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Less Thrilling

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"You don't play beer ads in the morning and you don't play beer ads on the news, so they're going against all kinds of conventions," said newsletter publisher Shumaker. "When you do things against convention, you own it. It puts your thinking on edge."

Miller executives believe that they marketed their way into this corner and they can market their way out of it. Tom Long, the chief marketing officer for Miller, offers as proof the fact that some beers in the industry are doing well -- such as imports and craft beers -- while others are not. Those that are selling well, he said, have a story, an image, a resonance with consumers.

"It really comes down, just like it does in any other business, to differentiating the brands and giving them distinct personalities," he said. It's also important to focus on where brands came from and how they're made "so they have the personal authenticity that people are searching for now," Long said.

What's not working for the industry now is the typical young-stupid-male advertising approach, Long said. There is still a core market for beer that resides with young men, but even those young men may see themselves differently from the way they used to. The industry needs a different definition, he says.

"The problem in American beer is sameness -- one big mass of couch-potato jokes thrown at American males in a way that was okay 10 years ago," Long said. Now, though, "adoption leaders and style leaders aren't seeing themselves in that imagery."

Just Add Ginseng

Long's constant harping about football and couch-potato messages is aimed squarely not only at his own company, but at his main competitor, Anheuser-Busch. As the beer behemoth, with greater than 50 percent market share, Anheuser is a powerful force.

The only problem, analysts say, is the industry leader hasn't really been leading much lately, except with price cuts.

"It does sound like they don't even have an understanding of the marketplace," Herzog said. "How did they even allow this to happen?"

Lachky of Anheuser is open to taking some blame. "I don't think beer companies have done a very good job in the last five years of protecting the on-premise environment -- the restaurants, the bars, the taverns," he said. "That's where the hard liquor people have come in with a very aggressive form of marketing."

Yet Lachky's salvo isn't to fight marketing with marketing -- it's innovation. The problem, he says, is that people don't think of beer as appropriate for as many occasions as they could, so Anheuser is going to give them the products that do seem appropriate.

The company has unveiled a dizzying array of new brands and new packaging in the past two years, most recently a product called Tilt, which is a beer that contains ginseng and caffeine. It has made large, eye-catching aluminum bottles and partnered with Bacardi to make Bacardi Silver, a malt-based beverage that is sort of a hip alternative to a wine cooler.

"They're transitioning from being Budweiser to being a malt-based alcohol producer," said Schuhmacher of Beer Business Daily. "They have tremendous capabilities, tremendous manufacturing capabilities that people may not realize."


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