Beer sales trend down: Is it the taste or the marketing?

Craft beer, as has been noted, is in a boom time that shows no signs of slowing. The beer industry as whole, however, is settling near panic mode. Each quarter shows another dip down in the overall beer drinking population. How can a tiny segment of the beer world be thriving while the overall market, most notably the Big Beer brands, sees its biggest downward trend?

The answer could be a flight to alcohol quality over quantity for the average consumer as the rise in the sale of liquors and spirits coincides with the rise in craft beer. According to the latest data from GuestMetrics, while spirits and wine both saw volume trends improve slightly through mid-August, beer trends deteriorated.

“Beer volumes were -4.3 percent during 1Q13, and then showed a relative improvement to -2.1 percent during 2Q13,” said Bill Pecoriello, chief executive officer of GuestMetrics LLC. “For the four weeks ending July 14, beer volumes softened to -3.8 percent, and during the four-week period ending Aug. 11, deteriorated even further to -5.3 percent, which is concerning, particularly in light of the slight improvement in underlying volume trends that spirits and wine both saw during the same period.”

More to the point, the GuestMetrics data shows that “premium light” volumes have been deteriorating the most, going from -8.9 percent through mid-June to -11.3 percent in mid-July, and now -12.6 percent in mid-August, which is its greatest volume contraction of the eight four-week periods thus far in 2013.

Could the answer also be marketing? Has the once powerful advertising power of Big Beer weakened, or at least lost its message on a new audience? Trade publication Advertising Age posted a great feature that delved into the issue:

When speaking with Paul Chibe, VP-U.S. marketing at A-B InBev, it’s best to tiptoe around the subject of the farting horse. Part of a suite of ads for Bud Light that ran several years ago under a previous marketing regime, it’s become an internal symbol at the brewer of what not to do in advertising. “It’s not going to build the category,” he said. The horse spot epitomized the brewer’s once-sophomoric ad humor, though the period also produced memorable ads such as the Budweiser frogs.

….

Former A-B Chief Creative Officer Bob Lachky — who was behind A-B classic “Wassup?!” — blames his ex-employer for overtesting. “It’s almost impossible to get a breakthrough idea through a system that may be overanalyzing in the pre-test stage,” he said. “Once in a while, you do have to take a chance.”

Mr. Chibe counters that the new regime is taking plenty of risks; it’s just using data to make smarter choices. “Everything that I am running on air is an ad that has been tested and qualified to drive purchase intent and persuasion,” he said. Mr. Chibe has put a premium on music-themed marketing, signing up artists like Jay Z and Justin Timberlake, as the brewer seeks to appeal to millennials with more aspirational ads and fewer frat-boy pranks.

Big brands are also resorting to packaging as a major marketing tool. Coors Light is pushing a “double-vented wide-mouth can” that the brewer says produces a smoother pour. Miller Lite, which launched in 1975 as the first successful mainstream light beer, will be repackaged in its original can design from Jan. 1 to March 15, harkening back to its glory days as the beer that “tastes great” and is “less filling.”

The feature also shows some interesting data on the lessened number of consumers voting that light beers “taste great.” Be sure to head over to Advertising Age and take in the full feature.