Global Insights, Innovation

Dilly Dilly – Millennials like your Ads but Not Your Beer!

5 Feb , 2018  

The Super Bowl is a great opportunity for advertisers to reach a large customer base. We have grown accustomed to seeing many entertaining, emotional, funny, and even inspiring advertisements during the Super Bowl. All, of course, in the name of them convincing us to buy their products.

Perhaps no industry has seized on the Super Bowl like that of beer. In fact Anheuser Busch has been the largest spender on Super Bowl ads. Since 1995, they have spent (invested) over $500 million on these advertisements! Why?

The Super Bowl is a big draw, with some 100 million people watching. That is actually down a bit in recent years, but still the largest single advertisement opportunity each year on TV. The Olympics and World Cup surely surpass that, but are not annual. A 30 second ad cost some $5 million in Super Bowl LII, and the large beer companies are seemingly happy to pay. Maybe they shouldn’t be so happy.

Why? Beer has a big problem. In spite of the rise of craft and microbrews, Americans (and others around the world) are just not drinking it like years ago. The likes of Anheuser Busch need not just create brand awareness but need to stimulate demand and create reasons for us to buy their products. It is amazing to consider the data. Beer per capita consumption peaked in the late 1970s and early 1980s. Wine and spirits have been on the rise, as noted by VinePair in the below comparison of beer, wine, and spirit consumption. Overall, alcohol consumption per capita is rising in the US, but that is after a mighty fall from the 1970s and and 1980s.

But, the drop in beer consumption is everywhere, even in emerging markets, as noted by the Economist. Yes, Germany drinks more beer, but note that overall beers sales are falling around the world.

There seems to be a conundrum. We see so many new craft and microbreweries in urban areas. Yes, there is growth there, and it is coming from the large brands, like Bud Light, giving up market share in a shrinking market. The Brewers Association reports strong production and dollar growth in craft beers, yet a flat (negative if corrected for per capita) sales position for beer overall. Import beers are growing even more (even as the US dollar has fallen). Interesting. Why do people want more small batch, craft, imported, and expensive beer? That is the marketing challenge.

But first, why all of this decline in the consumption of beer? It it largely driven by demographics.

America is getting older. As we age, alcohol consumption falls. Consider the population pyramid of the US. The baby boomers fueled the beer peek of the 1970s and 1980s. Gen X seems to have taken a few less drinks. It is now up to the Millennials to increase demand for the beer producers. Population trends are not favorable for beer in the coming decades.  Millennials are more multicultural (see data below) , open to more experimentation, and frankly, looking for something original and authentic. That does not come in a Bud Light bottle. It explains the interest in Latin American and Asian beers and beverages more culturally traditional than beer, like spirits and wine.

If the likes of Anheuser Busch want to sell more beer to Millennials they must consider major drivers at work generationally:

1. Authenticity – it explains the rise of craft beers, vintage clothing, mid century modern, and everything that Gen X bypassed by Gen Y, Millennials want.

2. Multicultural – younger people are more multicultural. It is easier to sell a product that the client wants than to stimulate demand for an unwanted product.

3. Experimentation – young people expect to try many things. It explains the experimentation with Airbnb and the rise of many new ethnic eateries in the US. This is good for many small craft breweries, but bad for large multinational brands. Being one house of of one brand is not an advantage. Consider many smaller brands that support experimentation and variety in life. Come to think of it, single choice and brand loyalty are boring for customers anyhow.

The ads were great, but don’t expect these to reverse the slide in beer consumption, Anheuser Busch. A better strategy would be to feature craft products and sell based on human stories of authenticity. Good luck, next season!

These generational wave is just starting to hit America. Are you ready for more changes in your business?

Dilly Dilly!

Professor Walker provides keynote talks, seminars presentations, executive training programs, and executive briefings.

Recent talk topics enjoyed by clients have included:

“Success with an Inter-Generational Workforce: From Boomers to Millennials”

 

“The World in 2050: Risks and Opportunities Ahead”

 

Professor Walker has provided these talks and programs to leading firms and governmental organizations. Click here to learn more about his talks, references from clients, options for customized talks and programs, and details on scheduling a program for your organization.

About Russell Walker, Ph.D.

Professor Russell Walker helps companies develop strategies to manage risk and harness value through analytics and Big Data. He is Clinical Professor of Managerial Economics and Decision Sciences at the Kellogg School of Management of Northwestern University. His most recent book, From Big Data to Big Profits: Success with Data and Analytics is published by Oxford University Press (2015), which explores how firms can best monetize Big Data. He is the author of the text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management through business case studies.

Professor Walker has developed and taught executive programs on Enterprise Risk, Operational Risk, Corporate Governance, Analytics and Big Data, and Global Leadership. He founded and teaches the Analytical Consulting Lab, Risk Lab, Global Lab, and Digital Lab, all very popular experiential learning classes at the Kellogg School of Management, which bring Kellogg MBA students together with corporate opportunities focused on data and strategy. He also teaches courses in risk management, analytics, and on strategies in globalization. He was awarded the Kellogg Impact award by Kellogg MBA students for excellence and impact in teaching.

He serves on the Scientific and Technical Council for the Menus of Change, an initiative led by the Harvard School of Public Health and the Culinary Institute of America, to develop healthier and more environmentally friendly food choices. He is a former member of the board of the Education and Technology Committee to the Morton Arboretum. He was a board member of the Virginia Hispanic Chamber of Commerce, where he developed support programs for Hispanic entrepreneurs and worked with US senators on US Latino matters.

 

 

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By  -      
Russell Walker helps companies develop strategies to manage Risk and harness value through Analytics and Big Data. As Clinical Professor at the Kellogg School of Management of Northwestern University, Russell Walker has developed and taught leading executive programs on Big Data and Analytics, Strategic Data-Driven Marketing, Enterprise Risk, Operational Risk, and Global Leadership. He founded and teaches the popular Analytical Consulting Lab and Risk Lab, experiential classes, which bring Kellogg MBAs together with real-world projects in Analytics and risk evaluation. His is the author of the book From Big Data to Big Profits: Success with Data and Analytics (Oxford University Press, 2015) which examines data monetization strategies and the development of data-centric business models in the new digital economy. He is also the author of the award-winning text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management as a competitive advantage. Dr. Walker consults with firms on the topics of Big Data and Analytics, Risk Management, and International Business Strategy. Russell Walker can be reached at: russell-walker@kellogg.northwestern.edu @RussWalker1492 russellwalkerphd.com



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