Part of the problem with measuring ABI’s ability to build a long term brand is that its network and marketing apparatus make it easy for it to have short term success. The company has an incredible ability to flood the market with its new offerings, but their staying power, particularly in terms of being able to stand on their own once the marketing spigot is dialed back, remains questionable.
Bud Light Platinum, for example, moved well over a million barrels in 2012, becoming the 14th largest beer brand in the U.S., according to Chicago-based research group Symphony IRI. But the company has had big short-term hits before: Bud Dry, Bud Select, Michelob Amber Bock all debuted with a bang and showed impressive growth over a two-to-three year period before fizzling out. They haven’t become the warhorses that can carry ABI forward, and that calls into question the longevity of any brands that the company touts as capable of shouldering the load for declining share.
“Our philosophy has to be long term and there needs to be consistent investment in what we are putting out,” McGauley said. “We are no longer one-and-done. Obviously we need to continue building long-term brands.”
But it’s hard to do that when the innovation strategy for ABI remains propping up the big brands. ABI initially introduced Platinum, in part, to help combat volume declines to the country’s number one selling beer, Bud Light. Trade publicationBeer Marketer’s Insights (BMI) estimates that between 2009 and 2011, the Bud Light brand lost 1,450,000 barrels.
In 2012, ABI rallied its distributor partners around Bud Light Platinum and helped bolster an aggressive nationwide rollout with a set of Super Bowl commercials grounded in music. The 30-second ad spots featured popular tracks from internationally recognized hip-hop artist Kanye West and electronic music producer Avicii. At the same time, the commercials presented Bud Light Platinum as a trade-up offering that consumers should spend more money on.
This year, it doubled down on its musical marketing approach. In early February, the company announced that it would engage actor and singer-songwriter Justin Timberlake as its new creative director for Platinum, hoping his celebrity and creative vision can continue growing sales for the brand in 2013. Also helping out is the malternative Bud Light Lime-A-Rita, an 8 percent ABV offering launched last April. According to SIG, that product is now a top-three brand in its category, with sales of more than $161 million since its introduction less than a year ago.
So after managing — at least temporarily — to shore things up on the Bud Light end, the company is now looking to offset sluggish Budweiser shipments with the introduction of another on-trend offering, Budweiser Black Crown. In this case, it’s an attempt to battle the estimated 7 million barrel drop — about 30 percent of the brand’s sales — that have hit Bud since 2007, according to BMI.