Iconic US beer brand Budweiser has failed to keep pace with European rivals in the fiercely competitive UK beer market. Once seen as an aspirational brand, Budweiser is increasingly perceived as being lacklustre compared to international rivals.
Yet, its fortunes in the UK market could be set for a boost with Anheuser-Busch having last week appointed Fallon to Budweiser’s £3.5m UK advertising account after fighting off incumbent DDB London. DDB is the company’s global agency and Fallon’s appointment marks the first time the UK office has been free to appoint its own agency – and could mark a new dawn in its marketing and brand performance.
Fallon’s brief is understood to be to replace Budweiser’s humorous US strategy with an emphasis on product quality with a UK focus. For its sponsorship of the FA Premier League, Budweiser uses the tongue-in-cheek strapline “You do the football, we’ll do the beer” as a way of getting around its lack of heritage in the sport.
The lager market has suffered of late as drinkers’ tastes evolve, but 2006 proved to be a particularly tough year as sales stagnated in both volume and value terms according to Mintel. Between 2004 and 2006 Budweiser’s UK market share dropped 1% as people acquired a new thirst for cider and lower-alcohol beers.
Increased awareness of responsible drinking and the smoking ban are affecting lager on-trade sales, while lifestyle changes are having an impact as more people reduce their alcohol intake.
Ian McLernon, a former Coors marketer, and now Unwins marketing director and consultant at Drink Works, says: “Budweiser is one of those iconic brands that is struggling because the beer market is struggling, especially as there is a trend towards lower alcohol by volume (ABV) drinks.”
Budweiser, the self-styled King of Beers, is owned by St Louis-based Anheuser-Busch and was first introduced in 1876. Its name was coined by company founder Adolphus Busch to draw on the brewer’s German heritage – and because it was easily pronounced by the city’s largely German population. Today the brand outsells all other domestic premium beers combined in the US.
By the 1980s, the company launched variants such as Bud Light, Budweiser Select, Bud Dry, Bud Ice and in 1994 Bud Ice Light, in its home market. Bud Light and Bud Ice failed to take off in the UK and were later pulled from the shelves. One commentator says the brand has struggled in the UK because of its lack of distribution power.
McLernon says: “The brand has strong awareness; it now needs new products. The strategy for Budweiser in the UK should be to build brand equity by having more than one product.”
Jonathan Gabay, a consultant and founder of Brand Forensics, says Budweiser’s branding has always been “glocal”. He says it has been a brand that tries to promote a global perspective with its heritage in the US while tapping into a local market. “It has always focused on Americana, but the positive side of it,” he adds.
Gabay says the brand is about relaxing and having a good time with friends. “If you buy Budweiser it is about hanging out with your friends; taking it easy. You’re not buying a drink, you’re buying into a good time.”
The company has always put great store in its American roots. McLernon says: “Budweiser is still a huge US brand and in the 1980s US brands were seen as glamourous and quite exciting. But it’s all about authenticity now and US brands are not seen as having much heritage.”
Budweiser advertising has also failed to ignite consumers’ imagination in recent years, despite the success of its “Whassup!” campaign, which went on to win the Grand Prix award in 2001 at the 48th Annual International Advertising Festival in Cannes.
“The ‘Whassup!’ strategy was an iconic campaign at the time. Lately, Budweiser’s advertising has been bland and uninspiring and looks like it’s been created for a US market,” says McLernon. He argues that Budweiser now needs a strong creative campaign that will overhaul people’s perception of the brand.
Allyson Stewart-Allen, a founder of International Marketing Partner and an expert in advising US companies how to tailor their offer to international markets, says the company appears to have a “one shape fits all” attitude to marketing. “You can’t take an American template and impose it on the rest of the world,” she says. A recent promotion entitled Bud Bucks is a case in point according to Stewart-Allen. She says Bucks is not a UK currency and the promotion looked like it had just been rolled out from the St Louis headquarters.
People’s perception of the US is tainted and many observers say it is far from the best platform to trade from. Steward-Allen says: “America is not as aspirational as it was. They need to think about how brand America is being perceived abroad.” If the brewer wants to move the brand on it should promote its German provenance, she says.
However, Budweiser has been involved in a long-standing dispute with Czech brand Budweiser Budvar over the use of the name. If the company can address this and move on, touting its European credentials, it could give the brand a new lift.
Stewart-Allen adds: “You don’t want Budweiser to become the McDonald’s of the beer market because of lack of flexibility in marketing itself.”
1852 George Schneider establishes the Bavarian Brewery in St Louis, Missouri
1860 Eberhand Anheuser acquires the brewery and renames it E Anheuser & Co. His daughter Lilly marries Adolphus Busch the following year
1876 The brewery launches Budweiser. Three years later the company is renamed Anheuser-Busch Brewing Association
1902 Budweiser advertises on electric billboards in Times Square, New York
1951 First brand to sponsor a US network TV show – The Ken Murray Variety Show on CBS
1984 Sponsors LA Olympics. It is the official international beer sponsor of the 2008 Beijing games.