We're a special case in Portland, where it's fairly evident that craft beer is giving the macro brands a serious beating. Check out the beer selection at your local grocery (or convenience) store or dive tavern. The macro brands are being displaced...rapidly in some cases. We are an anomaly, of course. Craft beer has been building a following in Beervana for nearly 30 years. But the trends for industrial lager are moving in the wrong direction nationwide...if you're a macro brand.
Given this scenario, I keep wondering what kind of a beating the big boy brands are willing to endure before they launch a serious counteroffensive. Will they get serious when craft passes 10 percent market share? Will it take 20 percent? What's the magic number?
Please realize I'm talking about a serious effort to compete with craft beer. All the consolidations and takeovers of recent years are not that. Shock Top and Blue Moon are most certainly not that. The fact is, the macro brands could make and sell plenty of good beer if they wanted to. They have simply chosen not to.
This is largely a matter of structure. The macro brands are built to make a consistent product cheaply and efficiently. Taste and character hasn't been much of a consideration. Brands are built via advertising, where the big boy brands currently spend in excess of a billion dollars a year. This is the macro business plan in a nutshell...has been for some time.
|This Bud variation is from LA|
Perhaps AB's recently announced Project 12 is a move in that direction. What they did is ask 12 of their regional brewers to create small batch variations of Budweiser. The beers (named by the ZIP code where they originated) use Budweiser's proprietary yeast and (they say) natural ingredients. Terrific. Internal tastings reduced the list to the top six to test market with consumers. The top three will be released in a limited edition variety pack this fall.
Don't expect to see any of the Project 12 beers in Portland. Our opinions aren't going to carry any weight in this conversation. We're hard core craft drinkers. These Project 12 beers are likely targeting folks who haven't yet made the move to craft...cutting them off at the pass, as it were.
It will be interesting to see what happens with this initiative. I suspect it won't gain much traction. But what if Project 12 is part of an ongoing effort by AB to address the challenge of craft beer? What if it's part of a push by the macros? That would be an interesting development.
It seems to me the biggest obstacle the macro brands face is structural. If they want to mount a serious challenge to the growth of craft beer, they will have to change the way they're organized. Changes like that can be difficult ...though not impossible.