The loudest flavors
While time—and presumably, the right creative touch—will tell if AB InBev’s bold strategies ultimately succeed, it’s safe to say that when it comes to Bud Light, industry watchers are skeptical.
Some see such an array of brands assembled around a large but fast-falling anchor as a recipe for disaster and interpret the whole thing as a kind of dressed-up apology for arriving late to innovations that other companies pioneered—and still lead. Top-sellers in seltzer—White Claw and Truly—aren’t appendages of existing brands but new entities founded by Mark Anthony Brands, the parent of Mike’s Hard Lemonade; and Boston Beer Co., the maker of Sam Adams, respectively. Bud Light’s traditional rivals in light lager—Coors Light and Miller Lite—are conspicuous for pursuing far less than Bud Light in the way of line extensions, a phenomenon that some ascribe to their having maintained a tighter focus on their core brand propositions.
Steinman notes that closely aligning seltzers and beer brands in the way AB InBev has, and Coors, for a time did, might have come at the expense of its potential to grow that segment more than it has. Bud Light Seltzer provided “a real shot in the arm” for the overall brand in 2021, although Steinman projects the seltzer category is likely to decline overall this year. “I think that a lot of people who gravitated toward seltzer were explicitly rejecting beer, so for some, to go to a beer brand seltzer was a heavy lift. Some 70% of seltzer today is White Claw and Truly; beer-branded seltzers are 20% of the market—maybe,” he said.
Bob Lachky, who spent nearly 20 years (1990-2009) in Anheuser-Busch advertising roles, joining the brewer directly from the agency behind the “Gimme A Light” campaign, then known as Needham Harper & Steers, maintains that Bud Light’s line extensions have tended to be more focused on shelf visibility than actual consumer trends. Bud Light’s great size allows for its line extensions to bash into trends with considerable strength and speed but, in Lachky’s view, doing so ultimately serves to dilute its parent’s equity.
“It’s death by a thousand paper cuts,” Lachky said. “When you have a new product launch, you jam it down that distributor’s throat—you make them take it … but [distributors and retailers] will just take another Bud Light facing off the shelf,” he said. “Here comes Bud Light Next. Here comes Bud Light Platinum. And that’s one more facing that Bud Light doesn’t get. It’s one more endcap that Bud Light doesn’t get. And eventually, you’ve killed the brand yourself. You’ve killed it by your own strategy of flanking the hell out of it.”
The notion that too many line extensions have damaged Bud Light is a “risk,” but also, difficult to prove, said Ottenstein. He noted some beverage alcohol brands—like Jack Daniels—have done a lot of extensions without seemingly hurting its core equity.
One clue that at least some of Bud Light’s extensions aren’t just clumsy bandages on a wounded brand can be seen in how AB InBev is approaching another brand whose flagship is troubled very little by existential threats: Michelob Ultra, the low calorie/low-carb brand that’s been arguably the beer industry’s biggest success story in 20 years. That brand too is now flanked with flavored versions and seltzers that viewed alongside their Bud Light siblings, spotlight AB InBev’s “premiumization” strategy and the brands’ respective focus on demographics.