A-B Wins the Super Bowl, Again
Airs Controversial Anti-Craft Ad

FILED FEBRUARY 2, 2015

Dear Client:

"For the second time in two years, a Budweiser Super Bowl spot has come from behind at the last second to win the Super Bowl pre-game online," declares AdAge. "This morning we declared, 'It's Official: Bud Light Won the Super Bowl of Teasers and Pre-Released Ads,' based on information through Thursday afternoon that Bud Light had accumulated more online views than any other Super Bowl advertiser: over 10 million, according to Visible Measures. By Friday morning, Bud Light was above 15 million views -- but teasers and the actual Super Bowl ad from sibling Budweiser were up to nearly 31 million. Our apologies to Bud Light. All glory to Budweiser (again) and its menagerie of cute and/or magestic animals (again)."

Budweiser's "Lost Dog" won the USA Today AdMeter, again. Dogs and horses make for good ads. Bud Light's "Coin" ad, where a bar patron gets tapped to play in a real life PacMan game, came in No. 16.

But the most controversial ad came in No. 37, and that would be Budweiser's "Brewed the Hard Way." As soon as this ad aired, I started getting texts and emails from readers. "Did you see that ad? Whoa," said one. The reason it was controversial is because it taunts craft brewers and craft drinkers. Here is the copy of the :60 second spot:

Budweiser
Proudly a macro beer
It's not brewed to be fussed over
It's brewed for a crisp smooth finish
This is the only beer beechwood-aged
Since 1876, there's only one Budweiser
It's brewed for drinking
not dissecting.
The people who drink our beer
are people who like to drink beer
brewed the hard way
Let them sip their pumpkin peach ale
We'll be brewing us some golden suds
This is the famous Budweiser beer
(Bud logo)
This Bud's for you.

After the ad aired, Mike Thiel at Goose Island tweeted, "I just think my own company took shots at my job." Wisconsin beer writer Chris Droster tweeted, "It started out great but I don't think going negative is smart strategically." Later he tweeted that A-B was "in damage control mode" and "Can't remember the last time my Twitter exploded in such a unified voice. I don't think the pro-Bud crowd is doing the same, positively." The reference to pumpkin peach ale sent many people to Twitter to point out that Elysian sells a pumpkin peach ale.

A advertising and marketing executive emailed me shortly after the ad aired and said, in his opinion, "I like their boldness and the fact that they are standing up for their beer. But they made a huge mistake in attacking craft. Effectively, they're trying to create a choice between people who 'fuss' over their beer and people who don't give a darn about what their beer taste like. In other words, they're pandering to a shrinking base, as opposed to explaining why even the most discerning beer drinker can appreciate what their product delivers. This will embolden some core Bud drinkers, and make them feel more proud about their choice. They won't drink more, but they'll feel better about it."

The Beer Babe wrote on her blog that the ad was "dangerous": "The above ad is by far the most clear and definitive anti-craft beer advertisement I've ever seen - and it was aired during the Superbowl to an audience of millions. While you may have had the same visceral reaction I did, here's what makes the ad both so effective and so threatening to craft beer. First, it's the first time that instead of changing the conversation with horses and puppies, it's stared directly into the camera and declared itself. These are their terms. This is Budweisers' manifesto - and despite the details that make it hypocritical, it's a very powerful ad, and craft brewers are going to be feeling the repercussions for a while." Another beer writer tweeted: "Ya gotta figure @ElysianBrewing and @10BarrelBrewing feel extra crappy in their gut after the @Budweiser commercial."

One rare supporter of A-B tweeted, "So #craftbeer lovers can make fun of #Budweiser but #Budweiser can't make fun of #craft? Are we forgetting AB owns several #craftbeers?"

My own take is that this ad will resonate with a lot of people, maybe most people. Even people who love craft beer can appreciate that there's a "normal beer out there for normal people." And there's definitely a contrarian mini-backlash to the "craft beer movement" out there. (Check out this article: http://www.thrillist.com/drink/nation/19-types-of-beer-snobs-beer-enthusiasts ) But still, it was a pretty balsy ad.

A-B RESPONDS TO COUNTRY BOY BREWING ON KENTUCKY BILL

Last week we aired the opinions of Country Boy Brewing's DH Harrison on why craft brewers should be weary of allowing A-B to own branches in Kentucky (see BBD 01-28-15). Recall there is a bill in the KY statehouse which would ban brewery branches. BBD caught up with Damon Williams, the Director of Sales & Marketing at A-B's Louisville branch, to get their take on the bill.

"First and foremost there's not one path to market," Damon told BBD. "There's some commentary in terms of there's only one option. You know the simple facts are there's actually five distributors in Louisville: you have A-B Sales of Louisville, which sells obviously Bud and Bud Light and some craft brands both brewed by A-B and those made by CBA through Red Hook, Widmer and Kona. Then you have River City, which is the MillerCoors wholesaler that also has a craft portfolio. In addition to that, you have three craft-centric wholesalers: you have Beer House, which is probably the largest and longest standing. Heidelberg Distributing, which just entered the KY market in the last five years. And Dauntless Distributing, which entered the market in late 2012, which I believe still say they carry Country Boy. So it's not one path to market, there's five wholesalers that are active in the Louisville metro area. Three of them craft-centric and two of them that have just popped up here in the last five years." Damon then made the case that "House Bill 168 is talking about eliminating or liquidating two of those distributors, A-B Sales in Louisville and Budweiser of Owensboro, a distributor we just purchased in December. Ultimately, that means less competition in the second-tier and less choices for brewers to get their beer to market."

"In 1978 we purchased a somewhat fledgling operation in Louisville and we've operated that wholesaler now for the last 37 years. We've grown from 30 employees to nearly 170 today in Louisville. We've grown from single-digit market share to over 50 today - and as we've grown, we've grown not only the business but also our investment in the local community. As we stand today, we're 53-share, we're 170 employees and we're 5.5 million cases in total..... I would say 'House Bill 168 does nothing to help small brewers. All it does is restrict the competition in the middle-tier and it gives government more say in private contracts."

"We're not asking for any change in any law. We've been operating there for almost 40 years.... So folks that call this a loophole, it's not a loophole. It's Kentucky law, it's been supported by the court since we've been operating there for four decades. You'd be hard-pressed to find a more competitive, dynamic, growing market."

MEANWHILE, A-B LOBBIES HEAVILY AGAINST BILL

A-B is reportedly spending big bucks on paid TV ads, push polls, additional hired lobbyists and even so-called robo-calls in Kentucky against the anti-branch bill. What are we talking about? Your editor has received a recording of an automated, paid voice message that is evidently going around in the Bluegrass State.

While parts of this recording are very hard to understand, the woman says she's "calling from the Blue Friends Economic Investment Partnership." [Editor's note: this is apparently a super-secret group as there is no public listing of who is in it.] The call goes on to say, "Need your help. A bill has been filed in the Kentucky state house that will force at least one company - which is Anheuser Busch - to get rid of its successful business. We're introducing everyone to Rep. Diane's office for free so you can leave a message and tell them to oppose House Bill 168, which is nothing more than a bailout for well-connected beer distributors. It'll take a couple seconds of your time."

In the meantime, Kentuckians for Entrepreneurship and Growth ("KEG") has launched a website which includes a wide range of groups supporting their cause. It's an interesting group of bedfellows - including all three tiers of the industry, all three segments (beer, wine and liquor), and even some control advocates, who all are seeking to limit A-B's ability to own distributors. http://keepbeerlocal.com/

Television ads and paid telephones over a legislative proposal may be a little overkill for Kentucky. Your editor has seen a lot of state legislative battles between brewers and distributors and we can't remember one where paid tv ads were part of the theater of engagement?

Politics may be the oldest profession in Kentucky - even older than Evan Williams and Jim Beam - and Southern politics always is good theater, if not good sport. But with the Kentucky legislature due back in this week, your editor will be grabbing a cold beer and plopping down in a ring side seat for this one.

BEER BRIEFS:

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JOB POSTING. A fast growing top 30 craft brewer located in the Northeast is seeking an experienced Chief Financial Officer. Please send resumes to CraftCFO@gmail.com and put "resume" in the subject line.

Until tomorrow, Harry

"I intend to live forever. So far, so good."
- Steven Wright


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