As Big Beer’s kingdom shrinks, its two champions are jousting over an inane flashpoint: corn syrup.
Miller made a Budweiser once.
In fact, many U.S. breweries, including fellow Milwaukeean Schlitz, tried to cash in on Anheuser-Busch’s imitation of a centuries-old Bohemian lager from the Czech town of Ceske Budejovice – or Budweis, in German – in the same way that many made pilsners inspired by Czech brewers in Pilsen.
But Miller was the only stateside brewer to persist after warnings sent out by Adolphus Busch’s attorney in 1893. Five years later, a federal judge ordered Miller to stop using the name, signaling to the victorious Busch, essentially: This Bud’s for you.
More than 125 years later, a new chapter is being added to the contentious history between these brewing giants, beginning with a Super Bowl LIII ad that informed 100 million Americans that Miller Lite and its corporate sibling Coors Light are brewed using corn syrup, while Bud Light is not.
Bud Light has since doubled down with more attack-minded TV spots, marketing materials and highway billboards – including several in Milwaukee, deep behind enemy lines. MillerCoors has fired back with ads of its own, and in March sued Anheuser-Busch in a Wisconsin federal court, claiming false and misleading advertising.
Whoever prevails this round, the Bud Light ads suggest a bold game plan from the market leader, coming as Americans increasingly prefer craft beers, wine and spirits. Anheuser-Busch has gone negative within its own diminishing category, leaving industry watchers to wonder: Is Big Beer such a hard sell, is it so desperate, that its best play is to join in on the finger-pointing?
And, if so, what does that mean for the legacy of Milwaukee, with an abiding identity that – perhaps more than any other U.S. city – has been steeped in brand-name beer?
PETE MARINO hadn’t made it through security at Atlanta’s Mercedes-Benz Stadium when he saw digital displays touting Bud Light’s ingredient “transparency”: Just water, barley, rice and hops.
As MillerCoors’ chief communications officer, Marino was among many in the beer industry who had guessed at Bud Light’s Super Bowl strategy since Anheuser-Busch had conspicuously declined to give distributors a sneak peek at its TV ads. Marino had figured that meant an attack on Miller Lite and Coors Light, which MillerCoors tried to pre-empt by amping up its messaging (Miller Lite “has more taste,” Coors Light is the “world’s most refreshing beer”).
A few hours before the game, Marino saw a photo of a new Bud Light sales display that compared ingredients in the three beers. He texted his boss, CEO Gavin Hattersley. “I said, ‘If they attack us on corn syrup, they are going to really piss off the corn farmers,’” Marino recalls. “And then that’s exactly what they did.”
His phone lit up as soon as Bud Light’s first-quarter ad aired, and he left the stadium after halftime to work from his hotel room. “We’ve been running ever since,” he told Milwaukee Magazine in late March.
In case you missed the Super Bowl or the 1,000-plus times that minute-long ad and a related 30-second spot aired over the following month and a half: A barrel of corn syrup is mistakenly delivered to the Bud Light Castle, where the Bud Light King sets about a perilous search for the barrel’s rightful owner at the Miller Lite and Coors Light castles.
Many viewers no doubt shrugged off the revelation that well-known beers are made with corn syrup. But others took to Google, where the search engine’s data show out-of-the-ether interest in “beers with corn syrup,” “does miller lite have corn syrup,” and “why is corn syrup bad in beer.”
It’s not “bad in beer.” At least, not any worse than other sugars or carbohydrates that brewers feed their yeast to convert to alcohol. Miller Lite and Coors Light use corn syrup, just as Bud Light uses rice syrup, but the bottles and cans do not contain corn syrup. For that matter, corn syrup is not the same as high-fructose corn syrup, a black-sheep cousin that became the prevailing sweetener in soft drinks as obesity rose in the United States.
But inanity might be on-brand for Bud Light. The last thing anybody wants while drinking one is a lecture about fermentation or food science, and Miller Lite and Coors Light do use corn syrup. The ads don’t say that’s good or bad. The whole of the argument: corn syrup, corn syrup, corn syrup.
A Bud Light executive told Beer Business Daily (in comments soon pounced on by MillerCoors’ attorneys as evidence of intent to mislead) that focus groups showed consumers wish to avoid high-fructose corn syrup, and that they tend not to know the difference between high-fructose corn syrup and plain-old corn syrup.
Ironically, Anheuser-Busch itself uses corn syrup in Busch, Busch Light, Natural Light and Bud Ice, and even adds high-fructose corn syrup to some of its sweet concoctions, like all 18 varieties of its popular Ritas fizzy drinks (which were spun off of the Bud Light brand).
The attack ads arrived at a sensitive time: Anheuser-Busch and MillerCoors, along with major importers Constellation and Heineken, were hashing out a co-op campaign that would promote beer, generally, in the vein of “Got Milk?” The Wall Street Journal reported that the brewers had planned to hire a marketing firm at a March meeting in Chicago.
As Marino predicted, corn growers were incensed by the implication that their product is detrimental to Americans’ health, and Kevin Ross, first vice president of the National Corn Growers Association, posted a video in which he dumped out cans of Bud Light over a bathroom sink.
MillerCoors then took out a full-page ad in The New York Times, clarifying corn syrup’s role in brewing and thanking Bud Light for the chance to “remind beer drinkers that Miller Lite has more taste than Bud Light with fewer calories and half the carbs.”
During March Madness, a new series of meta Miller Lite spots brought viewers “on set” of the shooting of Bud Light kingdom ads, with actors and crew members choosing Miller Lite to relax with between scenes. For a weekend in March, bars in five cities were outfitted with Coors Light tap handles that glowed whenever Bud Light disparaged Coors Light on social media or TV, granting patrons a free round.
And then came the lawsuit demanding an end to Bud Light’s campaign (which MillerCoors estimated to have cost upward of $24 million by mid-March, including $13 million spent on the Super Bowl alone) and damages for MillerCoors.
As for that unified campaign, the one that would raise all Big Beer boats? The March meetup was postponed, and as of mid-April, Miller didn’t plan to attend the next one.
Says Marino: “We just don’t think when the dominant industry leader is attacking the business, it makes any sense to continue those conversations at the moment.”
Source: Beer Marketer’s Insights
Source: Distilled Spirits Council
But it’s also 34.5 million barrels less than MillerCoors and Anheuser-Busch made a decade earlier. That’s 11.4 billion 12-ounce servings a year, or almost 50 beers per drinking-age American.
“It’s an amazing amount of volume that they’ve lost,” says Bart Watson, the chief economist for the Brewers Association, a trade group for craft brewers.
Longer-term, Milwaukee has gone from home to three of the nation’s top four brewers in 1980 – Miller, Pabst and Schlitz – to partial home of just one. Schlitz sold in 1982. Pabst, in 1996. Today, Milwaukee’s longtime Miller employees report to MillerCoors executives at a leased Chicago office. Two large waves have shaped the industry since Milwaukee’s heyday as the “beer capital of the world” in the early 20th century.
The first was fed by the 1973 introduction of Miller Lite, the country’s first mainstream light beer, and its seminal “Great Taste, Less Filling” ad campaign. Coors Light was born in 1978, and Bud Light in 1982. In 2018, those beers ranked as Nos. 3, 2 and 1, respectively, among U.S. best-sellers.
Then, starting in the mid-1990s, Americans began to gravitate toward the differentiated styles and full flavors of pricier beers, including imports and craft brews.
Light beers still represent the biggest slice of the industry pie, but the volume of Bud Light and Miller Lite produced each year has fallen more than a quarter in the last decade.
Mexican beers including Constellation’s Corona and Modelo have come on strong during that period. And craft’s remarkable boom is such that by 2017, there were twice as many breweries in the state of Wisconsin alone (160) as there were in the entire nation 35 years ago.
When Ben Barbera, a curator for the Milwaukee County Historical Society, was creating a brewing exhibit in 2015, he had to stop tracking new openings because “every week, I had to update what I was writing about new breweries,” he says. Today’s Milwaukee scene more closely resembles its early roots, he says, when there were 35 to 40 smaller neighborhood operations.
Still, Americans are drinking less beer, period. Overall consumption has declined in each of the last three years, and Vivien Azer, an analyst for the Wall Street financial firm Cowen, says 2019 is shaping up to be another year in which younger Americans trend toward other categories of drinks – including hard seltzers, ciders and spirits. “The beer category’s been challenged for quite some time,” Azer says. “Consumers have been moving away from beer and [especially] into distilled spirits.”
Notes Watson: “Spirits didn’t use to advertise on TV or in many places, and now they do, so that’s certainly been one driver of some of those shifts in cultural preferences. But some of it is just different generations drink a little bit differently.”
Anheuser-Busch and MillerCoors could at least boast that they increased profits after last decade’s mergers, buoyed by cost savings and price increases. But MillerCoors’ annual income declined in 2018, even after it slashed its administration and marketing budget by $261 million over three years, according to Beer Marketer’s Insights publisher Benj Steinman. “Now, they’re not able to increase the profits so much, because they’ve cut what can be cut,” he says.
Executives at Molson Coors (MillerCoors’ owner since 2016) told investors this year that they plan to trim costs by another $200 million in 2019 and $450 million over the following three years. They didn’t mention closures or layoffs, but earnings calls and annual reports point to “more rigorous” zero-based budgeting and “brewery optimization.”
In 2015, MillerCoors shuttered a North Carolina plant that employed 520, and last fall, it announced it would eliminate 350 salaried positions. Marino said there are just over 1,300 MillerCoors employees in Milwaukee today, most at Milwaukee’s storied Miller Valley Brewery. That’s down from the 1,400 cited in 2018 media reports and 1,500 in 2016.
Such generational trends have been bucked before, Azer says – noting whiskey’s recent comeback, fueled in part by new products.
And Big Beer has some success stories, foremost among them Anheuser-Busch’s Michelob Ultra, which increased production by more than a million barrels in 2018 alone, and which MillerCoors aims to emulate with its low-carb Saint Archer Gold. Both brewers have been acquiring craft brands – the proliferation of Terrapin Beer offerings at Summerfest, Miller Park and elsewhere in Milwaukee is a function of its MillerCoors ownership – and also jumping headlong into non-beer categories with hard seltzers, kombuchas, hard teas, wine spritzers and canned cocktails.
But the fates of the two brewers are still intimately linked to sales of their competing light beers.
Says Steinman: “With such a big percentage of their business declining, you can have some of these successful innovations, but they’re not big enough to change the algorithm of your business.”
Hence, all this fuss about corn syrup.
DISPUTES INVOLVING Milwaukee’s brewers are nothing new.
In 1900 – shortly after Miller lost its Budweiser – Pabst, Schlitz and Blatz obtained court orders to prevent New York brewers from slapping a label on their bottles and calling it “Milwaukee beer.” Even within Milwaukee, there was much ado about which brewer had the best claim to the city’s reputation, with Schlitz’s “The beer that made Milwaukee famous” the most enduring.
“Milwaukee breweries have been very protective of their image,” Barbera says.
The last spat rivaling the corn syrup wars came more than 15 years ago, when Miller Lite reversed a 12-year sales slide by stressing that it had fewer carbs than Bud Light.
Mike Kallenberger, founder of Hartland-based Tropos Brand Consulting, worked in marketing for Miller at the time and was tasked to imagine all the ways that Anheuser-Busch might respond.
It was very unlikely, Kallenberger told his boss, that Anheuser-Busch would directly address Miller Lite. Accepted marketing wisdom holds that when the big guy punches down at the littler guy, he affords the latter credibility. Anheuser-Busch would not counterattack. “I was dead wrong about that,” Kallenberger says.
Bud Light’s marketing team initially answered in a fairly roundabout way, instructing consumers to choose their light beers on taste. But when Miller Lite then claimed to have “more taste,” too, and Miller nominated itself the “President of Beers” in opposition to Bud’s King, Anheuser-Busch sniped back that Miller Lite was the “Queen of Carbs” (insinuating that it was unmanly to worry about carbs).
It was on. Miller Lite released commercials in which football referees would appear out of nowhere to “flag” consumers who were attempting to drink Bud Light. Bud Light countered cleverly with commercials that showed Miller Lite’s referees were snatching up all these Bud Lights so they could drink them themselves.
“It was all very funny, but by that point, there really was a lot of evidence that beer drinkers were just getting tired of all these attacks,” says Kallenberger. “My preference is always to focus more on our message about ourselves, as opposed to attacking the other guy.”
When it was all said and done, Kallenberger felt Miller had lost some of the momentum it gained from the low-carbs message, and Anheuser-Busch lowered its prices, pressuring competitors to do the same. Kallenberger says that 2005 price reset cost the industry an estimated $1 billion. “It was not a happy ending for anyone” in the industry, he says.
But the early returns of the latest showdown have been promising for Miller Lite. According to Nielsen data cited on MillerCoors “Behind the Beer” blog, Miller Lite was up 0.4 percent in 2019 sales volume through late April, while Bud Light’s sales dived 6.2 percent.
Seizing that momentum, new Miller Lite ads have begun to take on Michelob Ultra (“More taste is worth one more calorie”) and white wine (“Fewer calories and carbs”).
“Competitive messaging works,” Anup Shah, vice president of the Miller brands, told the blog authors.
Consumers, not accustomed to seeing household institutions directly disparage one another, often cheer the spectacle of such brand wars. It makes for good sport. When Milwaukee resident and Miller devotee Aaron Schroeder saw Bud Light’s corn syrup ad during the Super Bowl, “I was hoping that it was going to be like a battle, where we’d start firing back,” he says. Miller Lite’s Bud kingdom parodies were “awesome,” he says.
To Gene Del Vecchio, a marketing professor at the University of Southern California, it still makes sense for Big Beer to coalesce around a “Got Milk”-style unified branding effort, given that brewers are competing for a shrinking share of the alcohol market. But MillerCoors may have to accept that the larger Anheuser-Busch can better afford to strike within the beer market at the same time. Animosity shouldn’t drive MillerCoors from the table, he says.
“Anheuser-Busch is trying to have their beer and drink it, too,” Del Vecchio says. “And while it can be painful for the other manufacturers to be attacked, long term, they have to think of their own well-being.”
MILLER LITE predominates at an early-season Brewers tailgate outside Miller Park.
Asked about the corn syrup ads, Eduardo Jimenez rolls up his sleeve to reveal a tattoo of the Miller Lite logo at his elbow. “It’s bull,” he says.
“Nobody in my family is going to change,” says C.J. Reiels. “We’re Miller Lite drinkers.”
“It didn’t change my opinion of any beer,” says Austin Pegg.
That’s the prevailing sentiment among revelers on an April afternoon – though few know that their cans of Miller Lite and Coors Light do not actually contain corn syrup, and many groups have also brought cases of hard seltzer.
Chicago headquarters aside, Milwaukee still feels like the heart of MillerCoors territory. Marino says MillerCoors has invested “several hundreds of millions” in its Milwaukee operations since 2008, including a reported $50 million expansion of the 10th Street Brewery loudly emblazoned with Leinenkugel’s branding.
And Kallenberger says that while the Milwaukee-based MillerCoors employees he knows from his three decades with the brewer are “realistic” about the future of the industry, they are “an optimistic bunch by nature.”
“I don’t think they think that this whole thing is going to turn around and young adults are going to start flocking back to Big Beer, but at the same time, I feel like they’re fighters, so they’re going to keep on fighting,” he says.
Casey Foltz, owner of Puddler’s Hall in Bay View, says MillerCoors employees stopped in to express their gratitude after Foltz – riled by a local news story about Bud Light’s billboards – poured two cases of Budweiser products into his men’s room urinal and swore off Anheuser-Busch, attracting media coverage of his own. “I don’t plan to bring them back,” he says.
But even in Milwaukee, where “Miller Time” was born, the #corntroversy has been received by many as a frivolous episode in the ongoing saga of Anheuser-Busch versus MillerCoors.
Racine resident Morgan Anderson is the daughter of an Anheuser-Busch distributor and a lifelong Bud Light drinker who jokes that she shares a “split household” with her Miller Lite-drinking husband.
When they saw the ad, she says, “We both kind of looked at each other.”
Their verdict? “It seemed kind of silly,” she says. “I think they’re bringing up things that are kind of irrelevant to the conversation. Beer drinkers are beer drinkers; I don’t think they necessarily care as much what’s in it.”