• The Curious Case of Pabst Blue Ribbon

    (This article has been penned by Mansha Tandon who belongs to the Class of 2011 from IIM Calcutta. Mansha graduated with a degree in Economics and French and worked in client service at BBDO Sydney’s PR and Digital & Direct agencies. Her projects include image management and experiential events for Starbucks, Etihad Airways’ launch in Australia, and BTL activity for pharma majors Novartis and AstraZeneca. She subsists on cult and arthouse cinema, indie music, and postmodern fiction.)

    Subculture, Pop-Culture, and No-Marketing: The Curious Case of Pabst Blue Ribbon

    “Heineken? F*** that s***! Pabst Blue Ribbon!”

    Those familiar with David Lynch’s oeuvre will recognize this statement from Dennis Hopper, playing the indignant character Frank Booth in the film Blue Velvet. While it is deliciously tempting and romantic to attribute Pabst Blue Ribbon beer’s escalating sales and popularity-sans-marketing to a pop culture reference – there are some very curious trends and lessons embedded in its success. In spite of abysmal sales in 2001 and more recently, the global recession, Pabst has triumphed over consumers with its no-marketing ethos. Even as Budweiser and Corona were down 7% and 8% respectively by December 2009, PBR (as its ardent fans refer to it) was up 30% in dollar sales from retailers such as drugstores and supermarkets. Small bars in towns in states like Virginia and Oregon also report selling out of the cheap, bitter swill on Friday nights.

    The story of the Pabst brand is something of a soap opera. Jacob Best founded the Pabst Brewing Company in 1844 in Milwaukee, Wisconsin. Pabst Blue Ribbon beer derives its name from the blue ribbon that was tied around the neck of its ‘Select’ beer bottles, following its supposed win at the World Columbian Exhibition in 1893. Pabst was positioned as a solid, cheap, blue-collar, working class beer that enjoyed steady success off the back of its all-Americana image. PBR sales began their seemingly irreversible downward trend in the early 1980s; and within 25 years Pabst was considered more or less a defunct brand. In fact, Pabst barely moved 1 million barrels at the turn of the millennium, compared to the 20 million barrels it is reported as moving in the late 1970s.

    In 2001 however, the Pabst Company noticed a spark in the Portland, Oregon region and went down there to pursue this glimmer of hope. They found that the spike in sales was due to the counterculture hipster movement, and that indie musicians and pockets of youth that had divorced themselves from the mainstream were turning to Pabst as a statement of retro-chic style. Disillusioned with multi-million dollar marketing campaigns from the beer majors and incited by Blue Velvet’s reference to PBR, this too-cool-for-school set had somehow bought in emotionally to the Pabst Brewing Company as a modern-day American relic, and had voluntarily become brand ambassadors for Pabst. Despite its bitter taste and complete absence from the beer-marketing milieu, these consumers appreciated PBR as real, economical, and devoid of slick marketing gimmicks (this is primarily due to Pabst’s lack of budget for funding marketing efforts!). Much of the allure of PBR also lay in its initial scarcity, its dated brand persona, and the novelty of irony, of replying “Pabst Blue Ribbon”, when someone asked what you were drinking.

    Neal Stewart, PBR’s Divisional Marketing Manager in the early noughties, hit the road and traveled around America to stimulate interest in the beer – he identified important subcultures that had sprung up in the recent past and decided to talk to them. He hung out at pubs, bars, gig venues and art spaces, and spoke to hipsters and artists around the country about Pabst and its values. Gradually this word of mouth marketing paid off – consumers of Pabst in particular niches recognized and appreciated the fact that they were not being bombarded with “marketing” messages, and encouraged their friends to adopt Pabst as a cheaper, cooler option to other mega-beers. There was no advertising and barely any media expenditure – instead, PBR started sponsoring underground art gallery openings and indie music gigs, giving away free beer with a shave at the local barber’s, and establishing competitions to win free beer for a year. Even now, the Pabst Annual Art Competition is very popular and well subscribed to.

    The future holds a confounding conundrum for PBR. Previously owned by the Kalmanovitz Charitable Foundation, the Pabst Company was recently sold to the food tycoon, C. Dean Metropoulos, for a winning bid of $250 million. The beer risks alienating the very consumers whose ironic adoption of PBR was the catalyst for its meteoric rise; and who pride themselves in the fact that they are among the select few who know, drink, and love Pabst. It will be interesting to see whether Pabst retains its uber-hip, no-marketing mantra, and whether it remains an attractive choice for its TG, juxtaposed against the backdrop of its remarkable business miracle.

    References:

    Daily Finance
    CNN Money
    NY Times