Michelob Ultra: The King of Marketing

The great news for craft beer lovers is that the popularity of craft beer and craft breweries has grown exponentially in the last 10 years and is projected to keep doing so in the foreseeable future. That means more options for us beer snobs, and it means that being a “beer snob” is more common than it used to be, with so many people converting to craft beer drinkers. Someday, drinking craft beer might just be what the average person does and I might have to change the name of this blog to “The Everyone Squad”.

Needless to say, all of these craft beer sales have really cut into the market share of the big bad macrobrewers, with all the major brands (Bud Light, Coors Light, Budweiser, etc.) sales declining over the last 3 years. All the major brands with the exception of Michelob Ultra, that is. Yep, they’re up 27% during that time while everyone else is paddling upstream to a 4-7% decline. There is a great in-depth article about it on Bloomberg Businessweek that you can read here for more details, but I’d like to just focus on how they’ve managed to accomplish this feat and can it be repeated.

The first thing that is important to understand is that they were at a competitive disadvantage from the beginning because they were marketing this beer under the “Michelob” name and not one of the more popular major brands. That makes their growth even more impressive when you think about it. We’re talking about Michelob here, do they still even make regular Michelob? (I checked, and they do, although I’ve never seen anyone drink one). If a new beer hits the market,like Budweiser Black Crown or Miller Fortune, people loyal to those brands may give them a try. This will inevitably get some people hooked on the new product, but how many people were loyal to the Michelob brand prior to Ultra? How many people even associated the Michelob brand with a palatable product? You can see the uphill battle they were fighting.

Then came what might be the best beer marketing campaign of all time. Someone at Michelob Ultra’s ad agency clearly licked their finger and stuck it in the air, because they could perceive which way the wind was blowing when it came to consumer beer trends. Or maybe they were psychic, or consulted a well-known psychic like Gary Spivey. They certainly got the insight from somewhere…

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How was Michelob Ultra’s ad campaign different from any other light beer’s ad campaign? Aren’t you marketing it to calorie conscious consumers? Yes and no. If it was just about dieting and calorie counts than there would be plenty of other beers outselling Mich Ultra. After all, Mich Ultra has 95 Calories, whereas beers like Miller 64 (64 Calories) and Bud Select 55 (55 Calories) have them dominated in that department. Plus there are plenty of beers like Amstel Light, Busch Light and Natural Light that have the same 95 calories.

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Certainly they weren’t going to market a light beer based on taste, right? Of course not, don’t be silly. People who drink beer for the taste don’t drink light beer. You can try to market a light beer as being the best tasting amongst its light beer peers, but marketing it on taste alone would be a fool’s errand. That’s why if someone does tell you they drink a particular light beer for the taste, what they are really saying is that they drink that light beer because it tastes better to them than other light beers.

Turns out the devil was in the details. When “light” beers first hit the scene in the late 1970s and early 1980s they were appealing to the calorie conscious dieting consumer and to some extent even non-beerdrinkers who found beer to be “too filling”. I would call this the “Slim-Fast and Thighmaster” crowd. However, when we fast forward to today’s drinking culture, “calorie-counting” and “dieting” are no longer cool, and “light” beer has become something for soccer moms or college kids that don’t have money to buy good beer or want to drink all day without feeling like a stuffed burrito. That’s where Mich Ultra brought light beer marketing into the 21st century. First, the word “light” is not in the title, and second they made it the beer of “fitness conscious” and “active” people, not dieters. That’s an important distinction. There is a positive connotation associated with “being active” or “staying fit”, as opposed to the negative connotation of calorie counting and diets. The latter implies you’re already fat and need to change, the other implies you’re doing well and are just trying to stay that way,… and Michelob Ultra is the beer that will help you stay that way. Brilliant.

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If you hike a mountain, go kayaking, run a 5K, or just play backyard volleyball, Mich Ultra is the beer for you because it won’t limit you or take away from your accomplishments. If you have a spare tire, get lethargic after 3pm, never leave your couch after 6pm and got winded the last time you had to go up 2 flight of stairs, drink some other light beer. Which person would you rather think of yourself as? That’s how Mich Ultra has changed perceptions and captured such a big market share.

It also doesn’t help that Mich Ultra’s top competitors have ad campaigns from the dark ages by comparison. After Bud Light’s questionable “up for whatever” campaign last year, their latest effort simply revolve around Bud Light being “the party beer”, and really wouldn’t appeal to anyone but college frat boys and people who think “spring break” should be a lifestyle.

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Then there is Coors Light, who’s entire marketing just revolves around it being cold. It’s cold-brewed, cold-filtered, shipped cold and has a can that turns blue so you know it’s cold enough to drink. OK Coors Light, we get it, if you don’t drink your beer one half degree above freezing it tastes like New Jersey tap water that got filtered through old driftwood. You’ve made your point.

Lastly, there’s Miller Lite. They seemingly ran out of ideas this year and just told everyone they should buy their beer because they brought back their original “retro” can for a limited time. The only thing worse than buying a beer based on its calories is buying a beer based on its can. You don’t eat the can.

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I have no doubt based on all of this evidence that Michelob Ultra will continue to shine in the light beer marketplace. I just wonder if such great marketing could have worked for other products as well. Could an obscure diet soda like Fresca have stolen significant market share from Diet Coke and Diet Pepsi by being the soda of fitness-minded active people, rather than the soda fat people drink when they don’t want to give up soda?

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Would this marketing work with non-consumable products? Can the Nissan Quest minvan gain ground on vehicles like the Dodge Caravan and Toyota Sienna by being the minivan of cool people? What would that even mean? They could say that regular minvans are for exhausted parents that spend all their time filling it with their children’s sports teams and large grocery purchases, while the Nissan Quest is for people who like to road trip comfortably to interesting locales and take groups of friends on excursions, while having room for coolers and gear. Would you rather be the middle-aged parent in a rut or the cool adventure seeker that shuttles their posse to the next music festival or epic event? It’s all about who you want to be not who you are, and that’s why so many people are drinking Michelob Ultra.

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