Giving Away Beer to Attract Younger Customers: Crisis in the Making or Desperate Attempt to Counter a Shrinking Market?

There was an interesting piece on Marketplace that aired 23 September on National Public Radio. The lead paragraph from the story reads: 

As part of a new marketing campaign next week, Budweiser will hand out free brewskis in bars and restaurants nationwide. The company is trying to attract younger drinkers.

(Read/listen to the entire story at http://bit.ly/cuyJ60)


Some may find the story indicative of a good business practice; others may find it provocative and be concerned, as someone invested in the prevention of high-risk and dangerous drinking, and see this as one more attempt to make a profit irrespective of personal costs. 


Although sensitive to the concerns of my preventionist colleagues, I am intrigued by the details implied between the lines in this story. If Anheuser-Busch (A-B) is concerned by a 10% dip in sales last year while at the same time there was a 7% increase in the sale of microbrews, this may not necessarily be a bad thing for folks in our line of work. As drinkers abandon A-B for microbrews, “drinking up” so to speak, they are likely spending more per beer. We know that as the price per drink increases we see a decrease in sales (see http://bit.ly/bfOvuM, specifically page 2, #2). If folks are willing to pay more for a beer that tastes better, they may be drinking fewer of them during an outing. Put another way, drinking for taste may result in a much different drinking experience with different behavioral outcomes than drinking for effect.

I noticed a somewhat similar effect over the years with college students I was interviewing following policy violations. Almost always the students I was seeing were drinking at the “$5-all-you-can-drink” solo-cup keg parties rather than the $X per “mug” microbrew at the hip nightspot on the occasion when they were “written up.” The drinker with the mentality that suggests, “If I can drink all night for $5 and have 10, that is $.50/beer. Damn! That’s a deal” not only drinks differently than the “I enjoy 3 or 4 at $6 each because they taste good” drinker, but pound for pound, the former likely has a higher BAL than the later at the end of the night. True, I was seeing predominately underage first- and second-year students and the article cited speaks of 20-something, of age drinkers in trendy night spots, but even so, the interesting and provocative question this article sparks for me is: IF 20-somethings are "drinking up,” and IF the negative correlation between the price per drink and number of drinks consumed is to be believed, THEN is this a story that is actually “good news” for folks interested in reducing high-risk and dangerous drinking?

Of course the real issue of concern—and the one that is of primacy here—is the way A-B is reacting to the news that sales are down in hopes of boosting product sales, but I tend to agree with my neighbor from Philly who posted this reaction to A-B's marketing plan:

The beer drinker that doesn't care about quality is drinking Bud/Miller/Coors Light. The beer drinker who is drinking an IPA at this "trendy bar" will laugh at the A-B representative who offers a free Budweiser. (I would...)

By Brian N
From Philly, PA, 09/23/2010


What do you think?
Dr. Robert