Is the Fastest-Growing Domestic Beer a Key for Beer Marketing?

michelob key hole

Despite ongoing problems with going up against the craft beer sector here in the U.S., AB InBev recently announced it had an OK start to the fiscal year.

In fact, its three core brands – Budweiser, Corona and Stella Artois – actually grew 8.3 percent gobally. It’s just that the company is still having a rough time here at home.

But all is not lost.

In one of those “blink and you’ll miss it” occasions, Michelob Ultra is riding a hell of a wave in sales right now – one that is now into its third year. From 2011 into May 2014, AB InBev-owned Michelob Ultra has seen sales growth of 10.3 percent or more each year. That’s a trend, even if it is easy to ignore as craft beers fly off the shelves.

While Michelob Ultra won’t ever knock off Bud Light as the top-selling domestic beer brand, it is currently the fastest-growing large domestic beer brand at a time when our attention is appropriately focused on the innovation of craft.

In today’s beer industry, I realize that sounds like Michelob Ultra is the senior captain on a high school’s JV football team, but it still counts for something, right?

Even more so, the way this has happened for Michelob Ultra suggests this kind of growth may be sustainable and could even be taken as a “best practice” for others.

There are two important things to consider when approaching Michelob Ultra as some kind of bastion of domestic beer sales.

1. Price point

Nationally, the average price per 24-pack case of Michelob Ultra is about $16. For those consumers looking to do more with less, it’s certainly inviting. But when you look across its competing brands – Bud Light, Coors Lite, Miller Lite, etc. – they’ll all roughly the same in cost.

However, Michelob Ultra saw case sales rise 6.5 percent from 2012 to 2013 while just about everyone else saw a decline. It was head and shoulders above only two other gainers in Coors Light and Busch Light:

domestic beer-beer-case sales-chart-arrow

So what gives? It’s in the marketing. These other brands focus on a variety of aspects – social, youth, energy – but Michelob Ultra never strays from what its domestic consumers are interested in.

2. American waistlines

Michelob Ultra’s selling point is its relative “healthiness” as a beer, clocking in at 95 calories and 2.6 grams of carbs. You may have seen their television commercials, which make the beer feel more like a sports drink with attractive 20-somethings running or bicycling during the day, then partying with Michelob Ultra after they’re finished.

For weight-conscious Americans, this can come across a big positive when nearly 70 percent of US residents are overweight or obese.

Fittingly, the marketing of Michelob Ultra plays directly into our American psyche – one that wants to be healthy, but doesn’t want to take drastic steps like altering diet or increasing exercise. If you want to take on a “healthier” lifestyle but don’t want to give up your habits, it’s easy to imagine consumers thinking a change in a beer’s contents will help them achieve their goals.

In a Gallup poll from last year, 51 percent of adults said they want to lose weight, but just 25 percent said they would seriously work toward that goal. This discrepancy has existed for years:

gallup-weight loss chart

… but here’s where it gets really interesting in relation to Michelob Ultra.

In a study published last year, researchers looked at beer sales from 2001 to 2006 to see if the American beer industry’s fascination with low-calorie beers actually had an impact on sales. It turned out that during that time, 74 percent of Michelob Ultra sales in grocery stores were due to new drinkers.

If Ultra was bringing in new consumers, we can assume (and researchers suggest) it’s drinkers who make this choice because they’re interested in drinking beer, but also considering caloric intake and what that means for them. Just look at their website, which is made to be more like a fitness magazine than a beer brand:

michelob ultra-website

This is taken a step further when you consider that 42 percent of working-age adults – those who Michelob Ultra is targeting – have reported using a product’s Nutrition Facts Panel most or all of the time when making food choices. In restaurants, 76 percent of working-age adults would want nutritional information, if available.

Again, we’re back to the idea that people are being conscious about what they eat and drink and what that means for them.

So what does this all mean?

In a practical sense, what I take away from the success of Michelob Ultra and its relation to consumers is this:

  • The beer’s main selling point is health related.
  • People are interested in their health.
  • People are surrounded by a craft beer boom, meaning they will have greater curiosity.
  • Michelob Ultra capitalizes on interest and its health “benefits.”

Beer-GutBut don’t think this story isn’t applicable elsewhere. If Michelob Ultra is bucking the trend of domestic beers when just about all other brands are failing, would craft breweries benefit from following a similar path?

I’m not talking about trumpeting calories, carbs and ingredients in every beer, but do you think consumers might be interested in knowing that Anchor Small Beer is roughly 100 calories? Or Anchor Steam is 153? Or those session IPAs everyone is clamoring over also offer calorie counts in that range – or below? That last one seems like a perfect storm.

To gauge interest, all you have to do is Google “low calorie beers” and it’s evident there’s a market for finding out which beers people can drink in order to worry less about their waistline. This kind of stuff is important to the general public, even if a previous study showed me that craft beer enthusiasts – myself included – don’t care about caloric intake from beer. BrewDogs will tell you that.

But as companies continue to vie for space in the stomachs of Average Joe and Jane Drinker, this may really matter. At a time when Big Beer is having a rough go of it, brands like Michelob Ultra may not be a cure-all, but is sure is palatable to both the beer companies and consumers stomachs.

Related: Light Beer Battle: Beer, Calories and Weight Gain

+Bryan Roth
“Don’t drink to get drunk. Drink to enjoy life.” — Jack Kerouac


10 thoughts on “Is the Fastest-Growing Domestic Beer a Key for Beer Marketing?

  1. My neighbor has been a Mich Ultra drinker for a few years now and I spent all Memorial day knocking ’em back at a grill out at their house. As he has watched another neighbor and myself grow into craft beer he has somewhat grown with us, to the point of getting a kegerator for his Mich Ultra instead of cases.

    After knocking them back all day last week I can say that it is not an offensive beverage. It’s very watery with a slight grain flavor but few craft beers have that kind of quaffability. No craft beers even come with double the calories of Mich Ultra so they’ve seriously got the win on the health conscious beer consumer.

    1. What also interests me is the potential to move Mich Ultra customers to other “Ultra” products. Not sure if you’ve ever had their Amber or cider brands, but the latter seems to be performing well, too.

  2. I’d love to have nutrition facts on beer labels…if not on the bottles themselves at least their 6 pack containers.

    1. I’ll even settle for “bottled on” dates first!

  3. I would look at event marketing and who they are in partnerships with. They do most all of the Competitor Group’s events including the Rock N’ Roll Marathon Series as an exclusive sponsor(Excluding the Carlsbad 5000 which has Pizza Port as the official beer sponsor). Just to see how big this is here is the info from competitor:

    420,000 participants
    Over 600,000 expo attendees
    Gender: 65% female, 35% male
    Average age: 39 years
    Average HHI: $112,000

    Of course this goes into the waistline category as well but here is a good start to show that there is a lot of marketing that is going into what Michelob does. Surprisingly why isn’t MillerCoors doing the same thing?

  4. To be honest when I I’m drinking beer the last thing I’m thinking about is how many calories it has in it.

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