Anheuser-Busch Companies, Inc.

Author:Judson Knight, Mark Lane, Rebecca Stanfel
Pages:105-130
 
INDEX
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Page 105

1 Busch Place

St. Louis, Missouri 63118

USA

Telephone: (314) 577-2000

Fax: (314) 577-2000

Web site: www.anheuser-busch.com

BEER … OR MICHELOB? CAMPAIGN
OVERVIEW

In 1998 Anheuser-Busch Companies, the Saint Louis, Missouri-based brewery best known for its premium Budweiser and Bud Light beers, greatly increased the advertising budget of its Michelob line of superpremium beers. After spending just over $17 million in 1996 and even less in 1997 on promoting Michelob, Anheuser-Busch devoted an estimated $30 million to the brand in 1998, primarily for a television-based campaign created by Leap Partnership of Chicago. Using the tagline "Beer … or Michelob?" the campaign sought to differentiate Michelob from a confusing plethora of super-premium, specialty, and microbrewery brands flooding the U.S. market. It placed particular emphasis on publicizing Michelob Light, which was widely seen as having more potential for sales growth than its full-calorie Michelob siblings.

The humor-based television spots broke during CBS's broadcast of the Winter Olympics from Nagano, Japan, in February 1998 and continued with little conceptual modification through 2001. One characteristic spot featured an actor unwilling to order a beer in a scene that called for him to do so; instead, he insisted on ordering a Michelob. Other prominent spots in the campaign focused on a negligent grocery-store employee whose bagging technique changed radically for the better when a customer purchased Michelob Light. The campaign began to focus more on Michelob Light, and the tagline was adjusted to "Beer … or Michelob Light?" Print gradually became a more prominent element of the increasingly robust campaign; by 2001 Anheuser-Busch had boosted its budget for the Michelob brand family's marketing to an estimated $50 million.

Michelob Light sales grew each year that "Beer … or Michelob?" ran. Although it was true that the brand had been growing since 1993, increases in sales growth closely mirrored increases in Michelob's advertising budget.

HISTORICAL CONTEXT

In 1852 George Schneider founded the Bavarian Brewery in St. Louis, but in 1860 he sold it to Eberhard Anheuser. The latter hired his son-in-law, Adolphus Busch, in 1864, and in 1872 they first used the "A and Eagle" trademark that would evolve into the logo of Anheuser-Busch. The U.S. centennial year of 1876 saw the introduction of Budweiser, a brand created to resemble beers from Bohemia in Central Europe. Twenty years later, in 1896, the company introduced Michelob as "a draft beer for connoisseurs."

The company took the name Anheuser-Busch in 1919, the same year the Eighteenth Amendment outlawed the production and sale of alcoholic beverages in the United States. For the next 14 years, as America

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underwent Prohibition, the company turned to a variety of enterprises such as bottling soft drinks and selling yeast. It even produced a nonalcoholic version of Budweiser. But when Prohibition was repealed in 1933, August Busch, son of Adolphus, personally delivered a case of Budweiser to President Franklin D. Roosevelt in a carriage pulled by a team of Clydesdale horses. The latter would become the Anheuser-Busch symbol, and their use would be closely tied to the Budweiser brand in coming years.

By 1957 Budweiser had become the nation's most popular brand of beer, a position it still held more than 40 years later. Anheuser-Busch diversified its holdings into a number of nonbeverage enterprises and expanded internationally during the 1970s and 1980s. In 1981, responding to the growing market for light beers, it introduced the first extension in what would become the Michelob family of beers: Michelob Light. The latter became America's first brand of superpremium light beer. Three years later, in 1984, the brand added Michelob Classic Dark, which it billed as "the ultimate in dark beers." Finally, as part of yet another industry-wide trend, in 1988 Michelob presented Michelob Ice, for which it also claimed status as the nation's first super-premium dry beer.

TARGET MARKET

Michelob's 1998 advertising placed an emphasis on Michelob Light, part of a larger light-beer category that had grown by 3 percent in the preceding year. By contrast, Anheuser-Busch's Budweiser Light—better known as Bud Light—had seen its revenues grow by more than 16 percent in the same period. And because Michelob Light had performed better than any brand in the Michelob family during the preceding year, accounting for 50 percent of Michelob revenues, Anheuser-Busch elected to divert much of its Michelob budget toward the light brand.

"Beer drinkers may be couch potatoes," a supermarket category manager told Chain Drug Review in March 1998, "but if they can't rouse themselves to shed their fat with exercise, at least they want to slow the weight gains. If they drink a light beer with their baked chips, they can tell themselves they're not neglecting their health." This somewhat derogatory assessment carried more than a grain of truth: light beers appealed to a category of buyer that on the surface might seem like a contradiction in terms—beer drinkers concerned about health and fitness. But of course at heart there was nothing truly contradictory about the desire to enjoy a premium beer on the one hand and the desire not to gain excess pounds on the other. Thus a large portion of the nation's top-selling brands were light beers. Furthermore, the association of beer and sports, symbolized by Michelob's launch of its campaign with the Winter Olympics in February 1998, was an old one.

What was new, however, was Michelob's thrust: along with a drastic increase in spending for the brand's advertising, spots drew attention to Michelob's traditional image in a way that many Michelob ads in recent years had not. "In 1896," Michelob brands vice president David English told Chain Drug Review, "Adolphus Busch created Michelob as a beer for connoisseurs—a step above the ordinary. That image has been blurred by the proliferation of micros [beers marketed by micro-breweries], specialties, and imports in today's market. Our new campaign returns to Michelob's 102-year heritage as the worldwide symbol of brewing excellence."

COMPETITION

Anheuser-Busch and Michelob were not the only ones profiting from the steadily increasing interest in light beers. Miller Brewing Company's Miller Lite, as well as Coors Light, a product of the Adolph Coors Company, had also shown noticeable increases during 1997. But data presented in Prepared Foods in March 1998 showed that Anheuser-Busch held a formidable share of the top brands.

First, of course, was Budweiser, followed by Bud Light. Fifth and sixth places belonged to Busch and Natural Light, and Busch Light was in ninth place, bringing Anheuser-Busch's holdings to a total of 5 out of 10 slots on the top-10 list. Miller held three spots with Miller Lite, Miller Genuine Draft, and Miller High Life. The other two spots belonged to Coors Light and Milwaukee's Best. Michelob Light stood in 13th place, followed by Michelob.

As a superpremium beer, Michelob was hardly likely to make the top-10 list, which in fact included no super-premium brands. Among its prominent competitors were Heineken from Holland and Lowenbrau and Beck's from Germany. Closer to home was Samuel Adams, which used marketing tied to American heritage themes in order to establish a link between itself and the Founding Father whose name it had adopted as its own. In 1997 Anheuser-Busch ran an ad in the Boston area, drawing attention to the fact that, whereas Samuel Adams used images of Revolutionary War—era Boston in its advertising, it was Michelob that actually had a bottling plant in that city.

Michelob also competed with a number of other superpremium brands as well as specialty beers and microbrews. The latter were extremely small operations that typically sold their products only in local markets.

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MARKETING STRATEGY

In 1995 Michelob had ended a long relationship with the ad agency D'Arcy Macius Benton & Bowles and selected Glennon Company of St. Louis as its primary agency—though not necessarily its agency of record, since Anheuser-Busch had recently adopted a policy of working with several firms. Among Glennon's spots had been the "Gimme Guys," a May 1997 campaign tied to a golf-ball giveaway promotion.

Such advertising, based as it was in a raucous brand of humor more typical of Budweiser, was at odds with the strategy Michelob had employed in the 1980s, when its television spots had carried the tagline "Some things just speak for themselves."...

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