Upfront 2003: Beer

Last summer was the “malternative” season. About a dozen new brands hit what marketers in this arena call the ready-to-drink or flavored malt beverage category. Market leader Smirnoff Ice, Mike’s Hard Lemonade and the new entries were backed by what was slated to be media support ranging from $300 to $450 million.

Some of those drinks came and went. Lackluster sales prompted SABMiller unit Miller Brewing to pull advertising support for Stolichnaya Citrona and Sauza Diablo. Coors Brewing dropped Vibe, a fruit-flavored extension of Zima, and Smirnoff Ice sales lost ground versus the previous year.

Industry observers took note of the failures and deemed malternatives a fad. Yet such pronouncements were premature. Extinction for some products is inevitable when a wave of new brands try to jump on the early success of a hot category. But this bandwagon may still be rolling. High-end beverages, which include malternatives and imported beer, will grab 43 percent of beer sales in supermarkets and drug stores by 2007, up from 32 percent in 2002, says Bump Williams, svp of global consulting for Information Resources Inc. He adds that RTDs still offer opportunity because these beverages are bringing new consumers to the beer and ale category. They not only are registering high trial rates but high repeat purchases.

Brewers apparently agree and are not backing out. Diageo, which has the most at stake in the category, rolled a Smirnoff Ice Triple Black extension with spot market buys during the Super Bowl telecast. The premium-drinks company this year will spend $110 million on advertising, promoting and sampling for Smirnoff Ice and Triple Black, and other flavors like Smirnoff Ice Raspberry and Jose Cuervo margarita malternative are possible new product launches.

Anheuser-Busch continues to push for more RTD shelf space, launching Bacardi Silver O, an orange-flavored extension, and a low-calorie version of Doc’s Hard Lemon. Ad spending for Bacardi Silver and the O extension will be on par with last year’s Bacardi Silver outlay, which was $30.7 million, per Competitive Media Reporting. Miller will continue to buy advertising for Skky Blue, a $30 million account, and Jack Daniels Hard Cola.

Miller is scaling back on campaigns for malternatives—it introduced four last year—to focus on Miller Lite, whose market share last year dipped to 7.4 percent from 7.7 percent the year previous, according to Beer Marketer’s Insights. The Milwaukee-based brewer’s “Cat fight” spot, featuring buxom women fighting over “Taste great, less filling,” attracted more attention—some negative—than Miller advertising previously had enjoyed. Miller will parlay that publicity with a series of sequels. Ad support for Miller Genuine Draft will shift from national buys to core markets, and the total 2003 budget for Miller brands, which includes Miller High Life, will be comparable to last year. Measured media spending for the three beer brands was $159 million.

Coors’ ad spend this year also will be in line with last year. Measured media expenditures during 2002 for Coors Light and Coors Original was $166 million, per CMR. The Golden, Colo.-based brewer got on the radar of the coveted 21-to-27-year-old target market through its NFL sponsorship and “Rock On” ads, punctuated with high-energy music and raucous parties. This year’s slate continues the celebration theme, as well as the “Guys’ Night Out” mantra for Original Coors, while giving a nod of respect to the fairer sex with a remix of Tom Jones’ “She’s a Lady.”

The bigger bucks will again be spent by Anheuser-Busch, the only brewer of the top 3 that saw shipments increase last year. A-B’s prime-time budget will jump by 162 percent to more than $350 million.

The Michelob family, hitting an apparent home run with the launch of low-carbohydrate Michelob Ultra, will get at least $100 million of support, versus about $70 million last year. The No. 1 brewer has marketing agreements with 28 of the NFL’s 32 clubs and intends to commit more than $100 during the games, three times more than Coors spent last season. Some spend will shift from national to local, as A-B supplements distributors’ local promos.—Mike Beirne

Prime-time Network Spending in 2002: $284.1 million*

Hot Buttons: Despite some slipping in the category, brewers are not backing out of “malternatives.”

Category: Beer
PERIOD: Jan 1, 2002 – Dec 31, 2002

Advertiser: Prime-Time Network TV $$$
Anheuser-Busch Co.: $254.6 million
Adolph Coors Co.: $121.7 million
SABMiller PLC: $92.4 million
Heineken USA: $26.1 million
Boston Beer Co.: $8.8 million

Top Programs for Beer Advertising: Expenditures
NFL Monday Night Football: $29.9 million
Super Bowl XXXVI: $19.8 million
Friends: $7.8 million
Source: Nielsen Monitor-Plus