Budweiser, Jim Beam and the craft movement.
By now we have all heard the news that Budweiser will be releasing a barrel aged beer this September. This beer is an attempt, by the large brewery, to compete with the craft beer movement that is taking a chunk of their profit. Each quarter, Budweiser has seen their popularity shrink as they have fallen to 4th on the list of most popular beer in the United States. Craft beer is growing and high volume beer is shrinking in overall sales. Budweiser partnered with Jim Beam to release a limited edition beer, Budweiser Reserve Copper Lager, that uses barrel staves to give the beer a more complex taste. Let’s be honest, if you are reading this you probably turn your nose up at the thought of Budweiser. I know I do. Will this beer have us bourbon folk prying open our wallet come September or waiting in lines at 4:30 in the morning to grab a 6-pack like we did for KBS?
The way sales and marketing are headed, beer and bourbon are trending upwards for the craft side. More and more craft distilleries are popping up every week. Gone are the days when a company can just make good ol' bourbon or beer without any fancy finishes, glittery labels, or gimmicky stories. Craft distilleries are making our favorite drinks of choice exciting again. They are pushing larger companies to change or die. This isn't just about bourbon or beer. This pertains to just about anything. Within the last several years, there have been a few bigger name companies shutting down: Sears/Kmart, Toys “R” Us, Circuit City, Blockbuster. You know what they all had in common? They didn't plan accordingly for the future and didn't adapt to the current market until it was too late. Alcohol is the same way, but for bourbon it is even more important that they predict trends accurately. Their product can't be made in a month or so. It takes years before the product they make to ever hit a shelf. Talk about keeping you up at night. Working for Jim Beam and deciding how much whiskey you need to throw in a barrel to be able to sell in 4 years could stress anyone out. I have a hard enough time planning ahead with how many pairs of socks I’ll need on vacation to last me the whole trip.
Obviously, this example is a bit skewed because Anheuser Bush owns both Bud Light and Budweiser, but the brands themselves still stand alone. People want to be loyal to the brand. They aren't necessarily loyal to Anheuser Bush. They are loyal to Bud Light or many of their other brands. Bud Light has a lot of diversity in their brand and they are number one. Whereas, Budweiser has very little diversity and they keep slipping down the list every year. That diversity has been shown to lead to success. The number 1 bourbon seller in the United States is Jim Beam, and you know how many different Jim Beam label products they have? Over 10. At one point Maker’s Mark was the best-selling bourbon in the U.S., but was overtaken by other brands. For the longest time Maker’s Mark sold 1 thing, hand crafted bourbon. They made collecting bourbon bottles fun, but fell short with variety in their product. They have since added a few other products, Maker’s 46, Cask Strength and Private Select. Much like Anheuser Bush, Jim Beam and Maker’s Mark are owned by the same company. Both are doing well, but one is doing much better than the other, the one who extends their product line. Bill Samuels Jr. was never a believer in “line extensions,” but reluctantly gave way and introduced Maker’s 46 in 2008. I think that one small step kept Maker’s Mark on the upwards trajectory and kept them relevant.
This move for Budweiser is an acknowledgment that they need to change. They realize they need product diversity and partnered with the largest bourbon producer in the world. I applaud them for stepping out of their comfort zone and trying something new. I won't be waiting in line for this to be released. However, if I'm out and see a 6-pack on the shelf, I will pick it up just out of curiosity. It’s amazing, to me, that smaller local breweries and distilleries can put so much pressure on larger companies that they are forced to change their product line. We, the consumer, have a much larger voice than we realize and I look forward to that voice pushing for new innovation and keeping the larger companies on their toes. The big alcohol giants better look out. Local craft is taking over.