A-B’s New Product Blitz Yields Big ReturnsFebruary 21, 2013
Anheuser-Busch InBev’s (ABI) pending takeover of Grupo Modelo has been grabbing all the headlines, but while ABI continues to try to close that deal (see update below), it’s enjoying immediate success with three recent new products in the U.S. market: Bud Light Platinum, Bud Light Lime-a-Rita and Michelob Ultra Light Cider.
Bud Light Platinum rolled out in January of last year, and by summer ABI said it had already captured 1% of the U.S. beer market. By the end of 2012, the higher-priced, higher-alcohol Bud Light extension had depleted 27.5 million (2.25-gallon) cases, according to Impact Databank, overtaking Blue Moon among many other established players.
Fellow Bud Light extension Lime-a-Rita, which, like Platinum, sells at a premium to the core brand, also made an immediate impact following its launch last April, ending the year at 7.3 million cases. Lime-a-Rita’s strong start, in particular, prompts the question of how much of A-B’s new-product success is coming as a result of cannibalization of existing brands, especially Bud Light Lime, which surged to 27.5 million cases in 2009, its second year on the market, only to slip by 20% from 2009-2011. However, ABI claims its initial research shows that more than 40% of volume for Lime-a-Rita—an 8%-abv offering sold in eight-ounce cans—is being sourced from spirits and other beverage categories outside beer.
On a much smaller scale, ABI’s Michelob Ultra Light Cider also made a statement in its debut. Introduced in the second quarter of 2012, Ultra Light Cider depleted 350,000 cases for the calendar year. Cider currently accounts for only a tiny piece of the beer market, but it’s among the fastest-growing segments, rising at rates above 20% in recent years. While MillerCoors (with its acquisition of Crispin), C&C (with its acquisition of Vermont Hard Cider), Heineken (with its play to bring its Strongbow brand in-house in the U.S.) and Crown Imports (which now distributes Carlsberg’s Somersby Cider in the U.S.) have all made moves in the category of late, ABI is differentiating by staking out cider’s low-calorie segment with its Ultra Light offering.
Keeping up momentum behind Platinum, Lime-a-Rita and Ultra Light Cider to make sure they don’t go the way of former high-profile launches like Bud Select—which soared in the early going only to lose steam after a few years—will no doubt be a key part of ABI’s U.S. market strategy this year. So too will be its effort to continue innovating with a new batch of upstarts, notably upscale Budweiser offshoot Black Crown.
Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.