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THE BEER WAR

Shaikh Tabish & Pulkit Mehra

Amity University Noida

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What is Beer?

centurys old process of converting sugaredwater to fermented liquid

some of the oldest recipes ever found havebeen beer recipes

beer was a necessity in ancient times

poor water quality

social and medical contributions

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Whats in a Beer?

BARLEY the body & soul of beer

YEAST the life of beer

HOPS the spice of beer

WATER the integrity & purity of beer

ADJUNCTS Additive grains like rice or corn,fruit or spices

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Why Beer?

Beer is a $91.6 billion dollar category and accounts for overhalf of beverage alcohol dollar sales.

Beer has a 52% share of alcohol retail dollar sales and is 85%of alcohol consumption.

Share of Total BeverageShare of Total BeverageAlcoholAlcohol

Retail Dollar SalesRetail Dollar Sales

Wine

9%

Beer

85%

Liquor

6%

Share of Total BeverageShare of Total BeverageAlcoholAlcohol ConsumptionConsumption

(Gallons)(Gallons)

Wine

15%

Beer

52% Liquor33%

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The beer war

The conception place of Anheuser-Buschs

marketing efforts is the conference room on the 9th

floor at the headquarters which is known as

..The War Room

No wonder its the beer war.

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Breakthrough by budweiser No. 1 brand was Schlitz after the war

1951-52 Schlitz on top, 53-54 Budweiser and 55-56 Schlitz again.

whats the roi or how much do we spend to ensure victory

In 1957 Budweiser grabbed lead again and today outsells 20 to 1

The reason was an inflection point and that was Schlitz built highly

efficient breweries and cutting the brewing cycle which hurt thetaste of the beer.

V/s

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Assault by Heineken

First major imported beer in U.S. A typical flanking attack against nil defense

Outspent its imported rivals year after year

Major hit war born by Lowenbrau and due to its own blunder

if they run out of Lowenbrauorder champagne

Miller bought the rights for Lowenbrau and started brewing in US

Anheusers Michelob struck back struck Lowenbrau by charging

that it was deceptively advertised priced

V/s

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What could have been done

Comparing beer with champagne could have been ok for Heineken

Its problem was not size of market

An offensive attack should have been a better strategy to own the

market first

Could have attacked its weakness which was Holland

Should have launched an attack on as narrow a front as possible

with asking customers to just try and judge for themselves weather

German brand was better rather than telling about 400 yr old and

quality of hops. grains etc.

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Anheusers counterattack

In 1963 they finally made a move to counter Heineken

Launched first high price American beer.

Gave it high price name, high price bottle

Called it MICHELOB

First class is Michelob

It not only outsold Heineken but twice as much beer as all imports

combined

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The rise of miller

The game changer 1970

7th place and running because of 2 things

Phillip morris money

Consistent strategy

Target was Budweiser

Struck at the middle of the line (Napoleons favourite strategy)

Welcome to Miller Time which struck the masses i.e. the blue

collar category

Took 3 years even though spent twice on advertising

Initially miller high life was the brand the champagne of beers

but blue collar appealed

Budweiser countered For all You do, this Buds for you.

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The launch of Lite..

An uncontested area

Tactical surprise

The Pursuit

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Industry feels Lite.

Line extension strategy

First player Schlitz with first movers advantage

Challenged by Anheuser-Busch Natural light

Ask for natural. Dont get misconscrewed

Adolph Coors COORS

Was leader in 9 out of 12 states

Worlds largest brewery with spring water

the most chick brew in the country, The new york times

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Colorado kool-Aid

Made fun of Coors by asking for Colorado Kool-Aid Arrival of light created once in a lifetime opportunity

Pressure created by national brands on regional ones to make it

National

Were 786 brewers in America, about 40 left

New york had 121 today there is 1 Chicago had 40 now none

Launched Coors light which was carbon copy of other 23 brands

available

Reasoned that people couldnt relate to coors as already being

light beer

Now it had two brands for national distribution

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What could have been done

Had the opportunity to switch from guerrilla to offensive strategy

Coors had all the weapons in place the pioneer in light beer and

all the other factors favouring its image

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The weakness of Lite

Print and broadcast world fortunately or otherwise

Never mind, make it a Miller.

Miller high life has a tough time now

This lite mistake had to be paid heavily by Millers High Life

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The fall of High Life

In 1979 high life was only 21% behind Budweiser.

In 1984 it was 68% down i.e. 3 to 1 millers

Miller tackles beer mystery The new york times

Miller flanked itself, we have met the enemy and they is us

Flanking yourself has 2 outcomes which are no-win situations

Line extensions long term effect is totally the opposite of short-

term effect similar toAlcohol .. whose long term effectis known to all but its short term effect makes people forgetits long term effect quite literally.

Those who cannot remember the past, are doomed to repeat it.

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What is a Specialty/Craft Beer?

all Malt Brewing Process

no filler adjuncts to lighten beer

tend to be non-pasteurized, using additionalfiltration for clarity if desired

small Batch Production

tend to produce beer in smaller vessels

regional based

between 15,000 and 2 million BEs

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Whats the Difference?

Imports = brewer supplied products for outside USA

import Companies or holding/distribution companies

Crown Imports, Heineken USA, Anheuser-Busch, Inc.

Craft /Specialty beers = regional / national Brewers independent or regional distribution networks

Sam Adams, Leinenkugels, Redhook

Micro beers = Local/Regional Brewers

independent distribution networks or self distribution

Summit, Surly, Flat Earth Brewing. Co.

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Why Import & Specialties?

changing Consumers

boomer market

gen Xers coming of age

discretionary income evolving marketplace

consumers are demanding broaderselection, unique and interesting products

profitability

higher perceived value

higher margins / profit generators

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Bottle Beer Dos & Donts

Always pour bottle beer into a glass

drinking from the bottle traps carbonation andflavor which can leave you feeling bloated

pouring into a glass releases carbonation,

flavor and aroma of the beer

pour beer down the center of glass to releasecarbonation and flavor

pouring down the side of the glass minimizesfoam and traps carbonation leaving the beer

flat looking and gassy tasting.

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How about a beer?