E-Malt.com News article: USA: AB InBev to begin distribution of new malt beverages next week

Anheuser-Busch InBev NV said on February 10 it will begin U.S. distribution of Bud Light Mixx Tail in three cocktail flavors next week. Next month, MillerCoors LLC will launch a third type of its ultra-popular Redd’s Apple Ale, The Wall Street Journal reports.

Fed up with losing share to liquor companies for five years straight, these brewers are trying to cash in on the popularity of cocktails.

Sales of the hybrid brews, which are made like beer but flavored to taste like a cocktail, are surging. The category’s share of the $100 billion U.S. beer market has doubled over the past five years to 4%, according to industry tracker Beer Marketer’s Insights.

The drinks carry more alcohol than beer and are designed to appeal to millennial drinkers, many of whom prefer sweeter alternatives to beer. MillerCoors Marketing Director of Innovations Anup Shah said the drinks, known in the industry as flavored malt beverages, give brewers a chance to steal share from wine and spirits.

“Younger consumers continue to want more flavor variety,” Mr. Shah said.

Public health advocates have raised concerns in recent years about cocktail-style brews, arguing they appeal to underage drinkers because they taste more like a sweet soda than a bitter beer. A survey published in the peer-reviewed journal Substance Abuse in 2012 found teens were twice as likely as adults to drink malt beverages made by rum-brand Bacardi and vodka-brand Smirnoff. The brews are typically 8% alcohol content by volume compared with less than 5% for beer.

“It’s a dangerously high alcohol content and because it goes down quick and easy, you (can) have a kid in the hospital,” said Dylan Ellerbee of the North Carolina Alcohol Policy Alliance, a group that has lobbied the state to restrict flavored malt beverage sales to ABC stores.

Executives with AB InBev and MillerCoors said they haven’t received any complaints about their malt beverages from advocacy groups. Mr. Shah said MillerCoors’ beverages are put in “very adult” packaging and placed alongside other alcohol products.

Last year, the growth of the malt beverage category was a bright spot for both AB InBev and MillerCoors as sales of top-selling beer brands like Bud Light and Coors Light slumped.

MillerCoors on February 10 reported profits declined 11.8% in the fourth quarter because of lower beer sales and increased marketing costs, compared to the year-earlier period. Chief Executive Tom Long, 56 years old, announced he will retire June 30, bringing to an end a four-year tenure during which he increased annual profits but failed to reverse declining beer volumes. The board has begun searching for his replacement.

AB InBev, which moved into the cocktail-inspired brew category in 2012 with Bud Light Lime-A-Rita, leads the market with an estimated 25% share. Mike’s Hard Lemonade Co., an independent manufacturer, claims the No. 2 spot with a 20% share, and MillerCoors claims No. 3 with a 12% share, according to Beer Marketer’s Insights.

Bud Light Vice President Alexander Lambert said the company wants to double its share of the malt beverage category to 50% in the coming years, but declined to specify when. “It is a growing segment and an amazing opportunity. We believe Lime-A-Rita and Mixx Tail gives us a strong portfolio to go after our dream,” Mr. Lambert said.

Mixx Tail’s cocktail flavor Long Island mimics the taste of a Long Island Iced Tea, while Firewalker parrots the cinnamon-flavored whiskey of the hugely popular Fireball liquor. Bud Light will begin promoting the drinks later this week during the NBA All-Star Game in New York, which it is sponsoring. It will follow next week with promotions in New Orleans during Mardi Gras where it will have balcony signage along the parade route on Bourbon Street and do sampling at the airport.

The company will launch a digital, print and TV ad campaign in March. The ads are in the production process but will focus on the product and emphasize its “bold, smooth cocktail flavor,” Mr. Lambert said.


11 February, 2015