Beer Brawl V: You Only Go Around Twice

(For Part IV, click: http://billsbrainworks.com/beer-brawl-iv-gusto-rides-again/ )

In Part IV, new “Classic 60’s Formula” Schlitz hit the shelves in 2008 and was hailed as a return to form. But the beer market had changed radically since the old days.

A final, unforeseen fiasco delivered a brutal low blow to the Schlitz re-launch. Just as the new-old brand was getting off the ground, the economy collapsed.

Twenty-somethings began graduating college heavy on student debt and light on job prospects. They moved back home in record numbers. When they arrived, many found an newly out-of-work parent. Suddenly, two key segments of the beer-buying public, including the one targeted by new-old Schlitz, were forced to see beer as luxury rather than a staple. And those nostalgia-driven online ads for rebooted Schlitz didn’t seem like much fun anymore. To some, it felt like you were having your nose rubbed in the prosperity of a previous generation. Gusto was back. But the paycheck was gone.

None of that was Schlitz’s fault, of course. The lords of finance who sank the world economy operated at a level of avariciousness that made the cost-cutting schemes of Robert Uihlein Jr., look like penny-ante poker. As beer sales sank, even the most sober of marketing plans began to look tipsy. Keeping that Gusto going was going to be a lot tougher than anyone could have predicted.

The economic meltdown held an even nastier surprise for Schlitz’s old rival. International behemoth InBev pounced on Anheuser-Busch after realizing that August Busch III’s obsession with being number one in America had come at the expense of an effective global strategy. Budweiser’s greatest strength was its greatest weakness–a turn worthy of Greek Tragedy.

Anheuser-Busch was America’s biggest brewing company and America’s last major family-run brewery. Bud Light and Budweiser were America’s most popular beers. In better times, the hostile takeover of Anheuser-Busch by a foreign entity would have likely generated tremendous press and a huge public outcry. That outcry could have been harnessed like a team of Clydesdales and used to power the PR side of the company’s takeover defense. But in a year filled with astounding corporate collapses and astonishing job losses, Budweiser’s story got downsized, and the Busch family got little sympathy. The toppling of their brewing dynasty undoubtedly hurt the Busch’s pride, but the buyout of their stock made an extraordinarily rich family even richer. Other American families were losing their homes and struggling to scrape by on unemployment. They could hardly be expected to pity the former beer barons of Saint Louis.

Five years after its introduction, new-old Schlitz has expanded its territory, but does not appear to have spread as far and wide as its makers had hoped. The official Schlitz website seems to have lost its enthusiasm. The news page shows no updates since the fall of 2009, the calendar of events peters out a year later. The site link doesn’t match what seems to be the official Twitter feed. The retail locater fails to provide business names or street addresses. As “Classic 60’s Formula” Schlitz struggles, Yuengling has become the cool American lager of the moment, siphoning off the buzz that Schlitz had hoped to call its own.

Perhaps it’s simply too late for consumers to care. Economic upheaval and changing tastes have been sucker punching the big box beer brands for years. After decades as the undisputed champ, even the seemingly invincible King of Beers was forced to abdicate. Most Americans don’t realize it, but Budweiser lost the title of America’s top selling beer to its upstart younger brother, Bud Light, over ten years ago. What’s more, Budweiser has suffered an astonishing 30% slide in sales since its purchase by InBev. The former champ currently finds itself grappling with Coors Light in a no-holds-barred cage match for the title of beer number two. Talk about a royal pain.

Budweiser’s graphics and packaging got a makeover recently, complete with a nifty new bowtie. A-B InBev has also introduced Bud Light Platinum and Budweiser Black Crown, two higher alcohol content lagers aimed at the college and craft brew crowds. Whether or not these line extensions will help alleviate a crippling case of flagship fatigue remains to be seen.

Meanwhile, my calls to Schlitz have gone unreturned. Still, if I can find a bottle of their new-old formula, I’ll gladly give it a go. The folks who brew Schlitz have tried to do the right thing, and for that alone, the brand deserves a shot. Who knows? Decades after it disappeared, now may be the time to give Gusto another chance.

(This concludes the five-part “Beer Brawl” series. To begin the series, click here: http://billsbrainworks.com/beer-wars-the-birth-of-the-brands/).