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E-Malt.com News article: USA: Anheuser-Busch tries new fruity beer additives
Brewery news

Anheuser-Busch Cos. produced new fruity beer additives for beer lovers called Spykes, The Associated Press reported February 5.

Analysts see it as a baby step taken by the nation's largest brewer toward diversifying its beer portfolio. Spykes is a malt liquor with a 12 percent alcohol content that can be mixed or taken as a shot, and is slightly caffeinated, for a kick.

Packaged in 2-ounce bottles, Spykes comes in such flavors as Spicy Mango and Spicy Lime - with the "spicy" referring to a slight, jalapeno-like burn on the finish - as well as Hot Melons and Hot Chocolate.

"Hot Chocolate is not my thing," said Scott Clemenson, a 32-year-old clothing retail manager in St. Louis. But he did favor the Spicy Lime in his Bud Light.

Spykes isn't currently sold in St. Louis, but Clemenson was able to sample it last year on an Anheuser-Busch brewery tour. On New Year's Eve, he served it to his wife and her friends, who liked the lime and melon flavors.

"They can add it to anything, like vodka for a martini mix," Clemenson said. "And the packaging looks neat, with the little plastic bottles they can just throw in their purses."

Spykes can be mixed with just about anything, which was what Anheuser-Busch was after. The King of Beers wanted a fun product that would resonate with young adults, and thought Spykes would tie in well with its other brands.

Getting new, younger taste buds is crucial because beer makers have been losing market share to distilled spirits for the last five years.

Anheuser-Busch "is trying to make a play in the distilled spirits arena, which appeals to young adults, and to women, who often do not favor the taste of beer," said Benj Steinman of Beer Marketer's Insights.

To be sure, beer mixers have been tried before, but remain a niche product, Steinman said, adding Spykes isn't going to set revenue on fire.

Instead, Spykes is likely being used as part of an experiment to learn how drinkers' tastes are changing, he said.

"They're trying to understand what's going on there, and what they can do through either growing their own brands or acquiring others," Steinman said.

Sales of Spykes have been increasing slightly each month, and have helped to keep customers' eyes on other Anheuser-Busch products, said Pat McGauley, Anheuser-Busch's vice president of product innovation.

Anheuser-Busch started test marketing Spykes in stores about a year ago, and in bars and restaurants within the last four months, McGauley said. “The strategy has been to build the brand slowly, by word of mouth, on the local retail level first”. "We're taking a cautious approach to get market support ... building the brand within (individual distributor) accounts."

Salespeople are taking a hands-on approach, showing retailers which Spykes flavor tastes best in which beer, and distributing promotional tools that will catch the beer shopper's attention with mixer recipes.

That approach has carried over into marketing Spykes in bars and restaurants, where Anheuser-Busch supplies training and displays, such as a glowing, rotating Ferris wheel that holds bottles of Spykes in its cars. Over Thanksgiving, Anheuser-Busch promoted Spykes with a "Reunion Rail," a box that lines up Spykes shooters for four people to drink at the same time.

When Spykes were first marketed, about 30 percent of customers drank them without mixing, but that's risen to 60 percent, McGauley said.

"Spykes have done well with all demographics, but particularly with college students and tourists," said Bryan Merrit, sales manager for Anheuser-Busch distributor L.E. Lichford Inc. in Lynchburg, Va. "Each month for the first four months, we couldn't even keep it in stock, and we sold a little more each period," Merrit said. "Sales have slowed down some now, probably due to the season."

Since midsummer, the distributor said it has sold 1,500 cases of Spykes for as much as $2 a bottle. In addition to retail stores, Lichford distributes Spykes in bars and restaurants that only served beer, lessening the competition with mixed drinks.

Such accounts have been particularly successful with Spykes, such as in Florida, where liquor licenses are separate from beer and wine, McGauley said.

07 February, 2007

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