Budweiser & Clamato

In January 2008, Anheuser-Busch introduced Budweiser & Clamato nationwide - a prepackaged, Mexican-style beer cocktail. Less than two months prior in November 2007, I first tried an authentic michelada. I had been dating an exchange student from Mexico who insisted we have one. The name seems to be an abbreviation of "mi chela helada," or my frosty beer. I had never heard of it but was open to the idea. Although the restaurant was empty, we waited ten full minutes after she ordered our drinks. This particular restaurant didn't have a full time bartender, so the server took his time to make our beers right. Then he set two goblets of an iced red liquid on our table - rim salted, garnished with a squeezed lime-half and a straw. It was spicy. A Bloody Mary with beer instead of vodka. I liked it. In a Google search that night, I discovered there was Worcestershire in it. Over the next few weeks, I started to make my own micheladas at home. I used Budweiser, Bloody Mary mix, hot sauce, A1, Worcestershire, pepper, salt, lime, and anything else I would throw into a Bloody Mary. I used Blood Mary mix because I don't keep real salsa around, which is the traditional ingredient to give it the tomato flavor.

In terms of size, Hispanics / Latinos have recently surpassed African-Americans as the largest minority in America. According to the Pew Research Center, the Latino population is expected to make up 29% of the general population by 2050. Spanish is the first language in hundreds of neighborhoods in states like California, Arizona, Texas, Illinois, Florida, and New York. Having worked in the beer business in Latino neighborhoods around Los Angeles and Denver, I saw Clamato coolers in every liquor store, strategically placed near the counter. 60% of the Clamato purchased is used as a mixer. So it seems natural that the nation's leading brewer, in an attempt to reach the nation's leading growth demographic, teamed up with the leading producer of a key ingredient for that demographic's consumer tastes.

I was surprised to see Anheuser-Busch's new offering in a 24 oz. can at the local QT in my dad’s neighborhood. My new drink had become a corporate macrobrew. One half of the can is in English, one half Spanish. Budweiser & Clamato, as one would guess, is a mixture of Budweiser and Clamato - Cadbury Schweppes’ trademarked tomato and clam juice beverage. I couldn't believe Anheuser-Busch, a company where I worked for two years, would come out with such a product with the Budweiser name on it. Anheuser-Busch is one of the more conservative, risk-averse companies in the country. Any variations on the core brands’ image are done very slowly, probably for good reason. Although the Latino segment in the US makes up a significant portion of the beer business, it seems that AB has kept the Latino advertising messages in strictly Latino neighborhoods. The company may be trying to straddle a fence between appealing to Latino consumers and maintaining a true American brand image to the typical American beer drinkers. Needless to say, illegal immigration from Mexico is one of the more controversial political topics right now. So rolling out a Mexican-style Budweiser brand with the Spanish translation seems riskier than what we would expect from AB. High Ridge, Missouri, the city where I found Budweiser & Clamato, has a Latino population of only 1.2%. The income per capita is $23,568 (compared to a national average of $36,276). High Ridge is an almost all white, blue-collar town with Budweiser & Clamato in every store I have been in. When Anheuser-Busch goes to market, they go to market.

How will the michelada sell in the general market? I like it, but almost every person I have sampled with one has disliked it, and many have literally cursed it. In this situation, the strong Anheuser-Busch distribution network can be a double-edged sword. Having worked in the ground floor of this network, I have intimate knowledge of how a brand is introduced. First, at every wholesaler in every city in America, there will be a company-wide sales meeting to present the new product and detail its qualities. The various point-of-sale (POS) will be displayed. Samples will be given out. Incentives and sales contests will be announced. And, of course, the overall corporate strategy of the brand will be explained. The sales force will understand which competitor they are targeting and why. Over the next two months, the soldiers in the sales trenches will secure product placements in as many retailers as possible. The neons, mirrors, banners, cooler stickers, table tents, and coasters will flood the market (table tents, coasters, and on-premise POS won’t apply to brands like Budweiser & Clamato). The brand will be everywhere almost overnight. In some cases, it will take the shelf-space of slow-selling competitor brands. Otherwise, the sales rep will have to sacrifice his own brands’ space to make room for the new product. There isn't really any strategy in which stores to target when it comes to new brands. The sales rep needs to boost his numbers for the introduction as high as possible so the new brand is everywhere almost overnight.

The double-edged sword of this strong push comes into play when a brand has potential but needs more time than average to incubate and build a following. Tequiza is the example that readily comes to mind. Introduced in 1999, Tequiza hoped to capitalize on the Latinization of tastes in America. Its agave and lime flavors made for a sweeter beer. However, the brand did not sell as well as hoped. Tequiza is still available and profitable, but it is not a major moneymaker or even a household name. What happens in this situation? After weeks of a stagnant slot on the beer shelf, each and every single liquor store manager independently decides that Tequiza doesn’t sell and kicks it out of the store forever. Soon, Tequiza is hard to find. More importantly, each and every single sales rep loses all confidence in the brand and stops selling it. After 6 – 8 months, Tequiza doesn’t stand a chance of becoming a major brand. The brand is finished. Fast forward to 2007: SAB Miller introduced Miller Chill. Miller Chill is selling well and ruffling feathers inside AB, rightfully so. Because Miller Chill is the same beer as Tequiza! I have tasted both and I contend that I would not be able to discern the difference in a blind taste test. Although Tequiza lists its unique ingredients to be blue agave nectar and lime while Miller Chill uses lime and salt, the difference in taste is negligible. The differences in key success factors are in branding and, more importantly, timing. While AB tried to create a more authentic brand with the name ‘Tequiza’ (an abbreviation of ‘tequila’ and ‘cerveza’), SABMiller decided to pursue a hip image with the name, Miller Chill. However, I don’t believe that branding was as crucial to the success of these beers as was timing. 1999 may have been too early to introduce this style of beer. While it is good to be on the cutting edge of consumer preferences, companies like AB need to be able to go to market because that is the only way they go to market at all. Eight extra years of growing Latino influence on American tastes may have been the difference between a marginal product and a successful one.

I wonder if 2008 is too early for Budweiser & Clamato. I feel like I should say something about the presence of clam broth in a beer affecting the sales performance, but I doubt it’s important. One liquor storeowner in St. Louis city told me the brew is selling well. We will wait and see whether the general market is ripe enough to support the mass marketing of micheladas.