While unemployment among its core consumers continues to affect sales, Anheuser-Busch is optimistic of a change for the better.
“We believe it is not a matter of if, but when growth returns in the U.S. beer market, and we want to be properly positioned with consumers when that turnaround occurs,” said David Peacock, who heads Anheuser-Busch, a wholly owned subsidiary of Anheuser-Busch InBev.
It's doing just that by building the premium light category, improving the performance of the Budweiser brand and increasing its share of the high-end segment.
“We have room to grow in the high-end category, which will allow us to capture occasions from other beverages,” he said.
The company's acquisition of Chicago-based Goose Island Beer Co., known for microbrews and specialty ales like 312 Urban Wheat Ale and Honker's Ale, will strengthen its high-end portfolio.
“Our recent acquisition of Goose Island allows us to explore and learn more about how to play more effectively in the high-end segment,” he said.
As for other strategies, Anheuser-Busch has partnered with consumer packaged goods companies to cross-merchandise beer with snack foods, water and other high-volume categories. Doing so also benefits retailers because by merchandising two destination categories, they can drive traffic, market basket and revenue, said Peacock.
“We see this as critical to addressing the heavy burden consumers are feeling in the difficult economy,” Peacock said.
To encourage consumers to trade up to premium brands like Bud Light and Budweiser, Anheuser-Busch reduced the price gap between sub-premium (Natural Light, Busch and Busch Light) and premium brands, from 25% to 15%.
The company also had several new product introductions, including Shock Top Raspberry, and a partnership with Jimmy Buffet's Margaritaville Teas.
Along with introducing new beers, Anheuser-Busch has made packaging innovations a priority. Take the “My Bud Light” bottle, which lets beer drinkers personalize their own bottles. Using a key or coin, consumers can write a message or draw an image on the label.
Other packaging innovations include the Budweiser Patriot can and Stella Artois Belgian beer available for the first time in aluminum cans.
Anheuser-Busch has had many significant retail accomplishments over the last year, said Peacock. By acquiring the National Football League sponsorship rights, it can better connect Bud Light with football fans utilizing retail programs, packaging and advertising, he said.
Since the multi-year deal was to begin with the 2011 season, the NFL lockout is not the best news. However, Anheuser-Busch is optimistic the NFL and the National Football League Players Association can reach an agreement.
“Regardless of what happens, the NFL/NFLPA negotiations don't affect how we're planning for Bud Light's sponsorship long term,” said Peacock. “We have plans in place for retail and media commitments to reach Bud Light consumers.”