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The long tail of Bud
February 02, 2007
There's the Long Tail, and then there's the Strong Arm.
Over the last decade, Anheuser Busch, the behemoth of beer, has embraced the Long Tail strategy, argues Chris Anderson. The company "has hugely expanded the number of beers. coolers and other alcoholic drinks it offers, from 26 brands in 1997 to 80 brands in 2007. Today it makes organic beers, drinks for women, and host of microbrews such as Bare Knuckle Stout and ZiegenBock (available only in Texas)."
AB is certainly getting into niches. But if the essence of the Long Tail is the expansion of buyers' options, I'd argue that AB's strategy is more interesting as an example of an anti-Long Tail move than a pro-Long Tail one. It provides a lesson in how big companies can use Long Tail tactics to reestablish their dominance and, in the long run, reduce consumer choice.
AB's expansion of its product line is an old-fashioned control-the-shelf-space move. The company is using its distribution and marketing might to crowd the little guys - the local and regional craft brewers, in particular - out of the retailer's cooler in order to reassert its control over the market. In that sense it's a reactionary program, borrowing Long Tail methods (a multitude of brands) to kill off the real Long Tail (a multitude of producers). It's trying to cut off the little guys' economic air supply and run them out of business. To the extent it's successful, the consumer ends up with less choice than before - lots of mediocre variations on Bud with different labels and different niche-marketing programs.
Watch for similar phenomena in other markets, physical and digital, as various types of aggregators move in to roll up the long tail.
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Comments
Good insight. Long-tailness works best for the buyer where shelf-space is infinite. Otherwise, it's just another weapon for market dominance by the big guns. I guess Amazon will have to figure a way to open a beer section
Posted by: Mickeleh ![[TypeKey Profile Page]](http://www.roughtype.com/nav-commenters.gif)
at February 2, 2007 10:48 AM
This is a good observation, Nick. As Mickeleh says, an infinite shelf would seem to dilute the effectiveness of this strategy, but I wonder if we will not see online brand management that diversifies on the surface to secure more of the top 10 Google search results for a given topic.
The shelf may be infinite, but, as things stand, most people only every see the first few items on it.
Posted by: Anthony Cowley at February 2, 2007 12:11 PM
I'm sorry, but using long tail analysis for what is essentially old school floor planning and distribution is a poor use of the tool. Long tail distribution is not a hammer and floor planning is not a nail.
Posted by: MarcFarley at February 2, 2007 01:11 PM
Expert commentary on beer from an expert on beer.
http://www.grizzlymarmot.com/beer
Posted by: grizzly marmot at February 2, 2007 02:49 PM
Good anaylsis, but new termnilogy for an old technigue. The bottom line, the big name brands is dominant.
Danny L. McDaniel
Lafayette, Indiana
Posted by: Danny L. McDaniel at February 3, 2007 06:52 AM
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