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Wednesday, February 4, 2015

Super Bowl Commercial Shows That The Beer Giant Is Scared, and For Good Reasons

Craft beer is no longer the little brother in the beer market. Just like Michigan State, craft beer has been gaining momentum for the past 15 years and will continue to cause Big Beer problems for at least the next 20 years. The production of craft beer almost tripled from 6 million barrels to 16.1 million barrels from 2003 to 2013. While big beer, like Budweiser, decreased production by almost half; going from 30 million barrels to 16 million barrels.  All stake holders involved are affected by the emergence of the craft beer industry, including sporting venues, outdoor enthusiasts, and the employees of the Big Beer companies. Big Beer companies realize that their strong hold of the beer market is threatened by craft beer, causing them to adapt their way of thinking. Instead of trying to stop the craft beer craze, they are embracing it, shown by Anheuser-Busch InBev acquiring Goose Island Brewery in 2011 and 10 Barrel Brewing Co. as recently as November 2014. 

That is why Budweiser's Super Bowl 49 commercial attacking the craft beer industry is hypocritical. On November 19, 2014 Tripp Mickle of the Wall Street Journal reported that "AB InBev was cutting jobs and consolidating its sales division in the U.S. after the world's largest brewer posted weak third-quarter results in its largest market."

Its not just craft beer that is chipping away at the beer giants flag ship beers market share, Even though health and beer are used rarely in the same sentence, the health conscious population would rather drink a light beer, like Bud's sister beer Bud Light. In 2001, Bud Light overtook Budweiser as the No. 1 selling beer. Again, in 2011 Coors Light knocked the king of beers out of the No. 2 spot. AB InBev is trying to attract the younger crowd, 21 to 27-year-olds. Which is what I think they were trying to do with the latest Super Bowl commercial. 

According to the Wall Street Journal, "The number of people turning 21 peaked in 2013 at around 4.6 million. They represent the largest number of new drinkers since the Baby Boom, according to the National Beer Wholesalers Association." In this young demographic, craft beer takes up 15% of the market share. With this number only increasing in the coming years, AB InBev would be stupid to ignore the younger demographic and continue with the same old marketing plan. The Super Bowl commercial was just the first shot across the bow of the Craft Beer industry. Not for nothing, it may not have converted craft beer drinkers to crap beer drinkers, but it sure got their name out there. 

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