Too many choices.

Research in Motion (RIM), the makers of BlackBerrys, is having some problems. Their stock is down, the new line of products has been delayed for a year and there are rumors of corporate sharks looking to take a bite out of them.

In the view of most observers, the problem stems from too many choices. Since 2007, they have introduced 37 models including BlackBerrys that flip, slide, with touch screens, touch screens and keyboards, high and low end products. The product line is too complicated. In a recent NY Times article, a market research firm estimated that their market share slipped from almost half in 2009 to roughly 10 percent in the US.

Compare that to Apple’s iPhone. There have only been four since 2008 and all were the same but differed only in storage or capabilities from earlier models. Apple made it simple and less is more.

A marketing professor at the London Business School was quoted in the Times article as saying, “Too many options can be frightening and overwhelming.” In fact, other studies on the subject have indicated that, while people claim to like abundant choices,  too many leads to confusion, increased concern about risk (making the wrong choice) and ultimately dissatisfaction.

Let’s turn to the alcohol industry.

Budweiser has lost the #2 position in beer to Coors and is now the third largest brand. There are lots of issues at play here but the overwhelming packaging choices consumers face at the store exacerbates the situation. At my last visit to a large beer retailer, I was assaulted with a dizzying array of cans, bottles and package sizes in 6, 12, 18, 24 and 30 packs. I bought a 6 pack of a craft beer.

How about rum? Captain Morgan came in Original Spiced, Silver Spiced (for those who didn’t like amber rum), Private Stock (an upmarket extension) and Parrott Bay, a brand extension and Malibu competitor. Each product in the line up had a strategic reason for being.

At a recent visit to the CM website, I counted 15 products in the line. Seven were for the base CM brand including Tattoo, Lime Bite, 100°, and Long Island Iced Tea. Eight were line extensions in the Parrott Bay brand extension category. Talk about confusing.

Compare that to Sailor Jerry. One brand, one message and one position. The brand is growing rapidly with a compound 5-year annual growth rate of close to 50%. Captain Morgan’s growth has been sluggish over the same time frame despite the massive number of SKUs. (For those of you in the business, it sounds to me like – good for shipments not so good for depletions.)

In a recent interview with Wine and Spirits Daily, Diageo USA President, Larry Schwartz, had this to say about Captain Morgan:

“I think we got a little sophomoric at some point, and I think now we’ve brought it back. We were operating too much in the beer space…”

Larry, it’s all about consumer choices and confusion. You might want to think about Crown Royal as well.

So by now, you’re over the game (pretty exciting by super bowl standards) and you’re tired of hearing the ad and marketing pundits give their views on the bad, the worst and the ugliest.

Got time for one more opinion — one that relates to the booze business?

In the past, the Budweiser ads were often more interesting than the game. Not this year.

Is it just me or has the quality, and therefore the effectiveness, of Budweiser advertising declined ever since InBev took over? I used to think that the international owners just didn’t understand the US market and that cost reductions were more important than brand building. I think I was wrong. The Budweiser ads were expensive to produce and cost a fortune to run. So it has to be something other than the owners.

Ad Age reviewed the Super Bowl ads and gave 3½ stars to a Motorola ad and none to A-B. Yet, both came from the same agency, Anomaly. So either Motorola got the better creative team or the marketing folks there are sharper.

There’s a company called Ace Metrix, which uses online panels of TV watchers to score the ads based on metrics such as persuasiveness and likeability, among others. They reported that the Dorito ad was #1 with 662 points (out of a possible 950) and Bud Light was #23 with 567.

So here’s my takeaway/insight – in the beer category, as in many others, consumers select brands on price, promotion and “group brand loyalty.” Inclusion in the group is based on many things, including image as a byproduct of communication or advertising.

Seems to me that the opportunity to reach the single largest audience at one time would compel a beer marketer to present ads that capture the audience’s attention and generate positive word of mouth.

But, then again, what do I know. I’m a spirits and wine guy. We can’t afford to advertise on the Super Bowl.

Today’s issue of Ad Age Daily has a lead story on declining beer sales. Ad Age Daily

Industry shipments are down 4% (Beer Institute); for the four weeks ending May 16, only 4 of the top 30 brands posted gains  (SymphonyIRI); the big boys saw large declines – Bud Light down 5.3% and Miller Lite down 7.5%, both vs. 2009 sales.

How come?

I don’t think it’s the economy, beer held its own vs. spirits and wine at the height of the recession…why should it decline now?

Could it be the growth at the top and bottom of the beer market? Craft beers and imports are doing okay as are the price brands. Bud Light and Miller Lite are hurting and that’s enough to upset the entire category.

Maybe after a few years of substituting beer for wine and spirits, consumers have returned to pre-recession consumption patterns.

My view is that the marketplace is cluttered with light beers including new entries such as MGD 64 and Budweiser Select 55. Adding to the clutter is a barrage of new products, line extensions, brand extensions at all price tiers, especially the top end. And, let’s not forget about the growth in craft beers.

So, maybe it’s just that consumers are drinking less but drinking better. Those of us in the spirits world know that phenomenon well.

Two news items that caught my eye recently and just in case you haven’t seen them here they are. Both were reported in Mark Brown’s newsletter.

Southern Wine alcohol distributor seeks loans of $2 billion

Source: The Associated Press

Not even the alcohol distributors are immune from the national financial crisis.

Southern Wine & Spirits of America Inc. is seeking $2 billion in loans to refinance existing debt. The Miami-based distributor is the largest in the United States.

Bank of America Corp. is arranging a $1 billion revolving credit line and a $1 billion term loan, a source said. Both loans will mature in five years.

Budweiser’s Clydesdales now come clopping at a cost

Source: USA Today

The Budweiser Clydesdales are still available for appearances … at a cost.

The St. Louis Post-Dispatch reported Monday that Anheuser-Busch has quietly begun charging $2,000-per-day for Clydesdale appearances, ending the brewery’s long practice of absorbing nearly all of the cost of showcasing the iconic horses.

The brewery says the fee helps to offset the $8,000-per-day cost of putting a hitch team on the road. Until now, event organizers or beer wholesalers were asked to pay nominal costs for stabling and feed.

It’s tough out there…