Anheuser-Busch torques brand

Budweiser, Becks names to be used on higher-alcohol beers

St. Louis Post-DispatchJanuary 17, 2013 

Two new beers rolling off Anheuser-Busch’s production lines in St. Louis carry brand names with a familiar ring.

Tapping into the power of the Budweiser and Beck’s names, A-B is offering variations that have higher-alcohol content: Budweiser Black Crown and Beck’s Sapphire.

The brewer is betting that the flavor variations with higher alcohol content and new designs will boost the two brand families’ allure among U.S. drinkers.

“We have American iconic brands and brands that have been part of the brewing tradition going back 800 years,” Paul Chibe, A-B’s president of U.S. marketing, told the St. Louis Post-Dispatch. “That gives us a great opportunity to deliver on consumers’ needs.”

The two new beers have 6 percent alcohol by volume compared with 5 percent with the main brands, a new feature clearly aimed at the U.S. market. Even though Beck’s is the world’s most popular German beer brand, Sapphire will only be sold in the United States.

“The higher (alcohol content) provides a taste portfolio consumers are looking for, which we know from testing,” Chibe said. “Those are the ones consumers are gravitating toward.”

The higher-alcohol beers come on the heels of Bud Light Platinum, a 6 percent alcohol beer A-B introduced in January 2012 that quickly gained market share.

Anheuser-Busch, the St. Louis-based unit of Anheuser-Busch InBev, is hoping to replicate that success and inject new energy in some sagging brands in the U.S. market.

The launch of Budweiser Black Crown comes as Budweiser, while growing in foreign markets, continues to see domestic sales declines – dropping 7 percent in the United States in its third quarter.

Yet the play is not without risk. Offering another brand extension poses the threat that regular Budweiser could lose shelf space, further deteriorating sales, said Bump Williams, CEO of Stratford, Conn.-based consulting firm BWC Co., an adviser to beer retailers and distributors.

“There’s not a doubt in my mind that wholesalers will have Budweiser Black Crown everywhere overnight,” he said. “My concern is: Where is that shelf space going to come from?”

Anheuser-Busch started the new year by introducing Beck’s Sapphire, a golden pilsner brewed with German Saphir hops. It’s brewed in St. Louis.

Beck’s Sapphire’s sleek black bottle took two years to develop and must go through the furnace twice when it’s being formed to give it its black color. The distinctive look is meant to help the beer stand out in upscale nightclubs, bars and restaurants.

That launch was quickly followed up by Budweiser Black Crown, a crowd-sourced beer that will be available nationwide by Monday, A-B announced last week.

As a sign of the new beer’s importance, its first TV ad will run during Super Bowl XLVII on Feb. 3.

The amber lager, a blend of two-row caramel malt and four types of domestic hops, was the result of a challenge A-B put to its 12 U.S. brewmasters, dubbed Project 12, to create a unique take on its flagship Budweiser beer. Customers sampled the offerings in the past year, and the winning result – developed by Los Angeles brewmaster Bryan Sullivan – was Budweiser Black Crown.

A-B’s newest products are part of the company’s push to offer more options at higher price points, said Thomas Mullarkey, an equity analyst with Morningstar.

“It goes along with a long-standing trend of American consumers drinking more craft-type beers and higher-end beers,” the analyst said. “They’re catering toward the demographic that wants to try what they perceive to be higher-quality beers. It will fill a niche for people who want to experiment with their beer, but with a brand they’re familiar with.”

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