Five Reasons Major Beer Companies Think You Are Stupid

[kpholmes]

 

[jetsfan]

 

 

Just finished a bottle of Dogfish Head Squall and I am feeling stupider

[Big John]

And UW-Sheboygan is a junior college to boot.

[Chavez]

Top 5 reasons major brewers think you're stupid:

 

1)Coors Light

2)Bud Light

3)Miller Lite

4)Coors* never-ending supply of stupid gimmicks

5)MGD 64/Bud 55 (yes, it's lower in carbs and calories....and alcohol content. Hmmm, how do you lower all those things per serving in a liquid? Hint - it involves ADDING MORE WATER)

 

 

* - I now that they are now MillerCoors (though I think it should technically be SABMolsonMillerCoors, shouldn't it?) but Coors was leading the way in stupid gimmicks for years before the merger.

[BeeR]

Major beer companies are right, generally speaking. Stupid is all the rage.

[loaf]

Just finished a bottle of Dogfish Head Squall and I am feeling stupider

that took me an hour to drink. good stuff though!

tasteless fizzy bad-decision juice

Ha! good one!

[SteelBunz]

Major beer companies are right, generally speaking. Stupid is all the rage.

This......coming from a guy named Beer.

[tazinib1]

Drink Tecate...it helps making trading fun.

Edited June 2, 2011 by tazinib1

[Rovers]

This stuff is cheap. It's swill lager. It's still better than water at about the same price.

[Fatman]

As someone that works for MillerCoors, it's been interesting to see the consumer testing around the Coors Light and Miller Lite innovations.

Edited June 1, 2011 by Fatman

[Chavez]

As someone that works for MillerCoors, it's been interesting to see the consumer testing around the Coors Light and Miller Lite innovations.

 

 

Can you elaborate, or is that info under lock and key?

 

 

Really, as a person who worked for beer distributors for the better part of 17 yrs, I always felt that stuff like "cold-activated" cans and "vortex bottles" were the refuge of those who didn't believe in what was IN the container.

 

From my understanding, the long tail of craft brews/imports is chipping away at the market hegemony of the Big Three (well, two, now). Craft/Imported beer has been the only market segment of the brewing industry actually GROWING for the past decade or so*; holding serve among the major brewers is a victory these days.**

 

But the problem is, Bud/MillerCoors simply can't compete with crafts/imports on variety or quality, so they keep people occupied with shiny new gimmicks. Oh, and they trot out fake microbrews.

 

The main problem for the Big Two is that while it's relatively easy for Bud and Miller to launch broadsides at each other, trying to stomp out the micro/import category using their standard tactics is like taking out an anthill with a sledgehammer. Not to mention they can't really badmouth micros/imports, because all it takes is someone trying a superior beer to shoot their cred all to hell.

 

* - double-digit growth for 10+ yrs, IIRC

 

** - I'm talking gross volume, as opposed to market share; Bud and M/C have been sloooowly declining in sales for the better part of a decade, even though net profits fluctuate up and down for various reasons

Edited June 1, 2011 by Chavez

[Fatman]

As it relates to the packaging innovations, the consumer testing scores around these features is generally very high. The theory seems to be that because the three premium lights (Bud Light, Coors Light, Miller Lite) are so ubiquitous, any point of differentiation between them is a reason to talk about the brand. Even if you find it corny, if you're talking about one of the features it's a win.

 

Your points about the industry structure are more or less correct, though the rise of microbrews still isn't an enormous factor. Combined, MillerCoors and ABI have roughly 80% of the volume in the US, with Bud Light alone about 19% and Coors Light and Miller Lite combined at about 13%. The "craft" segment (which is defined at some annual volumetric production that I can't remember) still accounts for less than 5% of the US market. It is indeed growing very rapidly but most of the small breweries aren't operating profitably whereas MC and ABI have the extreme scale advantage to maintain healthy margins. There continues to be industry consolidation for the more successful craft breweries (Goose Island to ABI) but there aren't a ton of successful, independent regional breweries (though Bell's comes to mind). In many ways, craft brewers face the same problems that MC or ABI do with all of these new microbrews - there are so many of them and (as you well know) distributor mindshare is a hot commodity.

 

You're right that the US beer industry has faced stagnant growth in the past few years, though there are still large brands growing. Bud Light is doing well and Coors Light is on six or seven years of volumetric growth. That success has largely come at the expense of Budweiser (which will soon be overtaken by Coors Light as the second largest beer in the country) and Miller Lite which has been struggling for the past few years.

 

I would bet that most people at MillerCoors or ABI would tell you that they're happy with the growth of micros because it's simply more people drinking beer instead of spending their time drinking wine in the ever-growing US wine industry.

[darin3]

the three premium lights (Bud Light, Coors Light, Miller Lite)

 

 

 

Edited June 2, 2011 by darin3

[Yukon Cornelius]

As it relates to the packaging innovations, the consumer testing scores around these features is generally very high. The theory seems to be that because the three premium lights (Bud Light, Coors Light, Miller Lite) are so ubiquitous, any point of differentiation between them is a reason to talk about the brand. Even if you find it corny, if you're talking about one of the features it's a win.

 

Your points about the industry structure are more or less correct, though the rise of microbrews still isn't an enormous factor. Combined, MillerCoors and ABI have roughly 80% of the volume in the US, with Bud Light alone about 19% and Coors Light and Miller Lite combined at about 13%. The "craft" segment (which is defined at some annual volumetric production that I can't remember) still accounts for less than 5% of the US market. It is indeed growing very rapidly but most of the small breweries aren't operating profitably whereas MC and ABI have the extreme scale advantage to maintain healthy margins. There continues to be industry consolidation for the more successful craft breweries (Goose Island to ABI) but there aren't a ton of successful, independent regional breweries (though Bell's comes to mind). In many ways, craft brewers face the same problems that MC or ABI do with all of these new microbrews - there are so many of them and (as you well know) distributor mindshare is a hot commodity.

 

You're right that the US beer industry has faced stagnant growth in the past few years, though there are still large brands growing. Bud Light is doing well and Coors Light is on six or seven years of volumetric growth. That success has largely come at the expense of Budweiser (which will soon be overtaken by Coors Light as the second largest beer in the country) and Miller Lite which has been struggling for the past few years.

 

I would bet that most people at MillerCoors or ABI would tell you that they're happy with the growth of micros because it's simply more people drinking beer instead of spending their time drinking wine in the ever-growing US wine industry.

then why are they trying to get walker to squash micros in sconny?

[Fatman]

then why are they trying to get walker to squash micros in sconny?

 

Hadn't heard about this...do you have a link? I read a bit about ABI trying to pass distributor requirements in IL, if that's similar.

[Yukon Cornelius]

Hadn't heard about this...do you have a link? I read a bit about ABI trying to pass distributor requirements in IL, if that's similar.

here is one there are many

Currently there is legislation being pushed through the Joint Finance Committee and SECRETLY into the budget bill without feedback from the small brewer!

 

The Chapter 125 Branch Legislation would:

 

All Wisconsin Breweries and Brewpubs will be negatively affected by losing their Wholesale and retail licenses and the benefits those licenses provide. With out this O’so wouldn’t have survived over the last ten months after our split with our local distributor! We certainly wouldn’t have hired two new guys, as we did, and wouldn’t of grown enough to be planning on the future!

 

Eliminates the current option of a brewer choosing to self-distribute or starting a Wholesale Distribution Company. For New brewers coming up, this is really bad because they will never have the chance to begin on their own keeping more of “their” money before choosing to go with distribution.

 

Eliminates a Brewers current right to have ownership in two restaurants. For all of you who eat/drink at the Great Dane, what will happen there???

 

Protects (Grandfather Clause) currents Wholesalers retail licenses, while eliminating that benefit for new start up Wholesalers.

 

Unfairly burdens new Wholesalers and breweries with a requirement of 25 separate independent retail customers before a Wholesale license can be granted.

 

Eliminates the ability of Brewers to sell existing retail or wholesale operations separately from the brewing operation. If you grow large enough to move a portion of your production to a industrial park, you would not be able to sell out of that location at all, if you chose to keep your retail/pint sales out of your “store front.”

 

Eliminates current Wholesale investment in privately held Wisconsin Breweries while allowing investment in out of state and foreign and publicly [/i]traded breweries.

Edited June 2, 2011 by Yukon Cornelius

[SEC=UGA]

here is one there are many

Currently there is legislation being pushed through the Joint Finance Committee and SECRETLY into the budget bill without feedback from the small brewer!

 

The Chapter 125 Branch Legislation would:

 

All Wisconsin Breweries and Brewpubs will be negatively affected by losing their Wholesale and retail licenses and the benefits those licenses provide. With out this O’so wouldn’t have survived over the last ten months after our split with our local distributor! We certainly wouldn’t have hired two new guys, as we did, and wouldn’t of grown enough to be planning on the future!

 

Eliminates the current option of a brewer choosing to self-distribute or starting a Wholesale Distribution Company. For New brewers coming up, this is really bad because they will never have the chance to begin on their own keeping more of “their” money before choosing to go with distribution.

 

Eliminates a Brewers current right to have ownership in two restaurants. For all of you who eat/drink at the Great Dane, what will happen there???

 

Protects (Grandfather Clause) currents Wholesalers retail licenses, while eliminating that benefit for new start up Wholesalers.

 

Unfairly burdens new Wholesalers and breweries with a requirement of 25 separate independent retail customers before a Wholesale license can be granted.

 

Eliminates the ability of Brewers to sell existing retail or wholesale operations separately from the brewing operation. If you grow large enough to move a portion of your production to a industrial park, you would not be able to sell out of that location at all, if you chose to keep your retail/pint sales out of your “store front.”

 

Eliminates current Wholesale investment in privately held Wisconsin Breweries while allowing investment in out of state and foreign and publicly [/i]traded breweries.

 

YOu wouldn't believe the political clout that alcohol/beer/wine distributors have over politicians in all of the states. Here in GA we have gone back and forth a few times with regard to the legality of mail order beers/wine/alcohol. This cuts into the pockets of distributors and the tax coffers, something the politicians hate as it decreases revenue from the people in the form of taxes and decreases campaign funding from the distributors if the politician supports initiatives that decreases the distributors bottom line.

[Chavez]

As it relates to the packaging innovations, the consumer testing scores around these features is generally very high. The theory seems to be that because the three premium lights (Bud Light, Coors Light, Miller Lite) are so ubiquitous, any point of differentiation between them is a reason to talk about the brand. Even if you find it corny, if you're talking about one of the features it's a win.

 

Yeah, unfortunately I believe that.

 

Your points about the industry structure are more or less correct, though the rise of microbrews still isn't an enormous factor. The "craft" segment (which is defined at some annual volumetric production that I can't remember) still accounts for less than 5% of the US market. It is indeed growing very rapidly but most of the small breweries aren't operating profitably whereas MC and ABI have the extreme scale advantage to maintain healthy margins. There continues to be industry consolidation for the more successful craft breweries (Goose Island to ABI) but there aren't a ton of successful, independent regional breweries (though Bell's comes to mind). In many ways, craft brewers face the same problems that MC or ABI do with all of these new microbrews - there are so many of them and (as you well know) distributor mindshare is a hot commodity.

 

Can't dispute this; however, even though micros have a miniscule market share and the best ANY micro can manage is a mere sliver, I think the tail is wagging the dog to an extent here - it's the fastest-growing segment and AB and MillerCoors are probably reacting to it more than they really need to...and some of their tactics are off-putting.

 

Combined, MillerCoors and ABI have roughly 80% of the volume in the US, with Bud Light alone about 19% and Coors Light and Miller Lite combined at about 13%.

 

Funny story - I was reading the book called Beer Blast which was written by the grandson of the man who first imported Heineken into the US, and it functions as an overview of the modern American beer business, specifically post-prohibition - and in the 70s, the #5 and 6 brewers (could be wrong, but I believe at the time it was Stroh's and Heileman's) wanted to merge, and that would have given them a 13% market share, and vaulted them up to the #4 spot. The FTC (or whoever is in charge of those regulatory decisions) nixed the deal, because it would have given the top FOUR brewers over 70% of the market.

 

Now the top 2 control 80% and that's just swell. I guess we don't worry too much about monopolies these days.

[Yukon Cornelius]

wisconsin republicans war on microbrews

Deb Carey is not happy. "I'm so pissed off I can barely see," the founder of New Glarus Brewing Company says about the changes to beer wholesale licensing that the Joint Finance Committee approved Thursday.

 

According to Carey, the action by the JFC represents another milestone in state government's long history of providing favors to large beer distributors, often at the expense of microbrewers like her.

 

Current state law severely restricts the options brewers have to distribute their beer. Only breweries that produce less than 50,000 barrels of beer per year are allowed to sell their beer directly to retailers. All others must contract with wholesalers for distribution.

 

Worried that perhaps microbrewers were operating in too free a market, legislative Republicans have proposed even more restrictions on the beer distribution business. Although the motion approved by JFC will now allow microbrewers to distribute their own beer to retailers, but it will forbid them from holding wholesalers licenses, which, as some articles have indicated, means microbrewers will not be able to band together to distribute beer.*

 

And what would Walker-era legislation be if it didn't offer more power to state government? The legislation also takes the power of licensing of wholesalers away from municipalities and puts them under the control of the state Department of Revenue.