Beer Buyers' Belts Backslide

by Robert Passikoff , Op-Ed Contributor, June 22, 2010

Part-time philosopher and full-time drinker Homer Simpson once noted, "Beer is the cause and solution to all of life's problems," and it seems he's right on both counts -- at least when it comes to the U.S. brewing industry this summer.

The $100 billion industry is staggering into the critical selling season with its weakest position in years. Sales for the 11 biggest brands are down and only four of the top 30 are posting any gains at all.

Despite massive media support, the big brewers have seen their leading lights -- Bud Light, Coors Light and Miller Lite -- shares decline. Bud Light is down nearly 6%, the first negative year in the brand's 28-year history. MillerCoors' Coors Light and Miller Lite, down 0.5% and 8%, respectively.

Brewers are trying everything this summer from ramped-up spending to line extensions to special bottles, hoping to somehow engage consumers and slow the declines. Returning their brands to growth mode won't be easy.

Increased unemployment levels are correlating with consumers (mostly younger and minorities) drinking less beer and, thus, the industry shipping less beer (-4%). And, in many cases, consumers are opting for bargain brews, or saving their money to splurge on "craft" beers.

Leveraging loyalty -- and achieving real consumer engagement -- could help ease some of the pain. Loyal customers are six times more likely to buy more of your products and rebuff competitive offers -- especially price-based offers -- and interesting packaging.

According to Brand Keys' Customer Loyalty Engagement Index, currently, the top three light beers are Keystone Light, Busch Light, and Coors Light. The top three regular beers are Pabst Blue Ribbon, Sam Adams, and Corona, so brewers can at least raise a glass to them.

And if you get the loyalty part of the equation right, you don't necessarily have to spend a lot of money playing consumer "catch-up." When you have engaged consumers, you have consumers in active mode where, while they may believe a beer may be judged with only one sip, they also feel it's better to be thoroughly sure!