Marketing Profile: Bud and Coors
As I imagine it, two German immigrants, Adolph and Adolphus walked into a saloon out west not long after the civil war and realized no one was making a crisp lager like in the old country. Adolph Coors said he was going to Golden, Colorado to start a brewery, Adolphus Busch picked St. Louis, Missouri.
Five generations later, August Busch IV, the great great grandson of Adolphus serves on the board of AB InBev, and the Coors family still controls 10% of Molson Coors, with great grandson Peter H Coors serving as vice chairman of the board.
While drinking whiskey, Adolph, might have said to Adolphus: “When you give up your exclusive on the Super Bowl, 150 years from now, we will show you how it’s done!” And Adolphus, never rattled, said: “We already locked up Kevin Bacon.”
Coors will be advertising in the Super Bowl this weekend for the first time in 33 years. Budweiser gave up its exclusive, which it had been paying $250 million for. Maybe Bud soured on exclusives while watching its beer sit in a sweltering warehouse when the Qatari’s didn’t allow drinking at the World Cup after all.
For its Super Bowl ad, Molson Coors is partnering with Draft Kings on a contest with $500,000 in award money. (Not another contest! What could go wrong?)
Bud has been getting a lot of pre-game ad play with a “Six Degrees of Bud” narrated by Kevin Bacon and Serena Williams in a Caddyshack remake for Michelob Ultra.
So it will be a big brand, big name shoot out between Coors and Bud at Super Bowl LVII. If only Adolph and Adolphus could see their companies now.
Coors is still famously unpasteurized. In 1977, the danger of unpasteurized beer made Coors contraband in Smokey in the Bandit. The beer is still unpasteurized today but is available in all 50 states.
Budweiser is still made from rice. If you have noticed the beer branded as “Bud” in Europe, it turns out there is another Budweiser in the Czech Republic that dates to the 13th century that owns the name Budweiser in most of Europe. The other Budweiser calls itself the “Beer of Kings” instead of the “King of Beers”
In the last century and a half, there was prohibition, labor unrest, hostile take overs, and technological innovations. They have bought out other breweries and been bought by other breweries and even sold breweries to each other. In 2005, Coors merged with Molson, and in 2008 InBev bought Anheuser-Busch creating AB InBev. In 2016, when AB InBev bought SABMiller, the regulators made them sell Miller to Coors.
In the US, the beer market is a bit over $100 billion in annual revenue, and Bud has about 40% of the market and Coors about 20%. AB InBev spends about $327 million on advertising to Molson Coors’ $152 million.
The beer brewing business is complicated. Beer is no sugar water. Turning grains, hops, yeast, and water into beer is a delicate process. And keeping Coors’ non-pasteurized formulation refrigerated for its entire life cycle ads another level of difficulty. There are also thousands of laws and regulations governing every aspect of the process and varying widely from state to state. Unlike the syrup distribution and bottling partner model of the soda industry, the breweries make the finished product and bottle/can/keg it, and send it to a network of 3,000 independent distributors. The distributors have the know how and the necessary licenses to then get the beer to stores, bars, restaurants and event venues.
If the complexity doesn’t kill you, the competition might. Who doesn’t have a brother in law that brews beer? There are now 10,000 breweries in the US and the craft brewers are growing much faster (8%) than the market (1%).
So, what can we discern about the marketing strategy for Coors and Bud? I see very similar strategies. Here are a few possible strategic objectives:
1) Keep the distributors happy. If you want to be a big player, your 3,000 distribution partners need to see your ads. Some may even want Super Bowl tickets, swag, and the like.
2) Grow the marketplace. With competition coming from every angle, the biggest players may want to focus more on marketing that grows the entire pie.
3) Be where the drinkers are. Make sure your brands are represented at the big venues and maybe even get some exclusives.
Clearly, we are only just getting started on the beer story. There is a world of competition outside of the US to consider as well. It is fun to think about Adolph and Adolphus meeting and comparing their plans. They seemed to have had big plans from the start.
Links and References
Coors in the Super Bowl: https://www.chicagotribune.com/business/ct-biz-molson-coors-super-bowl-contest-draftkings-20230207-wfuudyxgundqla7oziqk5ldwqi-story.html
Molson Coors Brands: https://en.wikipedia.org/wiki/List_of_Molson_Coors_brands
National Beer Sales and Production Data: https://www.brewersassociation.org/statistics-and-data/national-beer-stats/
US Beverage Industry Data: https://www.zippia.com/advice/us-beverage-industry-statistics/#:~:text=As%20of%202022%2C%20the%20U.S.,the%20United%20States'%20beverage%20market.
The other Budweiser: https://en.wikipedia.org/wiki/Budweiser_Budvar_Brewery
AB Brands: https://en.wikipedia.org/wiki/Anheuser-Busch_brands
US Market Share: https://www.brewersassociation.org/statistics-and-data/national-beer-stats/
About Qatar, FIFA, and Bud: https://www.nytimes.com/2022/11/18/sports/soccer/world-cup-beer-qatar.html