UPFRONT 1997: Beer/Wine/Spirits

Full-calorie premium beers are a priority again, as the major brewers concentrate on their flagship brands

After launching a tidal wave of new products, often with big budgets behind them, the major brewers have settled down and are again focusing on their core brands such as Budweiser and Miller Lite. With light beer continuing to grow, the Big Three have been engaged in an intense battle for market share. At the same time, a continued robust economy, a pending mini-boom in new, legal-age drinkers, and the influence of specialty beers has led all three to harbor hope that growth in full-calorie premium beers will resume.

As a result, Anheuser-Busch continues to pour money and ingenuity into ways of freshening up the Budweiser brand for younger consumers, even as it repositions the beer as a “Classic American Lager.” Although Miller Brewing has suspended most ad support for new flagship Miller Beer, top execs there have promised renewed money behind the brand once the right marketing message is devised, possibly by this fall. In the meantime, Miller Genuine Draft continues to get some significant money, but strictly on a regional basis. As for No. 3 brewer, Coors Brewing, after having suffered a disastrous bout of new-product launches in 1995, it has concluded that the potential upside is far greater for a turnaround on Original Coors. Although spending behind its biggest brand, Coors Light, is undiminished, the brewer is funneling significant money to Original Coors from budgets previously belonging to the likes of Zima Clearmalt, now in sharp decline. One favorable portent: consumers appear to be continuing to trade up to premium beers from price brands-but there is evidence that not as many may be trading up from premiums to specialty beers. The major brewers will attempt to capitalize on that in the coming season.

Among other brewers, the merged Stroh and Heileman ought to be healthier, thanks to a bigger pool of marketing dollars, although little or none of that cash will go to network TV, given the company’s grab bag of regional, price, specialty and malt liquor brands. Among importers, Heineken USA likely will continue to spend big and Guinness Import likely will ratchet up TV spending after a successful initial foray behind Guinness Stout, although that will almost certainly be confined to spot buys in major import-oriented metros. Although an expansion of Boston Beer’s TV effort behind Samuel Adams is by no means certain, that would also be confined to major metros.

In spirits, the debate rages on regarding advertising on TV, even though the industry has withdrawn its voluntary broadcast ad ban. Most spirits companies are still staying on the sidelines to see how hot the Clinton administration and special-interest groups are going to make it.

In wines, there will be a bump in TV spending, though last year the whole category accounted for just $35 million. Both Gallo and Fetzer are priming the pump with campaigns for their premium varietals, which, as long as the economy stays robust, are attracting more consumers. With the richer profit in the $10-and-up bottles, the companies have more dollars to spend pumping up their brands.

-Gerry Khermouch and David Kiley


* Big brewers focus on their core brands

* Few big-ticket product launches

* Strong growth for light beers and prestige imports, but flattening for domestic specialites

OVERALL: Spending fairly stable

DARK Horse: Can Anheuser-Busch finally devise a marketing strategy that gets Budweiser growing again?

Copyright ASM Communications, Inc. (1997) ALL RIGHTS RESERVED