Budweiser Black Crown making Super Bowl debut
The new high-alcohol brand will take on cocktails and craft beer as Anheuser-Busch tries to cut losses.
In Anheuser-Busch InBev's (BUD) eyes, the answer to flagging beer sales is just a few million Super Bowl ad dollars and some scorching alcohol content away.
Ad Age confirmed Tuesday that the multinational brewer behind Budweiser, Stella Artois, Becks and a host of other brands will use its Super Bowl ad time to promote Budweiser Black Crown, which weighs in at 6% alcohol by volume compared to 5% for Bud.
It's the second year in a row that A-B has used Super Bowl ads -- for which CBS (CBS) is charging between $3.5 million and $4 million per 30-second spot -- to highlight a higher-alcohol brew aimed at steering drinkers away from cocktails, malt beverages and craft beers. Last year, Bud Light Platinum received the high-priced push.
So far, few of A-B's Super Bowl and football-related efforts have scored it new business. Despite paying $1 billion to take the NFL's official beer sponsorship away from MolsonCoors (TAP), throwing $240 million at Super Bowl ads in the last decade and signing alcohol sponsor exclusivity deals with the networks broadcasting the event, the brewer's production slipped 3.2% in 2011. Its market share also fell from 47.7% in 2010 to 46.9% a year later, according to Beer Marketer's Insights.
Just last year, A-B watched its Budweiser brand drop to third place among all beer brands sold in the U.S. as Coors Light took over the No. 2 spot. While Bud's market share dropped from 9.7% in 2009 to 8.4% in 2011, Coors Light's share jumped from 8.3% to 8.7%.
Demand for Bud has decreased between 5% and 9.5% each year for the last three years and Bud has lost more than 60% of its sales since peaking in 1988. That year, Budweiser accounted for more than 25% of all beer sales in the U.S., which is just a little less than the 28.4% share of the market held by all of MolsonCoors' brands combined.
Though no single brewer other than A-B and MolsonCoors controls more than 6% of the U.S. market, A-B seems highly concerned lately with the little guys catching up. A-B announced plans to buy Corona maker Grupo Modelo after Corona's 5% growth in 2011 gave it a 5.7% share of the U.S. market. U.S. Senators didn't like that and now the Department of Justice is investigating the proposed deal to see if it could result in a violation of antitrust law.
Meanwhile, with the Brewers Association reporting that the craft beer segment has grown to 5.7% of the U.S. market by volume and 9.1% in sales, A-B has countered craft beer by buying up Chicago craft brewer Goose Island last year and putting more emphasis on its Shock Top wheat beer brands. A-B aims squarely at the craft beer market when it notes that Black Crown was originally conceived as part of "Project 12," in which brewmasters at 12 AB InBev breweries created their own small-batch "tribute" beers with distinct styles. By suggesting that Black Crown has more "body, color and hop character," it's adopting that subgenre's lingo and hoping it succeeds where previous experiments like Budweiser American Ale have failed.
A-B's small brewer problem is much worse than the craft statistics let on. The Brewers Association's numbers don't include brewers like North American Breweries, which produces Magic Hat and Pyramid brands and saw sales grow 8.6% in 2011 to give it 1.3% of the market. Nor does it include regional brewers like D. G. Yungling & Son, out of Pottsville, Pa., which became the largest American-owned brewery in 2011 after sales jumped 17%.
Yet the beer geeks aren't the audience A-B is trying to woo with Black Crown's increased alcohol content. That would be the domain of the malt beverage drinkers who helped increase sales of Mike's Hard Lemonade by more than 16% in 2011. The higher-potency, higher-priced Black Crown and its A-B cousin Beck's Sapphire want a piece of the party that only brands like Mike's and Smirnoff Ice have been invited to in recent years.
Black Crown is slated to debut on Jan. 21, but time will tell whether or not it can plug A-B's leaky sales.
More on Money Now
- Did the government make a Social Security goof?
- College football wins more fans and ad dollars
- Sushi mania: 489-pound tuna sells for $1.76M
Higher alcohol content means you have to drink less crappy beer to get a buzz.
Copyright © 2014 Microsoft. All rights reserved.
- June gold rose for the first time in four sessions as economic data showed that new home sales declined 14.5% in March from an upwardly revised 449K (from 440K) in Feb to 384K. The Briefing.com consensus expected home sales to increase to 455K. The yellow metal brushed a session high of $1287.70 per ounce in early morning action and settled with a 0.3% gain at $1284.80 per ounce.
- May silver also traded in positive territory today, climbing as high as $19.49 per ... More
More Market News
These ETFs are benchmarked to extremely out-of-favor foreign markets that most investors would quickly pass over. Whoever said being a contrarian was easy?
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'