The Real Reason Budweiser Is Bombing
Budweiser's red and white cans are a well-known shelf staple that have been quenching the thirst of loyal customers since the 1800s. Yet with changing times come new challenges, and it looks like Budweiser, formerly America's favorite beer, is in for a hard time ahead.
The numbers are in, and believe it or not, The King of Beers is on the decline. What was once the top-selling beer in America is now no longer even in the top three of America's favorites. While older generations may have embraced Budweiser's light, golden flavor, sales show it's now dropping in popularity. It's not the only former shining star company that's seen better days, but it is probably one of the most surprising. So what's happening with Budweiser, and why is their status slipping? It's time to find out. From tough competition to ad strategies that have missed their mark, here's the real reason Budweiser sales are failing.
Blame the craft beer
Craft beer has been giving Budweiser a run for its money. With craft brewery openings on the rise -– more than 5,000 in the U.S. in 2016 compared to 2,400 in 2012 –- the competition has been increasing and the numbers show that Budweiser is taking a hit. According to CNN Money, the top 10 beer brands — including Budweiser — once ruled the beer industry with 66 percent of the market. As craft beer has grown in popularity, that number has shrunk to 50 percent. Not good for big beer.
According to CraftBeer.com, in 2016 alone craft beer saw a 6 percent increase in volume and grew to over 12 percent of the market share. Not only that but craft beer employment increased, offering 7,000 more jobs in a single year and providing around 129,000 in total. If jobs and market share continue to rise, along with consumer demand for more choices, flavor, and small independent beer, craft beer will continue to be serious competition for Budweiser.
Blame millennials
Not everything can be blamed on millennials, but according to statistics, Budweiser's fall can. Older generations may have been all about the Bud, but the current generation isn't having it. According to Business Insider, less than one-third of Budweiser is being consumed by Americans compared to their peak in 1988. This is in part because millennials aren't interested in drinking it. What are they drinking? Hard liquor and wine. Unless Budweiser can identify with the current generation, their sales could continue to slide.
People prefer light beers these days
There was once a time in America when Budweiser was the favorite beer of choice, but not anymore. Miller Lite has surpassed Budweiser, bumping it into fourth place. That may not sound like too big of a deal -– it's in the top five after all –- but this is the first time since 2008 that the King of Beers has not been in the top three.
In 2017, Budweiser sales in the U.S. dropped by 5.9 percent. In fact, Bud Light, Coors Light, and Miller Lite made up the top sellers in 2017. Maybe it's the flavor, maybe it's the image, but it looks like the people have spoken and they prefer lighter fare than full-strength Budweiser.
Anheuser-Busch bought up (delicious) smaller brands
Yes, people are choosing craft beer, but they're also choosing the craft beer brands that Budweiser's parent company, Anheuser-Busch, bought up. That may be good news for Anheuser-Busch, but it's not good for Budweiser. According to Forbes, the craft beer buyouts have been doing quite well. Take Goose Island for example. Anheuser-Busch bought Goose Island in 2011, and by 2015 sales were up 30 percent. Compared to Budweiser's drop in sales, it appears that people want to drink more than just lagers. Goose Island Bourbon County, anyone?
The ads are funny but not good for sales
Ad campaigns are meant to capture consumer attention for the purpose of persuading them to buy products. Recently, that hasn't been the case for Budweiser. If you have cable or spend any amount of time on social media, you're probably familiar with Budweiser's "Dilly Dilly" commercial. The commercial certainly has drawn a lot of attention to Budweiser. Unfortunately for Budweiser, all this attention hasn't even increased sales of Bud Light, the focus of the commercials, let alone for standard Budweiser.
Some ads get negative attention
You know an ad has gone horribly wrong if people boycott your product. That's precisely what happened with Budweiser's 2017 "Born the Hard Way" Super Bowl commercial. The pro-immigration commercial reenacts founder Adolphus Busch's journey to America. Some Trump supporters didn't like the message, calling it "liberal propaganda" and taking to social media with #BoycottBudweiser. It's hard to say whether this actually hurt sales overall or whether people who liked the commercial showed their appreciation by buying a case.
Mocking your customers isn't a great idea
Speaking of Super Bowl commercials, in 2015 Budweiser released an ad called "Brewed the Hard Way" mocking craft beer. The commercial makes several references geared at craft beer like "it's not brewed to be fussed over" and "let them sip their pumpkin peach ale." The point of the commercial appears to be reinforcing Budweiser as the beer choice for the current fan base by basically belittling any consumers that drink craft.
According to The Motley Fool, the problem with this is that in 2014 Budweiser claimed 44 percent of 21- to 27-year-olds –- there go those millennials again –- had never even tried Budweiser. Of that same age group, 15 percent spend their money on craft beer. Rather than try and win over a bunch of people who've literally never even tried Budweiser and who prefer to spend their money on craft-style products, Budweiser went and aired a commercial mocking those "fussy" products. The original "Dilly Dilly" ad follows the same formula, insisting that it's really not cool to try new things. Keep on keepin' on, Budweiser.
Hurricanes sure don't help
Let's talk weather. By now you get the point that Budweiser sales are down. Sure, millennials aren't drinking it and craft beer is affecting sales, but the weather has also had a significant impact on Budweiser sales. In 2017 America experienced two disastrous catastrophic events. First, there was Hurricane Harvey hitting Texas, then there was Hurricane Irma sweeping up the East Coast through Florida. Budweiser said the weather affected shipments to the areas, hurting sales.