budweiser trash

Budweiser, Mexican Beer, and Millennials

Budweiser is not having a good year when it comes to U.S. sales and this last quarter only got worse for them. As more and more people turn to drinking craft beer, spirits, and wine, they have seen a continuous drop in sales for their flagship beers, Budweiser and Bud Light. The North American market was Budweiser’s bread and butter for years but ever since 2014, AB InBev has seen a drop in Bud and Bud Light sales every year with a steep 6.2% drop in this last quarter alone. The slide in sales isn’t just AB InBev, however. MillerCoors also saw a 3% drop in U.S. sales this last quarter of both their Miller Lite and Coors brands. While AB InBev is a huge global company, they appear to hold the U.S. market in the highest regard. AB InBev Chief Executive Carlos Brit0 recently said,

“The U.S. is our most important market and we recognize the need to continue to focus on driving topline growth across our portfolio.” 

To help with this focus AB InBev decided to fire their U.S. CEO and replace him with their current chief officer of global sales. But why is Budweiser experiencing such a slump?

Not All Macro Is the Same

Here’s the interesting part, not all macro beer is down. American beer drinkers are totally digging Mexican beer. Corona and Modelo are up 13% this year in U.S. sales. AB InBev actually owns Grupo Modelo, which makes both Corona and Modelo, but in 2013, they sold the U.S. distribution rights to Constellation in a move to settle the anti-trust issues that arose from AB InBev’s purchase of Grupo Modelo. Constellation paid a cool $4.75 Billion for the brand rights at the time, and the year-over-year growth of both brands has certainly been a boon to their portfolio.

Mexican imports aren’t the only mass-produced beers that have seen growth, however. There is one mass-produced, super premium (their category, not ours) beer that is defying all expectations. Michelob Ultra is the largest share-gainer brand in the U.S. for the last seven quarters for a 10.9% growth up from last year at this time. Why the growth from a not-new and by-all-accounts tasteless beer? The answer appears to be in the marketing. Michelob Ultra has positioned itself as the beer of choice for the low-carb movement as paleo and keto diets along with workout lifestyles like CrossFit continue to be popular in the U.S.

Michelob’s marketing continuously targets a health-conscious Millennial demographic which is a booming demo by all accounts. The growth of Michelob Ultra is a bright spot for AB InBev because, of course, they own that brand too.

Enough Pie To Go Around?

Remember when AB InBev made that video slamming the Brewers Association’s seal of independence? In the video, they wax on about the “clear threats from wine and spirits” and lament that the BA’s label is divisive in this common fight against liquor and wine. The funny thing is that based on the numbers we’ve seen so far this year, wine, spirits, and craft beer can all see growth together. Let’s look at the growth the different categories have seen so far this year; wine sales are up 7%, spirits sales are up 4.5%, and craft beer is up 5.7%. While there is no denying that craft beer growth has slowed down, this trend has been expected in the booming industry for a while. Unprecedented growth can only happen for so many years before the market begins to correct itself and we seem to be in that correction.

Is there enough pie to go around? It seems like there could be. People aren’t over all macro beer, as evidenced by the substantial growth in both Mexican beer markets as well as for the “ultra-premium” Michelob Ultra. People appear to be turning away from the “American” mass produced brands, though. Budweiser, Bud Light, Miller Lite and Coors are slumping in sales, possibly because they have failed to catch on with a younger generation of drinkers. As an example, here’s the breakdown of who buys Budweiser in stores:

budweiser who buys it

Based on these numbers Budweiser is most likely to be purchased by older, low-income, Asian people. The fact that 24-44 year olds don’t buy Budweiser, yet are the largest demographic in the U.S., is definitely a thorn in Budweiser’s side. Whereas Mexican imports have been growing in sales as the Hispanic population grows, that only accounts for about half of their sales. The other half are Millennials who love a good Pacifico or Modelo. So get used to seeing Budweiser trying to peddle itself to a younger, hipper demographic, because once again, it seems that Millennials matter a lot when it comes to the success of a beer brand. Budweiser is down, but it’s certainly not out.

beer week donuts

San Diego Beer Week with Thorn

It’s our favorite time of year…San Diego Beer Week! Being that San Diego is the Craft Beer Capital of the world, it’s our duty to make SD beer week the best beer week in the world. Here at Thorn, we take this responsibility very, very seriously. We pull out all the stops to bring you the best in beer events at both our North Park tasting room as well as throughout San Diego. Here’s a rundown of what we have going on during the next 10 days…

AT THORN NORTH PARK

beer week events

Nomad Donuts Pairing:

11/4 12:30 – $25 (plus tax) for the 4×4 pairing with 2 donuts and 2 wood-fired bagels. We not only pair each treat with a beer but Kristiana Zabala, the chef behind the creative concoctions at Nomad Donuts, uses a different, complimentary beer in the food. Yum! Find tickets here…https://www.eventbrite.com/e/nomad-donuts-and-beer-pairing-tickets-38447373128

Mastiff Sausage Co. Pairing:

11/5 12:30 – $30 (plus tax) for a 5×5 course featuring delectable dishes from Mastiff Sausage Co.! Tickets available herehttps://www.eventbrite.com/e/mastiff-sausage-co-beer-pairing-tickets-38545928911

Here’s a peek at the menu…

Course One

Savory Rye Bread Pudding

Toasted Rye Bread, Mastiff Breakfast Sausage, Wild Arugula, Cheddar Cheese

Abbey Wall Belgian Dubbel

Course Two

Sausage Taco

House Made Al Pastor Sausage, Charred Scallion Crema, Cotija Cheese, Red Cabbage, Tomatillo, Cilantro

Barrio Baja-Style Lager

Course Three

Fall Vegetable Hash

Potato and Butternut Hash, Brussels Sprouts, Green Peppers, Creme Fraiche

Chilicabra Pale Ale

Course Four

Chicken Coconut Curry

House Made, Chicken Curry Sausage, Heirloom Rice, Red Pepper Coulis, Candied Peanuts

Got Nelson? IPA

Course Five

German Chocolate Cake

Rich Chocolate Cake, Coconut, Brown Sugar Frosting

Cocomotive Coconut Porter

Truffles & Beer Pairing:

11/5 5:30 – $12 (plus tax) for 2×2 pairing featuring 2 handmade truffles using two of our beers, paired with that beer! You can come in anytime between 5:30 and 9 pm to get your pairing. Get your tickets here…https://www.eventbrite.com/e/truffles-and-beer-at-thorn-street-brewery-tickets-38546192700

Venissimo Cheese Pairing:

11/11 1 pm – $30 (plus tax) for a 5×5 pairing (with something extra too) and an afternoon chatting with Rob Graff from Venissimo and Eric O’Connor, Brew Master here at Thorn. Tickets available here…http://venissimocheese.vendecommerce.com/class-schedule/products/11-11-beer-cheese-sampling-thorn-street

TSB EVENTS – NO TICKET NEEDED

11/8 Beer Trivia with America’s Finest Trivia at 7 pm

11/9 IPA LOUNGE at 5:00 features 10 of our IPAs on tap in our back room making for a hoptastic evening!

SDBW EVENTS AROUND TOWN

beer week calendar

Don’t forget about all the events we are participating in around town! For a full list, check out our events calendar on our website.

We hope to see you for San Diego Beer Week! Please contact events@thorn.beer for any questions about our events.