Rebranding a beer in the shifting landscape of the US beer market
The Rise of Modelo and Craft Beers, the Decline of Bud Light, and the death of brand loyalty.
Stealing Share has previously worked on projects for both large and microbreweries (for example, New Belgium).
Read some of the articles we wrote in the past here, including a very recent article on the strategic process of repositioning a beer brand to steal market share. We only keep them on our site to provide a means to see the market changes.
Rebranding a beer or a beer company is a big step. But the market has undergone massive changes since then, and those wanting to succeed had better consider rebranding now. What was valid and vital then is no longer so.
The United States beer market is undergoing a profound transformation, driven by changing consumer preferences, cultural shifts, and the emergence of new players in the industry.
While Bud Light once dominated the market as the preferred choice for many Americans, it faces fierce competition from the rise of Modelo and craft beers. This article delves into the current state of the US beer market, explores the ascent of Modelo and craft beers, and examines the factors contributing to the decline of Bud Light.
The US beer market is one of the largest and most mature in the world. Historically, it was characterized by a few dominant players, with Bud Light, a product of Anheuser-Busch, being the best-selling beer in the country for many years. However, in recent times, the market has experienced significant disruptions, prompting shifts in consumer behavior and preferences.
The Rise of Modelo
Modelo Especial, produced by Grupo Modelo, a subsidiary of AB InBev, is a Mexican beer that has rapidly gained popularity in the US market.
Its rise to prominence can be attributed to several key factors, making it a formidable contender in the highly competitive beer industry.
Modelo's Cultural Appeal and Authenticity
Modelo’s success is partly due to its cultural appeal and authenticity. The beer is often associated with Mexico’s vibrant culture, evoking images of sandy beaches, lively fiestas, and a carefree spirit.
This cultural connection has resonated with consumers seeking a unique and exotic drinking experience. I hope this connection is a clarion call to consider rebranding a beer before losing all your equity.
Moreover, using traditional brewing methods and high-quality ingredients has reinforced the perception of Modelo (read a great article from the New York Times on the beer market here) as an authentic and premium beer.
Modelo Marketing and Branding Strategies
Modelo has also made significant strides in its marketing and branding efforts.
The brand has employed effective campaigns focusing on storytelling and conveying the essence of Mexican culture.
By emphasizing its heritage and invoking a sense of adventure, Modelo has successfully created an emotional connection with consumers, particularly the younger demographic.
Expansion and Accessibility
Modelo has strategically expanded its distribution network, making its products widely accessible across the United States.
This availability and competitive pricing have contributed to the beer’s growing market share.
The Rise of Craft Beers and the killing of brand loyalty
Craft Beer Revolution
The craft beer revolution has altered the beer-drinking landscape, appealing to consumers seeking artisanal and locally sourced options. Craft beer branding has always been about local.
Craft breweries, typically smaller and independent, have garnered a dedicated following by emphasizing quality, creativity, and experimentation.
However, this surge in craft beer options has notably impacted consumer behavior, leading to a decline in brand loyalty.
This is the reason I wrote this article on rebranding a beer. Craft brewing may go back to being a hobby if no one makes significant moves.
Customers continually seek novelty and variety, often switching between beer brands and styles for something new and exciting.
Consumer Preferences and Diversity
How rebranding a beer makes better sense
Craft beer branding has capitalized on changing consumer preferences. But their actions only serve to reinforce the feeling of no brand loyalty. When you look at the trends, rebranding a beer does not seem so extreme.
Millennials and Generation Z seek products that align with their values, such as authenticity, sustainability, and community engagement.
Craft breweries often focus on these aspects, hoping for a strong sense of brand loyalty and a dedicated following among consumers. It is not working as planned.
Millennials and Generation Z have displayed a strong desire for unique and authentic experiences.
The craft beer industry has tried to capitalize on this trend by allowing consumers to try something new and different with every purchase.
But the excitement of discovering novel flavors and styles has become a significant driver of consumer behavior, leading them to explore various craft beer brands and products.
Craft breweries are known for their willingness to experiment with various ingredients, brewing techniques, and styles, resulting in a seemingly endless variety of beer offerings.
Craft breweries push the envelope and try to have something to cater to virtually every taste preference, from traditional ales and lagers to experimental sour beers, barrel-aged brews, and even beer hybrids.
With everyone looking for something new rather than something meaningful (like an emotional brand), Craft breweries are reinforcing the “no loyalty to a brand” movement we see today.
Craft breweries often adopt creative marketing strategies that play into the novelty-seeking behavior of consumers.
Limited releases, seasonal beers, and collaborations with other breweries or local businesses generate a sense of urgency and exclusivity.
Additionally, craft beer packaging often features eye-catching and artistic designs that attract consumers and encourage impulse purchases.
But a fun design and a quirky name won’t cut it for long. To keep customers coming back, this quirky and fun catch-22 must be repeated over and over again.
The decline of Bud Light and shifting consumer tastes
The decline of Bud Light can be attributed, in part, to evolving consumer tastes.
Traditional mass-market beers like Bud Light, known for their light and mild flavor, no longer fully satisfy the preferences (read about persuasive branding here) of contemporary beer drinkers.
Consumers increasingly seek bold and distinct flavors, which they can find in the burgeoning craft beer market and Modelo’s cultural appeal.
Competition from Modelo and Craft Beers
Modelo’s rise (they are currently the most popular beer brand in the US— surpassing bud light which held that honor for 40 years or more) and the surge of craft beers have presented formidable competition to Bud Light.
Modelo’s cultural connection and marketing efforts (and Budweiser’s brand message failures) have enabled it to carve a niche among consumers seeking a different drinking experience.
Simultaneously, craft beers have lured away Bud Light drinkers with their diverse options, innovative styles, and emphasis on quality.
The US beer market is undergoing a remarkable transformation, with the rise of Modelo and craft beers reshaping the industry’s landscape. Modelo’s cultural appeal, authentic branding, and accessible distribution have propelled it to newfound success, while craft beers have charmed consumers with their diversity, innovation, and local connections.
A warning to microbreweries
Craft a brand identity that sets you apart from the competition. Your brewery’s name, logo, and packaging design should reflect the essence of your brand and the emotional connection you aim to establish with consumers.
Consistency in your brand identity across all touchpoints creates a strong and memorable presence in the minds of consumers.
But it’s all about the customers. Not you and your beer or brewery. (Read about relaunching your brand here)
Rebranding a beer is a mixture of smarts and reality
Storytelling is a powerful tool to build emotional meaning around your brand.
A compelling narrative can still help forge an emotional bond between your brewery and consumers, making them feel a part of your story and more inclined to support your brand.
In this dynamic environment, breweries must fix their brand message or be forced to innovate constantly.
They must engage with consumers on a deeper level and offer products that cater to their sense of self.
But micro-breweries are in love with their aging silly stories, and the big breweries are too stagnant to reinvent themselves. As a result, the standard lager market will continue to drop.
The future of the US beer market will undoubtedly witness further transformations (and failures and bankruptcy) as consumer behaviors and trends evolve, shaping the industry’s trajectory in the years to come.