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Michelob a 'Craft?'

Dec 10, 2007 - Advertising from Anheuser-Bush's Michelob closely mimics recent spots produced by Boston Beer Co.'s Sam Adams brand, featuring interviews with brewery personnel discussing the beer's craftsmanship as well as malt and hop selection.

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The ads, with the tagline "crafting a better beer" were produced by Michelob's new ad agency Euro RSCG of Chicago,

"Michelob has always been a connoisseur's beer, so it has a lot of credibility in that area," said Keith Levy, A-B's VP-brand management.

Michelob has long been positioned as A-B's trade-up option from flagship brew Budweiser and has been used by A-B in the past as a counter to imports during their various surges, particularly in the 1980s to counter the initial rise of Heineken and Corona.

But the specific targeting of craft-beer competitors is a departure for Michelob.

The shift of Michelob to a craft-fighter in part reflects A-B's burgeoning portfolio of imports, which can compete more directly in that category. It signed a 20-year agreement last year to import InBev's portfolio of brands such as Stella Artois, Bass Ale and Beck's. Separately, it cut similar import deals with brands such as Grolsch, Tiger and Budweiser Budvar.

But A-B executives admit candidly that their vast portfolio -- which has been bolstered by product introductions, myriad distribution agreements with craft brands and even a few bottled-water and liquor products -- has hurt their focus on flagship core brands.

A-B told Wall Street analysts last week that its wholesalers carry 147 brands on average, more than twice as many as they carried five years ago.

Budweiser and Bud Light both will see significant spending increases in 2008, executives said. While Bud Light will continue its long-running sophomoric humor campaign, Budweiser is shifting to a strategy of dubbing itself the "Great American Lager."


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