More Sweet Than Bitter, Bitter Than Sweet

Last Tuesday the Wall Street Journal had a front page article on how, after years of trying to make Budweiser less bitter, Anheuser-Busch is putting a little more hop in their flagship brand (subscription required):

For decades, Anheuser's aim was to develop a beer that would sell across America, one inoffensive enough to appeal to the nation's varied palate.

Mission accomplished.

Now, that goal is out of step with a shift in consumers' tastes. From coffee to fashion to media, niche products are rising, especially ones that consumers can customize, and the great mass brands of the postwar period are under attack.

Imported brews and smaller so-called "craft" beers with stronger flavors are more readily available and are selling fast, as are wines and spirits.

Moreover, for all its devotion to consistency, Anheuser concedes Budweiser has changed over the years. It quietly tinkered with its formula to make the beer less bitter and pungent, say several former brewmasters, a byproduct of the company's desire to create a beer for the Everyman.

And they were not alone:

From 1950 to 2004, the amount of malt used to brew a barrel of beer in the U.S. declined by nearly 27%, and the amount of hops in a barrel of beer declined by more than half, according to Brewers Almanac. Part of that decrease is due to improvements in how brewers extract flavor from hops. Nonetheless, beer's taste became steadily lighter. (Flowers of the common hop plant, Humulus lupulus, are used as a flavoring and stability agent in beer, helping create its characteristic bitter taste and aroma.)

The beer industry measures bitterness using a scale called International Bitterness Units. The higher number of IBU's, the greater the bitterness. Over the past twenty years the IBU's of most American-style lagers has dramatically declined, from roughly 15-20 IBU's to fewer than 10 today, according to the Siebel Institute, a Chicago laboratory and brewing school that tests beer.

"The North American palate has become lighter and lighter," agrees Graham Stewart, director of the International Centre for Brewing and Distilling at Heriot-Watt University in Edinburgh, Scotland. Mr. Stewart used to brew beer under license for Anheuser when he worked as technical director for Labatt Brewing Co., now part of InBev SA.

Following this approach, Anheuser-Busch grew to control half the market for beer in the U.S. and its brands have dominated the beer industry for decades. It owns 50% of Corona brewer Grupo Modelo and 27% of Tsingtao, one of China's top brewers. As it put regional breweries like Rheingold and Schlitz out of business, Anheuser's flavors came to dominate beer drinkers' palates. Bud Light is now the best-selling beer in the world.

One key to Budweiser's popularity is that it produces no "palate fatigue" after several drinks. The bitterness in stronger beers tends to build up, causing a drinker to tire of the taste. Bud's appeal is what people in the industry call "drinkability." (In the U.K., it is called "sessionability," for how many beers one person will drink in a session.) Budweiser tests drinkability in "pub tests" in which the brewer rents a pub or a bar and invites people to drink free. Afterward, Anheuser drives the drinkers home.

That sounds like the kind of testing I think we can all support. No drunk left behind.

The talk of drinkability brings to mind Schaefer's old slogan, "The one to have when you're having more than one."

Bud's ever-increasing lightness worked for years. But lately, consumers have started cooling on mass brands in favor of smaller, often unknown rivals. The proliferation of new media gave consumers more information about niche products. Their tastes grew more sophisticated and aspirational, spurred by an increase in overseas travel.

At the same time, stores began using technology to improve their inventory systems. That made it easier to spot which products were selling well, letting retailers offer with precision an array of products more in tune with customers' new tastes.

As a result, rivals and some industry analysts blame Anheuser's recent lackluster financial performance on the very foundation of Budweiser dominance: its light, bubbly formula, which has been mocked for years by beer snobs and beer drinkers outside the U.S.

"I think you're seeing an increased consumer acceptance that bitter is a positive characteristic in beer," says Keith Lemke, vice president of the Siebel Institute.

Amen. Bitter is part of the taste palate and when you say a beer isn't bitter, you're saying it doesn't have taste.

Bud has now realized that the lightness of being can be unbearable and has acted accordingly:

Anheuser didn't talk publicly about it, but the brewer also recently made changes in its brewing process to correct for over-lightening. In August 2003, Mr. Busch met with hops growers in Oregon and Washington and told them that Anheuser was planning to increase the proportion of hops used in its beers, according to several people who were there.

Mr. Busch confirms the account, saying in a written statement: "I told the growers of our desire to use more hops in our brewing for the purpose of delivering more amplitude and hop flavor in Budweiser."

With Bud's hopping-up, their largest rival saw an opportunity to attack:

In early 2005, instead of the regular shift downward in bitterness it had come to expect, Miller says it found that Bud Light's bitterness had increased slightly. It had seen a similar shift in regular Bud two years earlier -- something that could be explained by the acknowledged increase in hop content.

Miller gathered a small group of top executives to work on a response. The project was named "Project Delta," referring to the letter in the Greek alphabet that denotes change in mathematics.

One Friday night in November, Miller started showing TV ads contending that the taste of Bud Light, the world's biggest beer brand, had "changed."

But at the end of the day, debating whether Bud or Miller has more taste is a bit like debating whether Pink or Neil Young is a more astute political commentator.

Many smaller brewers in the industry scoff at the idea there's any difference between the two beers. "I sit back and chuckle at them going after each other," says David Blossman, president of microbrewery Abita Brewing Co. in Abita Springs, La., which makes brands such as Purple Haze and Turbodog. "It's like comparing Bunny Bread to Wonder Bread."