How to Sell a Beer: The Economics of the New Budweiser Black Crown

The Atlantic


Have you heard of Budweiser Black Crown, yet? Well, have you? Anheuser-Busch InBev NV, the coldly multi-syllabic beer conglomerate that is also the world's biggest brewer, is very much hoping so. The company behind Bud Light and Stella Artois spent millions of dollars coordinating a massive ad campaign around the Super Bowl to launch its new higher-alcohol Budweiser beer.

Why? Because beer drinking is in outright decline in the U.S., and drinkers are asking for one simple thing. More alcohol, please.

Going by amount of liquid consumed, beer is still the most popular alcoholic beverage in America. But tastes are changing. Per capita beer consumption has declined steadily since 1990. The volume of mass-produced beer has fallen in every year since the recession hit. Since 2001, America's beer consumption is down a hardy 11 percent.

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Think of cheap beer sales as a health marker for the blue-collar middle class man. When the recession struck, the hardest hit major industries were construction and manufacturing, which disproportionately employ blue-collar middle class guys. Sales of cheap beer collapsed. As Joe Sixpack goes, so go sixpacks.

Well, most sixpacks, that is. In the last few years, heavier beers and craft beers (think Blue Moon and microbreweries, respectively) are have posted double-digit growth even in the face of a recession. This has been the most important trend in the beer business. It explains why Anheuser-Busch bought Goose Island, used last year's Super Bowl to launch Bud Light Platinum, and used this year's Super Bowl to launch another heavy brew.

Bud Light might still be the most heavily-consumed beer in the country, but the country's tastes are fleeing to higher-alcohol liquids. Liquor and wine consumption is up 20 percent since the turn of the century, and richer craft beers are leading the measured comeback in American beer. Black Crown isn't trying to start a trend. It's trying to catch up. Booze hounds of America, this Bud's for you.





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