It's a big milestone for St. Louis' Anheuser-Busch: Michelob Ultra is now the number one beer in America by volume. But while A-B is outperforming its rivals, the overall alcohol beverage market is facing significant headwinds.
Harry Schuhmacher, publisher of Beer Business Daily, was quick to add a qualifier to the ranking. While Ultra sells the most suds, its biggest competitor still brings in more money.
"In value, meaning dollars, maybe Modelo Especial is still the number one beer only because it's more expensive than Michelob Ultra," he explains.
The rise of Ultra is the result of an intentional pivot by Anheuser-Busch, which shifted massive resources to the brand in the wake of Bud Light's struggles.
"They have shifted a ton of investment dollars and marketing behind Michelob Ultra," Schuhmacher tells KMOX. He calls it a "no-brainer" business move because "it's also a more expensive beer than Bud Light and Budweiser, so they have a better margin on that brand. It makes sense for them to shift dollars from Bud Light to Michelob Ultra."
This strategy has proven successful, with Anheuser-Busch growing its share of the market even as the entire industry shrinks.
"They're one of the only national brewers that are growing market share. And that can't be understated in a tough, tough beer market," he says. "Nobody's drinking beer right now. Beer's down 5%, wine's down 5%. Everybody's down 5%. For them to be growing share is a pretty good achievement, honestly."
A-B is getting that growth mostly from its big competitors, Miller Lite and Coors Light, and from craft beer, which is struggling.
Schuhmacher says the company’s powerful distribution network is its "superpower," allowing it to get any product onto shelves nationwide within 30 days — something no rival can match. The company has leveraged this to push into spirits with fast-growing canned cocktails like Cutwater and Nütrl, successfully taking a piece of the spirits market.
Schuhmacher says the rebound from the Bud Light controversy has been better than he could have expected. He gives credit to the leadership of Brendan Whitworth, CEO of Anheuser-Busch's North America territory.
"You know what? He's surprised me," Schuhmacher admits. "They've done the right things, they've invested the right amount in properties, and they've kind of kicked ass. And that has surprised me, for sure."