Bud Light Essay

Introduction

Bud Light has long been hailed as the king of beers, but it currently faces many problems. The beer market as a whole has been suffering for the past decade, which has led to a decrease in sales for Bud Light. Furthermore, within the beer market many consumers are moving ways from mass-marketed beers to more craft brews or homebrews. In order to solve this problem, this report will first examine current trends in the beer industry. After this is an analysis of the current market to whom Bud Light sales, followed by a look at the advertising techniques used to gain this market share. Finally, the report identifies a new potential market and provides an examination of advertising techniques and methods that most effectively appeal to this market.

Since target markets tend to change over time, this report focuses on Bud Light’s target market for the past ten years. Advertising and data with respect to this market will be limited to this time period. Additionally, current

advertising campaigns and statistics will focus on television advertisements.

Current State of the Industry

Bud Light was first produced in 1982 and it almost immediately became the third highest selling beer brand in the United States thanks to heavy advertising (Russell). Due to an increased interest in health, light beers – noted for their promise of fewer calories – increased in sales throughout the 1990s, and by 2001 Bud Light overtook fellow Anheuser-Busch product Budweiser to become the top selling beer brand in the country. Bud Light maintains this top position to this day, accounting for nearly twenty percent of all beer sales (Barrow).

However, Bud Light faces many challenges going forward. Beer consumption has steadily decreased over the last decade as consumers move away from beer and toward wines and spirits (Johnson 31). In 1999, beer accounted for 56 percent of all alcohol beverage sales in the United States; by 2012, beer had dropped to 48.8 percent of sales (Taube). Light beer has been hit especially hard by the shift, as it is also losing consumers to craft beers and microbrews. Bud Light specifically suffered its fifth straight down year in 2013, with sales decreasing by 3.1 percent, and sales forecasts for the light beer industry as a whole project sales to hit a 10-year low in 2015 (Leonard). The shift away from beer can be attributed to a change in preferences: young consumers entering the market are less inclined to drink beer than previous generations (Jones). Furthermore, craft beers and microbrews continue to gain consumers by offering a wider selection of products than large national brands while often boasting a superior flavor and quality.

Current Target Market for Beer

Many people associate beer consumption – especially light beer consumption – with college students, and it’s a fair assumption. However, current college students are part of a larger demographic known as Millennials – roughly defined as the generation that reach age 21 after the year 2000 – who serve as the primary target that beer advertisers are trying to persuade. Figure 1 below indicates what percentage of three age groups drink beer as their chief alcoholic beverage.

Figure 1: Percent of Adult Drinkers who Consume Beer as their Primary Alcoholic Beverage

Source: Saad.

As Figure 1 indicates, beer consumption is dominated by younger drinkers, with 45 percent of the 18 to 34 age group – roughly equivalent to the Millennial generation – drinking more beer than any other alcoholic beverage. However, the 35 to 54 age group continues to keep pace with the Millennials, with 45 percent of this age group also drinking beer as their primary alcoholic beverage. The 55 and older age group, however, experiences a large decline in beer consumption, with most moving toward wine as their primary alcoholic beverage.

Additionally, the same study from Gallup found that beer consumption skews toward males. Sixty-two percent of males under the age of fifty consumed beer as their primary alcoholic beverage, compared to only 27 percent of women (Saad). The trend continued into older age, as 43 percent of males over the age of fifty consumed mostly beer, compared to only 17 percent of women. However, despite women’s general distaste for beer, light beer has developed a large following among women (Goldammer).

Millennials are the most important market for brewers.

By marketing to them at a younger age, Anheuser-Busch hopes to instill some level of brand loyalty, so they will continue to buy Bud Light in the long-tem. However, Millennials tend to be more adventurous than previous generations, leading them to seek out variety – part of the reason that many Millennials are moving away from national beer brands to wine, liquor, and microbrews (Jones). Anheuser-Busch has attempted to combat this shift by introducing a number of Bud Light product line extensions. In 2012, Anheuser-Busch introduced Bud Light Platinum, a premium version of Bud Light that contains more alcohol by volume. Anheuser-Busch followed Bud Light Platinum with the release of Bud Light Lime-a-Rita, a margarita-inspired beverage. Bud Light Lime-a-Rita especially enjoyed success; several additional flavor varieties were released, and trademarks have been filed for the potential release of more new flavors

(Schultz).

Despite its focus on Millennials, Bud Light continues to sale to other markets – notably sports fans. Sports fans – who comprise a large portion of the 35 to 54 age group from Figure 1 above– are a large market for brewers and advertisers. Most professional sporting events continue to sell beer from concession stands; additionally, beer is viewed as the drink of choice at many sporting-related places, including tailgates and sports bars.