Budweiser Loses #2 Spot in American Beer Market to Coors Light

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Posted Jan 18, 2012
Susan Gunelius

Since 1993, Budweiser held the top two brands in U.S. beer market, but 2011 changed things. For the first time in nearly 20 years, Budweiser lost the #2 spot to Coors Light. Experts are pointing at Budweiser's misdirected efforts at attracting a younger audience as a key reason for Budweiser's sinking sales. Even a recent Budweiser rebranding initiative that included a launch of new packaging for Budweiser is unlikely to help re-energize sales.

budweiser coors light

While Budweiser has focused on growing the brand globally, the Coors Light marketing team has focused on communicating a consistent brand message that positioned the brand as the "refreshing" choice. In support of that brand message, cold-activated packaging added an innovative, tangible experience. So far, the Coors Light messaging seems to be working while the Budweiser rebranding efforts are floundering. Fortunately for Anheuser-Busch, Bud Light still holds the #1 spot as the most popular beer (in terms of sales) in the United States.

A Similar Fate for Pepsi and Burger King

This isn't the first time a long-time industry leader has been dethroned. In 2010, Diet Coke ousted Pepsi from the #2 spot in the United States carbonated soft drink market marking an historic moment in the decades old battle between the top two soda brands -- Coke and Pepsi. In 2010, the Coca-Cola company held the top two spots in the U.S. carbonated soft drink market for the first time.

It was a shift in market share dominance that had been coming for years, and Pepsi spokespeople seemed fairly unaffected by the change back in early 2011 when the news broke to the media. At the time, the Pepsi-Cola company had diversified its business so carbonated soft drinks were just a small part of the whole. From chips and drinks to cereals and more, Pepsi-Cola has revenue streams from a variety of markets unlike Coca-Cola which focuses its efforts on beverages.

More recently, Wendy's stole the #2 spot in the fast food market from Burger King. Remember the days of the McDonald's and Burger King rivalry? It seems like ancient history when commercials aired hyping Burger King's flame-broiled hamburgers as superior to McDonald's fried hamburgers. Instead, a creepy king character intended to appeal to a young male audience took center stage in Burger King ads over the past several years. During that time, Wendy's was refocusing its efforts on its target market of older customers and differentiating its brand from fast food restaurants like McDonald's and Burger King with revamped menu items. Score -- 1 point brand focus, 0 points creepy king.

It could be argued that Budweiser, Pepsi, and Burger King all suffered from the same  branding error -- a lack of strategic focus. Perhaps each of these brands will be satisfied in the #3 position. For Pepsi-Cola, the Pepsi brand hasn't been its biggest moneymaker for years. For example, both Gatorade and Tropicana bring in more revenue for the company. Similarly, Anheuser-Busch seems more interested in global expansion of the Budweiser brand than domestic sales these days hoping that's where future revenue opportunities will be found. Only time will tell if these are the right decisions for each company and brand. In the meantime, Coors Light, Diet Coke, and Wendy's are reaping the rewards.

Images: Grace Smith

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