The power of marketing
A couple of weeks ago in an article in the Seattle Post-Intelligencer, writer Bill Virgin makes the following two claims:
Put samples of half a dozen or so mass-market American beers before a panel of drinkers in a blind taste test, and even the most confirmed quaffers would be lucky to match two to the right brand.
But put half a dozen or so mass-market American beer advertising slogans or jingles before a panel of testers, and even teetotalers with some exposure to media would come close to a perfect score.
He then offers six such slogans, which you’d pretty much have to have been in a coma for the entire television era to not know what they are. It is these slogans–these brands–that consumers are dedicated to, not the taste.
Oh, sure, beer drinkers will swear they can taste the difference between the brand they’re loyal to and Bud and Miller and Coors and Michelob and Pabst and Rainier and a dozen more beer brands. They can’t — which accounts for the success of the craft brews and microbrews, as well as the imports.
That might be a bit of a stretch, but is certainly a factor. (Of course, just because it is “craft beer” does not automatically make it good.)
Mr. Virgin cites two books to support his argument:
- Great American Beer: 50 Brands That Shaped the 20th Century
- Great American Beers: Twelve Brands That Became Icons
Both O’Hara and Yenne also credit regionalism, reflecting a time when each region of the country had its own dominant brands (such as the Northwest’s Rainier and Olympia, neither of which are brewed in the state today).
“Today’s craft beers and microbrews have rich and delicious flavors, as well as exquisite variety,” Yenne writes. “Today’s mass-marketed megabrews have enormous advertising budgets, ubiquitous market penetration, and a flavor-neutral taste. The great regional brands discussed in this volume had soul. … The beers themselves identified with their region, and in turn, the people identified with their regional brews.”
Of course, we’ve long felt that bland, megabrewed lagers are only popular because of enormous marketing campaigns. It’s also why they’re losing market share. Their message has become diluted, and people are moving away to not only craft beer, but wine, spirits, and cocktails. It’s kind of like sports teams nowadays. Very, very few players stay for very long, much less their entire career. There’s no time to develop a kinship with any player, especially since next season he may play for your rival. So, essentially, fans are rooting for the uniforms. Except they keep changing, too. (More merchandising opportunities.)
Don’t believe the hype.
(via butchbailey.com)
Postscript: I suggest that any brewer that spends more on advertising and marketing than on actually creating the beer is not a craft brewer.
About The Author
Al
Forty-something, married, with two kids. I generally prefer the English styles - ESB, IPA - but am willing to try just about anything. You can reach me at al@hop-talk.com.
Other posts byAl
Author his web sitehttp://hop-talk.com
Al – Great post, lot to think about all the way through (tough to be brief).
a – If your beer tastes almost exactly like beer from the other breweries then you are left with marketing.
b – I really lover the PS. A fine definition of craft. Probably needs to be a percentage though. I don’t think the megas actually spend more on marketing than beer.
But it reminds me of being at New Belgium Brewing in 2000, shortly after they released the first batch of La Foile. Peter Bouckaert was talking about how wonderful it was to have a lab with seven workers in it, considering he knew Belgian breweries that had none.
So then Greg Owsley, the head marketing guy, did a quick count and figured out there were more people in the lab than marketing. That doesn’t count sales reps, obviously, but dang impressive.
In all fairness, the big brewers have labs that spectacular.
So maybe the rule is if you are spending more money on quality control than advertising then you are a craft brewer.
“(such as the Northwest’s Rainier and Olympia, neither of which are brewed in the state today)”
I would just like to point out to Mr. Virgin that the “Northwest” is not a “state.”
Excessive quality control is one of the problems with mass-produced beer: they define “quality” as consistent and unchallenging. A brewer with no-one specifically employed to do quality control is a craft brewer, IMHO.
But does any brewer spend more on advertising and marketing than they do making beer? I sincerely doubt it.
I went and checked A-B’s annual report and here is how they show their consolidated cash flow for the cost of sales and marketing — cost of sales is approx $10B and marketing, distribution, and admin is only $2B. Not exactly a perfect measure but I think it does support that the beer costs more than the marketing even for the largest of the large.
Also…I’d bet there are a number of craft brewers that do employ people who are solely focused on quality control. After all, one bad batch out the door is hard to recover from. Granted the really small guys can’t afford a dedicated person, but some of the mid size guys like Sierra Nevada can. Of course that opens up a debate as to whether they are craft or not. Definitely not “micro” but I think they do focus on the taste of the beer and not the cost to produce like AB-M-C.
Likewise InBev: €5.5bn cost of sales, but only €2.1bn spent on marketing. I have to say I’m surprised, since both companies produce an industrial product that’s almost entirely water. Compare to Coca-Cola, who had an $8.1bn cost of sales in 2006 and a whopping $9.4bn “Selling, general and administrative expenses”: I’d have thought the transnational breweries would have had a ratio along these lines.
I take your point, Jack, about the line between craft and micro. There are no non-micro craft breweries in this country. But I don’t think a focus on taste is the unique hallmark of a craft brewer: it’s very important to the big guys as well, just in a rather different way.