Budweiser | Bud Light: Brand Profile
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Anheuser-Busch's Budweiser still has no real challenger for the title of King of Beers in the US. The extended family - led by top-selling Bud Light - accounts for more than one out of every four beers served in America. A run of enormously effective television commercials featuring talking lizards and TV-obsessed couch potatoes did much to consolidate the brand's position between 1995 and 2002, and also boosted Budweiser's profile with a wider global audience. Yet despite its dominance in the US, Budweiser's hold on the international market is far less secure, not least as a result of a long-running and damaging legal dispute with Czech brewer Budvar. That has begun to change now that Budweiser is owned by global titan AB InBev, which has declared its intent to confirm Budweiser as "the first truly global beer brand". At the same time, to smooth ruffled feathers in the US over the takeover of a domestic icon by a foreign company, Budweiser has placed an even greater emphasis on its American heritage since early 2009, describing itself as "The Great American Lager".
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A more mainstream product was introduced in 2005 to cater to low-carb drinkers under the name Budweiser Select. Anheuser claimed at the time it was one of the company's most successful launches ever. An additional variant was introduced in 2009 with even lower calorie and carb content as Select 55. One of the Bud family's more unusual variants was unveiled at the end of 2007: Budweiser and Bud Light premixed with Clamato tomato cocktail. Marketed as Budweiser Chelada (or Bud Light Chelada), this is a version of a cocktail already popular with a Latino market in the US. The product was launched into selected US states with a high Hispanic population in early 2008. It was followed by a lime-infused version of Bud Light marketed as Bud Light Lime, and then a darker craft beer, Budweiser American Ale. New for 2009 was Bud Light Golden Wheat, an unfiltered wheat beer brewed with wheat malt, coriander and citrus peels. Bud Light Platinum, launched in 2011, promised an even finer taste "triple filtered" for extra smoothness, as well as a higher alcohol content (6% ABV).
Bud Light Lime-a-Rita, a ready-to-drink margarita-style malt beverage, was a very popular 2012 launch, followed up with Bud Light Straw-ber-Rita, then Cran-Brr-Rita and Mang-O-Rira. Initially planned as a limited edition seasonal beverage the "Rita" franchise has proved unexpectedly longlasting, with combined sales topping $1bn in 2014. Another addition to the portfolio is Budweiser Black Crown, an amber specialty lager with 6% alcohol content (compared to Budweiser's 5%), which launched in January 2013. In 2014, IRI ranked Bud Light Platinum as the most valuable of the family's secondary variants, though US sales slipped to $287m. It was the #17 best-selling beer by value. Bud Ice was just behind at $279m. Bud Light Lime ranked #19 with $275m.
The market has become increasingly competitive in recent years, not least as a result of the merger of rivals Miller and Coors, first into multinational brewing groups, and most recently into a single US competitor, MillerCoors. After years of stagnant performance, both competitors regained confidence in 2003 and 2004, launching direct attacks on Budweiser's stature. Miller in particular openly mocked the "King of Beers" tag. Anheuser responded by dismissing Miller as the "Queen of Carbs", a reference to its low carbohydrate content, and resulting popularity among Atkins dieters. Yet there was a distinct edge to Anheuser's response. Queen or not, Miller Lite scored a significant rise in volumes during 2004, leading to Budweiser's own (rather late) entry into the low-carb market with Bud Select. Since then, Anheuser has sought to wrap Budweiser in the American flag, disparaging its rivals at first for their "foreign ownership" and proclaiming Budweiser as "America's beer". In 2006, it launched a further patriotic initiative saluting America's servicemen in Iraq and Afghanistan. As Budweiser builds its status as an icon, Bud Light went in the opposite direction, positioning itself as an irreverent iconoclast, in advertising which was skewed heavily towards younger men and their interests. A new strategy was unveiled in late 2009, as Bud Light began moving away from its traditionally "blokey" humour in favour of less edgy positioning which emphasised its "superior drinkability".
The key to Budweiser's success has always been its innovative marketing. At the end of the 19th century, Anheuser-Busch launched a series of innovative promotions for its beers featuring penknives and free lithographs. "King of Bottled Beers" was actually the company's first ever slogan, introduced in 1899 (and in fact borrowed directly from the German beer Kaiserbrau, or "Beer of Kings"). In the 1930s and 1940s Budweiser was "America's Social Companion" or "A Beverage of Moderation". Later in the 1940s, Anheuser-Busch was the first brewer to advertise on television. In 1952, Budweiser officially became branded as "The King of Beers", a slogan which ran until the early 1970s, when it was replaced by ''When You Say Budweiser, You've Said it All''. During the early 1980s, the company launched the ''This Bud's for You'' for you campaign.
However Budweiser's market share had begun to decline by the early 1990s. Not only was the main brand widely associated with an older generation of drinkers, but it was overshadowed by the successful launch of Bud Light. Anheuser attempted to restart growth of the parent brand with the launch of Bud Dry, but this flopped, as did a new slogan, "Proud To be Your Bud", which replaced the previous long-standing "Nothing Beats A Bud". Instead, the group initiated a dual strategy of targeting older drinkers with heritage-based marketing featuring the celebrated Clydesdale dray horses, while reaching out to a younger audience with edgier and more off-the-wall marketing. The introduction of the Budweiser frogs (each croaking a different syllable of "Bud", "Weis" and "Er") in 1995, accompanied by a successful viral marketing campaign, marked the beginning of Budweiser's return to form, and re-established Budweiser as a hip brand for young drinkers. This morphed into the "Louie the Lizard" commercials produced by US agency Goodby Silverstein, which created a huge boost in awareness during the late 1990s, and won a shelf-full of awards.
But even they were eclipsed by the success of the "Whassup!?" campaign, launched in 2000. In fact that ad, produced by DDB Worldwide Chicago, was based on the real-life habits of director Charles Stone III. Stone and his circle of friends had been exchanging the "Whassup" greeting since the mid-1980s. In 1998 he made a short film entitled True about the group; this was seen by DDB and became the basis of the first ad. The success of the Whassup!? campaign was remarkable by any account, spreading the catchphrase into popular culture.
More recently the brand has returned to its heritage, resurrecting the King of Beers tag, and centring much of its marketing around the concept of freshness. In the days before refrigeration, Anheuser-Busch was the first brewer to conquer the problem of keeping beer from going bad before it was delivered to customers, by establishing a national network of breweries as well as refrigerated delivery trains. Although modern technology has made these concerns largely irrelevant, there are still some advantages to getting beer to customers as quickly as possible. The beer's taste is arguably superior, and perceived quality is enhanced. As a result Anheuser has made a virtue out of the fact that each shipment of Budweiser carries a "Born On" date, the date on which that particular batch was packaged. The group claims to be able to deliver its products into stores and bars on average 14 days before other brewers.
Maintaining its dual marketing approach, in 2003 the group launched a tongue-in-cheek radio campaign for Bud Light celebrating "Real Men of Genius", who were in fact anything. This won considerable acclaim, and was eventually expanded as a set of TV ads, although these didn't quite live up to past glories. In 2006, Anheuser announced plans to launch a dedicated web-based entertainment channel, Bud TV, offering custom-made programming, including sports, stand-up comedy, and even Bud Tube, in which users can submit their own homemade content. Produced by Budweiser's core agency DDB, the channel launched with a fanfare in time for Superbowl 2007 with a goal of reaching an audience of 3m users by year's end. However the response from web users was muted to say the least, and after an initial spike, visitor figures steadily dropped over the next few months, falling below 150,000 by Spring. The company launched a review of the concept in June that year, but vowed not to cancel the service altogether. There was a change of strategy in early 2009, and Bud TV was finally terminated in February that year.
By comparison to the US, Budweiser's international profile is still weaker, although that imbalance is changing quickly. In 2012, more than half of Budweiser's total volumes were sold outside the US for the first time in its history. The beer certainly has a strong presence in Canada, where it has been the #1 beer brand since 2003 (produced and marketed by InBev's local subsidiary Labatt). In the UK, one of only two international markets where Anheuser had controlled its own local brewery, Budweiser is the #1 premium packaged lager in bars, clubs and restaurants (but not pubs). Off-trade (ie take-home) sales were £280m in the year to Apr 2014 (Nielsen figures quoted by The Grocer). Budweiser sponsors the UK football Premier League as well as Manchester United football club. Bud Light is not widely available. Budweiser has also proved extremely popular in Ireland, and replaced Guinness as the popular tipple for many young adults.
Budweiser's most important territory, however, is China, where Anheuser-Busch had established the Budweiser
Wuhan International Brewing Company. The capacity of the Wuhan plant reached
Elsewhere, Bud had been produced under license; by CCU in Argentina; in Ireland by Diageo's Guinness; in Italy by Heineken; in Japan by Kirin; in Spain by Damm; and also in the Philippines and Korea. There were also import and distribution agreements with partners based in Central America, Denmark, France, Mexico and Sweden. In 2006, Heineken agreed a deal to begin brewing and marketing the beer in Russia under the Bud name. However all these partnerships came under review as a result of Budweiser's arrival in the InBev family, and have been gradually dismantled. In almost all markets, Budweiser is now marketed by the local subsidiary of InBev. The group has also introduced the beer into several important new markets, not least Russia in 2010 and Brazil during 2011. As a result, AB InBev claimed that, despite erosion in the US, total combined volumes of the Bud family rose by just over 3% in 2011, and that international sales accounted for almost 44% of sales, compared to 28% in 2008.
The main check until now to the brand's international expansion has been a long-running and seemingly irresolvable row with rival brewery Budejovicky Budvar, owned by the Czech government. This company is situated in a city now called Budejovice, but before 1918 the town was known officially as Budvar, while its large population of German immigrants called it Budweis. Adolphus Busch was paying homage to that town when he first introduced Budweiser in the US in 1876. In 1895 the Budvar brewery also laid claim to that brand name and the first row between the two brewers was settled with a 1911 agreement which allowed the American company to use the Budweiser trademark in all territories except Europe. Budvar was the first company to break the spirit of that pact in the 1930s, when it began selling its beer in the US under the name "Original Bohemian Budweiser Beer from Budweis City". A second agreement was signed in 1939 in which the Czech brewer agreed not to use the Budweiser name in North America and several - but not all - European countries. As both companies expanded over the following years those other, unresolved European territories became the focus of a furious legal battle.
Budvar now has the legal right to use the name Budweiser in more than 40 of the 55 countries it exports to. As a result, in around 20 European territories - including France and Russia - Anheuser has been obliged to market its product as Bud. In 2013, Budweiser rebranded as Bud in Italy as well following an unfavourable ruling from a local court over ownership of the name. In several other countries, Budejovicky Budvar has the exclusive right to the Bud name as well. Initially Anheuser was reduced to calling itself "American B" or "Anheuser Busch Bud" in those territories, but now in most cases the company only markets its Michelob brands in disputed areas. Budweiser beer is not sold in the Czech Republic, and was finally withdrawn from Germany in 2012 after repeated attempts to get around the name block failed to win over customers. During the early 1990s, Anheuser attempted to pressure the Czech government into selling the Budvar brewery, but negotiations stalled in 1995. In 2001, Budvar began its first attack on the US since the 1930s, distributing its beer as Czechvar. Meanwhile Anheuser made a renewed effort to introduce Budweiser into Germany, with a competition inviting German drinkers to come up with a new name. At the same time, bottles of Bud with the name part of the label artfully torn off were test-marketed in key urban centres.
By 2002 the battleground had shifted to Australasia, where the two companies continue to fight their way through the Australian and New Zealand courts. In a shock verdict in 2003, the UK's House of Lords ruled that Budvar could market under the Bud and Budweiser names in the UK, making it the only country in the world where the two could co-exist with the same name. Meanwhile the two competitors remained embroiled in more than 50 lawsuits across Europe. Anheuser scored a victory in Italy in 2005, where an appeal court in 2005 overturned a previous ruling allocating the Budweiser trademark to Budvar. The group launched a new assault on Germany in 2006, supported by the acquisition of exclusive rights to sell beer within sports stadium's during the 2006 World Cup. In return Budvar applied to the European Union for protection, claiming that Budweiser counts as a "protected geographical indication" like Parma ham, Champagne or Roquefort cheese.
That long-running row showed signs of heading towards a partial conclusion in 2007 after the two sides agreed a truce under which Anheuser-Busch agreed to take over exclusive US distribution rights to Budvar, which it markets under the name Czechvar. The legal battles between the two companies continues in other markets. In March 2009, the European Court of First Instance upheld a ruling refusing what is now Anheuser-Busch InBev permission to register the Budweiser brand as a trademark in Europe as a whole. The following year, Europe's highest court of all, The European Court of Justice, reiterated that ruling. As a result, Budvar has sole rights to the Budweiser name in 19 countries, including Russia and Germany. AB InBev has sole rights in eight countries, and the two companies may both use that brandname in the UK. In Jan 2013, a European court reinforced AB InBev's rights to use the Bud trademark in all 27 EU countries, and this decision was ratified by the EU Office for Harmonisation in the Internal Market in June the same year.
Budvar is a minnow by comparison with its American "namesake". Total volumes sold in 2009 were 1.3m hectolitres, of which around half were sold outside the Czech Republic.
For a history of Budweiser's development, see Anheuser-Busch profile.
Last full revision 6th September 2013
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