were poised to confirm the decision at a meeting next month
at Constellation's offices in Chicago, according to a person
familiar with the effort.
MillerCoors is adamant it won't participate, raising questions
about the project's funding. A Heineken spokesman said it was too
early to comment on the project's future, while Constellation
didn't respond.
A spokesman for AB InBev said it was still committed to
"strengthening the beer segment" but also signaled it wouldn't back
down from its fight with MillerCoors, pledging to "compete
vigorously in the marketplace."
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
February 24, 2019 07:14 ET (12:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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