A beer summit at the White House might be just what premium brewers needed to lift sales for the rest of the summer.
Sales for the $90 billion beer business are soft so far this summer — traditionally the time when most beer is sold. Analysts split the blame between the weak economy and rainier-than-normal weather in parts of the country.
Beer sales were flat for the four weeks ended July 11 and including the lead-up to July 4, according to Nielsen and JPMorgan. But President Obama's offer to unite Massachusetts police officer Sgt. James Crowley and Harvard professor Henry Louis Gates at the White House last week to reconcile an arrest and race issue put beer in the spotlight.
"Regardless of the beer picks, it's been great buzz for the beer industry," says Julian Green, MillerCoors spokesman. "It puts beer top of mind."
Anheuser-Busch was center stage at the meeting with Bud Light and MillerCoors with its Belgian-style Blue Moon brew. Sam Adams Light sam made it on the menu because of a letter to the White House from Rep. Richard Neal, D-Mass., who pushed to have American brews at the table.
"I started brewing Sam Adams in my kitchen 25 years ago," says Jim Koch, founder of Sam Adams, the only America-owned-and-brewed brand at the table. He was surprised at the groundswell of calls and letters to the U.S. Capitol from beer drinkers who wanted "to see Sam Adams served in the White House."
Bud Light was the top choice for President Obama. "There seems to be a recognition that beer is a product that people share with friends, and that brings people together," says Anheuser-Busch President Dave Peacock.
Obama's beer choice also seemed to put to rest the debate last year of whether A-B was still an American brand once it was bought by Belgian brewer InBev. A-B continues to operate in St. Louis and brew in the U.S. MillerCoors is also owned by a foreign company: SABMiller.
But each of the brands benefited from the status of beer as the alcoholic beverage of choice in the Obama administration.
In 2005 wine surpassed beer as the top alcoholic drink in an annual Gallup survey of adults' drink preferences. But last summer beer regained its spot as the most preferred alcoholic drink.
With the recession, people began to switch even more to beer from wine and spirits but to lower-priced varieties. Bud Light sales, for instance, fell 1.9% for the four weeks ended July 11 compared with a 2.4% increase in the same period last year. Premium Miller Lite volume fell 7.8%, but volume for the cheaper Miller High Life grew 8.2%.
"It can't hurt to remind people that a lot of bonding happens drinking beer in the hot summer," says JPMorgan beverage analyst John Faucher.
But Green reminds: "This was born out of a very serious situation. Marketers should be very careful not to exploit this occasion for business gains."
ASK THE AD TEAM
Q: Who is the lady in the new Yaz birth control pill commercial? She resembles Cindy Crawford a bit. It is the commercial where she talks about previous Yaz commercials. Your help is appreciated. – Adam Aelker, Yuma, Ariz.
A:Based on the chatter on the Web about actress Laura Stone, many people consider her as hot as Cindy Crawford. Stone has appeared in several television shows including Without a Trace, Days of Our Lives and The Young and the Restless. Stone was hired for the dubious task of setting the record straight on Yaz ads by agency Y&R.
Commercials that aired in 2008 for the product said the pills could help clear up acne. The Food and Drug Administration considered the ads misleading and sent warning letters to Bayer. "We asked the company to work on a corrective TV ad that will reach the audience that saw the original ad, as Bayer did for Yaz," says FDA spokesman Pat El-Hinnawy.
Bayer is spending $20 million on the ads through the end of August. Bayer also received complaints from 26 attorneys general and faces a pending lawsuit because of deaths reportedly associated with taking Yaz. The drug is the best-selling oral contraceptive in the U.S., with sales of about $616 million in 2008, says health care tracker IMS Health.
"We have worked closely with the FDA, agreed on a course of action and are pleased to report that our new Yaz ads are now airing in markets around the country," says Rose Talarico, spokeswoman for Bayer HealthCare. "We believe that the new ads correct any misperceptions that might exist."