THE GIST
News spread across mainstream and niche beer media alike last week, sharing the previously unthinkable: Budweiser, the self-described “King of Beers,” had been dethroned from the top three selling beer brands in America. For decades, Budweiser had held the top spot before being surpassed by Bud Light in 2001 and falling to third in 2011, behind Coors Light. The latest tumble was because of Miller Lite, which took over the #3 spot, marking the first time that the top three spots were “light” beers since sales data had been tracked.
"It was inevitable,” Beer Marketer's Insights executive editor Eric Shepard told The Washington Post.
WHY IT MATTERS
Aside from the pressure of meeting an arbitrary goal of existing within the tidy structure of a top-three anything, the truth is that headlines hinting at the downfall of Budweiser don’t get at the broader context of what’s going on. It’s not necessarily that Bud is dying. It’s just dying slightly faster than its top competitors.
According to data tracked through IRI's MULC channels of grocery, convenience, and other stores, Budweiser was 2.5% behind Miller Lite in dollar sales and 5.8% in volume. But the most important part of the story isn't just Bud's changing sales, but its main competition as well. From 2016 to 2017, Bud Light (-4.9%), Coors Light (-1.9%) and Miller Lite (-.8%) all lost IRI-tracked dollar sales. Budweiser (-5%) was just bleeding a bit more than its closest rival.
It's also worth noting that in this specific data set that Bud Light, despite its losses, still sold $1.3 billion more than Coors Light and Miller Lite combined. Dilly Dilly, indeed.
A look at the five-year trend for these beers does offer another winner, however. After a rebrand to play up its historic roots in advertising and packaging, 2015 is noted as a pivotal year for the MillerCoors’ original "lite" brand. The company has been piling on AB InBev recently, utilizing taste tests to show how consumers prefer Miller Lite over Bud Light, including “more than 70 percent of the time” in one recent survey.
The most interesting brands may be those outside Budweiser's new spot. Despite a five-year drop of 4.7% in sales, Miller High Life was actually up 1.4% from 2016 to 2017, which included some of its best quarters since 2009. Hamm's, noted last year as the "best macro beer in America" by a panel of brewers, was up 40% in dollar sales from 2013 to 2017. Another regional and historic brand, Rainier, grew 80% in that same time frame.
Those last two present a worthwhile footnote as conversations in beer continue to focus on the benefit of “local” and connecting to the community in which they exist. Hamm’s (Midwest) and Rainier (Pacific Northwest) provide a double-whammy, connecting both in their place and background.
But if you're producing macro beer these days, you can only dream of mimicking the nonstop momentum of Michelob Ultra, which has more than doubled it's IRI MULC sales from 2013 to 2017. In terms of dollar sales for grocery, convenience and other stores, Ultra ($1.66 billion) is catching up fast to Budweiser ($1.98 billion). This is a big reason why Constellation Brands is launching its own low-calorie beer with Corona Premier—it's perfectly clear what they want it to accomplish.
"Corona Premier capitalizes on industry and consumer trends including declines of domestic light beers, growth of high end and interest in new light beers that are premium and have badge value," the company told CNBC.
Pulling back from the headline-worthy news of Budweiser falling from three to four and you'll see there are all sorts of interesting shifts going on for some of the biggest beer brands in the country. It's too early to to say it's a funeral, but it does seem to be shaping up to be a continued battle.
—Bryan Roth