To Southern Illinois c-store owner Bryan Luke, packaged beer fortunes are tethered to a single overarching idea: brand advertising, marketing and image—they’re deal-makers or deal-breakers.
Luke, owner of Luke’s One Stop, a single c-store owner in Cissna Park, Illinois, says a prominent national beer brand, Bud Light, had long been a category pace-setter at Luke’s. But it lost significant sales following a controversial ad campaign that alienated some brand loyalists.
Another national brand, Michelob Ultra, saw sales take a leap at Luke’s One Stop thanks to spot-on targeted ads that resonated well with customers.
In essence, adult beverages of all types offer a so-called badge for consumers to proudly wear, particularly millennial and Gen Z. Many have flocked to ready-to-drink canned cocktails and flavored malt beverages because they exude that image.
The power of regional and national ads to hold sway over buying decisions is proof positive that retailers can do everything possible across price, promotion and display—and still see efforts go in vain.
“Michelob Ultra is holding down our beer sales because young people view the brand as one that epitomizes ‘fun,’” says Luke, who also enjoys success with Modelo, Coors Light and Busch Light.
“With Mich Ultra, younger folks see the commercials and social media: people playing golf, kayaking a river, having fun,” adds Luke, who devotes five cooler doors to beer and nine to all other beverages.
With the beer innovation pipeline lacking steam, the category is tasked with investing more aggressively in precise targeted marketing to pull itself out of the doldrums and win back loyalists, industry participants say.
“Jim Sabia [Constellation Brands’ executive vice president, beer division] had it right when he said that ‘beer has a chance to market its way out of this slump,’” says Scott Scanlon, executive vice president, alcoholic beverages, Chicago-based market research company Circana.
Scanlon says that many with a stake in adult beverages—from retailers to wholesale-distributors—want to see the beer segment thrive again because it will help fortify the entire category, and produce more basket-filling opportunities in-store.
However, “a lack of new product innovation with beer is evident by the fact that suppliers are simply following what consumer wants, and that starts with RTD cocktails,” notes Scanlon.
Grainy Picture
Scanning the packaged beer product scorecard across the c-store channel for 2024, “slim pickings” is the operative term.
Across the channel (see chart) for a 52-week period ending November 3, 2024, domestic beer dollars (a $13.7-billion market) plummeted 4.2%, with imports (think: Modelo) growing dollars at 5.6%, domestic super-premiums (think: Michelob Ultra) at 0.1%, and non-alcoholic beer as the segment pace-setter at 24.8%.
Some new releases that infused some excitement came from sports-related celebs: NFL Hall of Famer Troy Aikman rolled out Eight Elite Light Lager as part of Eight Brewing Co. Brewed with organic grains, the lager contains 90 calories and 2.6 grams of carbohydrates per 12-ounce serving.
The Real American, co-founded by WWE wrestler Hulk Hogan (aka Terry Bollea) launched Real American Beer, a premium American-made light lager in brewed with 100% North American ingredients.
Indeed, beer needs a resuscitation, as strong packaged beer performance fortifies the entire consolidated category, and adds market basket opportunities.
“Strengthening the core, transforming the ‘above-premium’ portfolio, and attracting more Gen Z and Latino consumers” were top of mind objectives at the fall 2024 Molson Coors Beverage distributor convention.
Speaking about core brand Coors Light, Miller Lite and Coors Banquet, Molson Coors chief commercial officer Michelle St. Jacques, remarked that “we have to build off what’s working.”
Three compelling brand marketing initiatives cited by the CCO as deriving results included:
- Coors Banquet’s “Start Your Legacy,” program and aligned partnership with the hit TV series Yellowstone, which wrapped up its run at the end of 2024. The brand will also launch a new apparel partnership, soon to be announced
- Coors Light’s “Choose Chill” campaign, which features new national and localized ads, along with bigger plays in soccer and basketball, said St. Jacques. The brand also announced that it will add new artists to its “Chill Amplified” launched in 2024; and
- Miller Lite’s relaunch of the “Great Taste, Less Filling” campaign in 2024 with familiar sports celebrities from Major League Baseball and the NFL. The brand also has plans to commemorate its 50th anniversary in 2025.
Attracting a growing number of Gen Z and Latino consumers—as well as convenience store shoppers—are also top priorities. Molson Coors is not “merely talking about appealing to the growing Latino market but driving greater consistency and substantially more investment with these drinkers to get results,” says Molson Coors Chief Marketing Officer Sofia Colucci.
Meantime, Boston Beer Co. introduced a host of innovative products, including non-alcoholic Just the Haze, a hazy IPA, along with award-winning American Light, which the company plans to expand nationally.
Beer Me…Or?
Bryan Luke, of Luke’s One Stop, is eager to see beer rebound: his beer section devotes five of 11 cooler doors to beer, so there’s something at stake. The category is losing ground in Luke’s One Stop at the expense of ready-to-drink canned cocktails, primarily bourbon, he says.
Luke points to modest success with “cheaper” 24-ounce singles of Bud Ice, available for $1.29. Single-serve merchandising is a solid tactic, industry experts say, showing robust growth over the past 52 weeks ending in early November, says Scanlon of Circana.
“This [singles trend] is more than likely inflationary, driven by consumers looking for less out-of-pocket expense at retail,” Scanlon notes. “The 19-ounce single cans are up 62% versus a year ago, driven by White Claw, New Belgium, Goose Island and Sierra Nevada.”
Broadly, imports and super-premium domestics are propping up the offer. “Modelo drives imports while Michelob Ultra drives domestic super-premiums—it’s a case of over-performance by both.”
Scanlon adds that consumers never necessarily “think import,” or “think super-premium” when making a purchasing decision, “but inherently know they want a Modelo or Mich Ultra,” he says, separate from being aligned to a sub-category.
NA beer is also continuing to shine. “This growth trajectory continues to remain very impressive with a 3-year CAGR [compound annualized growth rate] of 25.1%. This is being driven by a premiumization of the segment,” says the Circana category analyst.
Speaking about the poor performance of craft beer lately, Scanlon notes that folks who once consumed them have shifted allegiances to ready-to-drink cocktails, FMBs and more. One outlier among crafts is New Belgium. “I’m not optimistic about any kind of craft resurgence,” he predicts. “The craft consumer is migrating to low or no-alcohol brands.”
While there may be opportunities for domestics or import budget beers to rebound, says Scanlon, “all brewers have been relatively cautious about price increases of late. Beer category price was up 2.1% over the last 52 weeks [early November] compared to a year ago, while last year at this time price was up 5.1% versus a year ago.”
On beer’s dollar and unit performance prospects in 2025, Scanlon says that the large brewers will continue to drive growth. He adds that “there has been some Budweiser resurgence—and Bud will battle to win back that top spot. For beer to make a resurgence, these big ‘horses’ will have to perform better.”