Mich Ultra Bucks Big Light-Beer Trend: It's Actually Growing

A-B InBev Will Pour More Marketing Behind Its Hottest Brand

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If Anheuser-Busch InBev's beers were children, then Michelob Ultra would be the kid that does everything right, only to be overshadowed by his erratic bigger brothers. While the brewer has put the spotlight on Bud and Bud Light, Ultra has outperformed them both, growing sales and market share while getting a lot less ad support.

But in the coming months, Ultra is finally about to get some love as A-B InBev makes it one of its big bets for 2015. The so-called "Superior Light Beer" will get an especially strong push in April, and overall media spending for the year will be at the highest levels in the history of the 13-year-old brand, said Edison Yu, the brewer's U.S. VP for value and premium lights.

Ultra drinkers "love the brand" and "are drinking more of it," said Mr. Yu, who declined to detail precise spending plans. "So our goal is really to bring new consumers into the franchise to accelerate our growth."

Part of the strategy includes tweaking Ultra's positioning to reach a wider base of consumers. While ads will continue the athletic-theme long used by the low-carb brand, spots will take on a more easy-going tone. Previous ads were "more intense," sometimes showing strenuous activities, Mr. Yu said. Going forward, spots "are still very active but we are much more social than we were before and the activities we are portraying are fun and more casual."

For instance, one new ad (above) that recently broke features runners and kayakers, but much of the footage shows them relaxing with a few Ultras. The brew recently changed agencies from Havas' Palm & Havas to Interpublic's FCB, Chicago. The ad above is by Palm & Havas but FCB will handle work going forward, Mr. Yu said.

Michelob Ultra's New Packaging
Michelob Ultra's New Packaging

Packaging-design changes include replacing the brands cream color with white, while reducing the amount of blue. The goal was to give the brand a more sophisticated look, Mr. Yu said. Also planned is a contest in which "boarding passes" will be placed in Ultra packs, giving drinkers a chance to win "superior experiences" like golf at TPC Sawgrass or a kayaking trip in Alaska.

Ultra grew shipments by 8.5% in 2014, making it one of only three beer brands that grew last year among the largest 10 brands, according to data from Beer Marketer's Insights. Ultra's market share reached 2.1%, compared with 1.9% in 2013, making it the 10th-largest brew. The other brands that grew are ninth-ranked Modelo Especial, which grew by 20.2%, and Corona, which was up 5.4%.

Ultra has "been on a good trajectory for years and it kicked it up another notch in 2014," said Benj Steinman, president of beer trade publication Beer Marketer's Insights. He speculated that the brand could be benefiting from the recently weak sales trends for Coors Light. A-B InBev is "getting more traction with their efforts on [Ultra] that than on Bud or Bud Light so far," he added. "So they are feeding the fire." There is another benefit to boosting Ultra: It is sold at a 15% price premium to regular light beers.

It is not as if Ultra has been completely ignored. A-B InBev spent $50.8 million in measured media on the brand last year, according to Kantar Media. But that pales in comparison to what was spent on Bud Light ($308 million) and Budweiser ($113 million), according to Kantar figures including spending on line extensions. Bud and Bud Light lost market share in 2014, albeit from a larger base than Ultra, according to Beer Marketer's Insights.

Ultra has successfully fended off other low-cal competitors over the years, including Miller64, which boasts 64 calories per 12-ounces. Ultra has 95 calories. A-B InBev's own Bud Select 55 -- which has 55 calories -- has also failed to grow beyond niche-brand status.

"If you are drinking a beer like that you don't want to call out how low in calories it has. It screams, 'I am on a diet because I am fat,' " said Harry Schuhmacher, editor and publisher of Beer Business Daily. Ultra, by contrast, "calls out more of a healthy lifestyle than counting calories," he said.

And if the trends continue, A-B InBev will be counting Ultra's money.

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