CEOs from America’s biggest brewers are calling for the industry to work together to arrest falling beer sales.
At the annual National Beer Wholesalers Association meeting this week, Joao Castro Neves, CEO at AB InBev North America and Heineken USA CEO Ronald den Elzen called for unity in the face of rapidly declining sales.
Neves noted that beer as a proportion of the alcohol consumed by 21-to-27-year-olds fell to 43% last year from 65% in 2006, and said: “If this trend continues at the pace it is today, by 2030 beer will no longer have the largest share in the alcohol category.”
Elzen added that the industry had lost 35 million barrels of beer – or 11 billion servings of beer – in the past 20 years as result of competition from wine and spirits.
“Every consumer today drinks on average one bottle of beer less per week than they did 20 years ago,” he said. “If this is not a wake-up call that we have to do something, I don’t know what is.
“Wine and spirits are not sitting still and marijuana is being legalized in many states across the country.
“We have to act now and we have to do it together.”
According to Nielsen figures, the four largest beer brands in the US – Bud Light, Coors Light, Bud and Miller Lite – collectively fell more than 4.5% in volume in the nine months to September 30.
Both CEOs felt wine and spirits brands have done a better job of branding, marketing and pricing their products for the evolving consumer demographic.
Heineken’s solutions for saving beer
Elzen’s suggested more industry-wide cooperation was needed in the US to improve beer’s image. He explained how European brewers came together five years ago to produce a joint campaign called “Love Beer”, aimed at shattering negative beer stereotypes, including that it is only for middle-aged guys with beer bellies. Recent European ads are also trying to appeal more to women.
Elzen said ads featuring female beer drinkers had “great results.”
“Europe is not the US, but we have the same issues over here. We cannot solve this alone,” he said.
“We need to invest in the category. We need to do that with the small brewers, the big brewers, the wholesalers, the retailers because we’re not going to crack this if we don’t do it together.”
AB-InBev’s view on the beer market
Neves challenged leaders to find solutions for growing the beer category, even if it meant compromising “for the greater good.”
Among his suggestions were to link beer to fashion and culture, while using unique glassware, would help make it more appealing to women and Millenials as being sophisticated and aspirational.
AB InBev’s Michelob Ultra brand has had huge success with an ad aimed at female consumers that highlights the beer has 55% fewer carbs than a glass of white wine.
“Beer can appeal to the health conscious, fitness-minded consumer in a way that spirits and wine cannot, or it would be difficult for them,” he said. “Imagine you are coming in from a hard run, a hard bike. You wipe the sweat off. You want to celebrate your hard work with something lighter and more refreshing. What do you think of? Beer.
“I stand here confident that we have the opportunity to turn it around.”
MillersCoors’ appeal for unity
Three months ago, MillerCoors CEO Gavin Hattersley begged beer executives at the annual Beer Institute meeting to come together and fight back against the continued pressure from the wine and spirits categories.
Speaking to top executives from organisations such as AB InBev, Constellation Brands, Heineken and Craft Brew, Hattersley said it was important to work together to address industry-wide challenges from wine and spirits, legalised marijuana and Amazon.
“We must all be pro-beer first and try to differentiate our category from wine and spirits, and we must do that together,” Hattersley said.
He also encouraged brewers to adopt “something useful that tells consumers what’s inside their can or bottle,” referencing the BI’s Voluntary Disclosure Initiative, which will include serving facts, freshness dating and list ingredients on labels by 2020.
