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Why Craft Beer Doesn't Have A Super Bowl Ad

Stocks in this article: SAM

INDIANAPOLIS ( MainStreet) -- Craft beer lovers love to boast about how their beer is booming while "yellow beer" fizzles, but on Super Bowl Sunday they're drowned out by Clydesdale hoofbeats.

If craft beer and small, regional brewers are such a game-changing force in American beer, why are they completely absent from the Super Bowl's annual marketing blowout? With Anheuser-Busch now part of by Belgian-Brazilian firm Anheuser-Busch InBev (BUD), Coors owned by half-Canadian MolsonCoors (TAP - Get Report) and Miller owned by South African-born, London-based SABMiller (SAB), that makes brewers such as Pottsville, Pa.-based D.G. Yuengling & Son and Samuel Adams brewer Boston Beer (SAM) the two largest American-owned brewers. Shouldn't they buy into America's biggest televised sporting event?

Anheuser-Busch's exclusivity deal is only part of the reason craft beer is on the Super Bowl sidelines.

Recent beer-buying trends indicate yes. Craft beer sales grew 11% by volume and 12% by dollars in 2010 and jumped 15% in dollars during the first six months of 2011. That's compared with 2% by volume and 4% by revenue growth in wine sales, a 4% spike in spirits sales and a 1% drop in overall beer sales.

Boston Beer became perhaps the only craft brewer to ever run a successful commercial campaign thanks to brewer interviews and George Thorogood's cover of Bo Diddley's Who Do You Love. Yet it shies away from splurging on Super Bowl ad space despite production that grew 12% to more than 2.2 million barrels in 2010 -- the highest among small brewers -- and is on pace to grow another 6% for 2011.

"Are you kidding? The big brewers are 80 times our size," says Jim Koch, president and founder of Boston Beer.  "Advertising on the Super Bowl is out of our league when one ad costs $3.5 million. Our money is better spent on hops."

Beer's short-yardage gains
The flat reality of craft beer is that despite all the growth within the industry and excitement about its future, craft and regional brewers still make up only about 5% of all beer sold in the United States, according to the Brewers Association. Anheuser-Busch could spill Boston Beer's 2.3 million during the course of the year and still produce nearly 100 million barrels. MillerCoors, meanwhile, holds only about 29% of the beer market compared with A-B's 48%, but still cranks out more than 60 million barrels of suds a year.

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