A-B readies test of energy drink to rival Red Bull

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Anheuser-Busch is taking Red Bull by the horns, preparing next month to test a non-alcoholic energy drink called 180 Degrees, according to an executive close to the brewer.

Anheuser-Busch wouldn't comment on the product, test market areas or active ingredient in 180 Degrees. But distributors said the world's largest brewer wants to keep in its fold customers who may diversify into New Age beverages spiked with alcohol. Although the distributors had not heard specifically of 180, they said such an introduction makes sense.

"[Anheuser-Busch] recognizes the market and potential of this in the on-premise [venues], mixed with vodka, and that it has the potential to pull young people away from beer," one distributor said. At its March wholesalers convention in Atlanta, in fact, the brewer featured for display a bar of the future--complete with coolers of Red Bull.

Red Bull, marketed by Red Bull North America in Santa Monica, Calif., came to this country in 1997 from Austria. It has a strong hold in California, Oregon and Washington and has been slowly making its way east. Anheuser-Busch appears to be the country's first major brewer to venture into isotonic drinks.

A handful of upstarts--like Hansen Beverage, which last week launched Hard-E, a malt and ginseng concoction--are trying to encroach on its territory, mixing alcohol with energy supplements, according to data from Marketing Intelligence Service, Naples, N.Y.

The surge of isotonics has led spirits companies including Allied Domecq Spirits USA and Seagram Spirits & Wine Group to explore marketing alcoholic beverages laced with herbal ingredients or caffeine. Allied had tested drinks containing guarana, ginko biloba and ginseng on 25-to-35-year-olds, but the company said it had no plans to introduce any products imminently. A Seagram spokeswoman said its ginseng-infused Gin & Juice line has done well since its launch in the late '90s.

Few other brewers market non-alcoholic drinks other than beer. Miller Brewing Co., for example, sells a non-alcoholic, non-beer line on the West coast called Henry Weinhard's Soft Drinks in orange, vanilla cream and root beer flavors.

For Anheuser-Busch, 180 Degrees marks its fifth post-Prohibition foray into non- and trace-alcoholic beverages. In the late 1970s, the brewer tested a non-alcoholic root beer, dubbed Root 66, but pulled it within three years. A decade later, it tried lemon-lime flavor Chelsea, which contained 0.4% alcohol, and a non-alcoholic fruit-flavor line called Zeltzer Seltzer. Both were abandoned in little more than a year. Anheuser-Busch also picked up two bottled water brands in the mid-'80s but exited the business in 1988.

All were dropped because of distribution problems, lackluster demand and profit, or criticism that Anheuser-Busch was trying to hook youngsters on its products.

A YOUNG AUDIENCE

But Tom Vierhile, general manager of Marketing Intelligence Service, said Anheuser-Busch could have an enthusiastic audience for 180 Degrees in the swelling number of young people who tend to be more interested in thrill-seeking than were their older siblings, evidenced in the popularity of sports such as snow boarding, rock climbing and mountain biking. "Kids want a brand that kind of speaks to them," he said.

SPORTS TIE-INS

He said the brewer could make a go of 180 Degrees because of its long history of sponsoring sporting events. "They have such a tie-in with sports they may have the potential to do some damage," he said.

It couldn't be learned whether 180 Degrees has been assigned to an agency or what advertising is planned for the brand at press time.

According to Mr. Vierhile, energy enhancement products are a way for marketers to leverage themselves, especially since regulations governing health claims on supplements have been relaxed since the mid-1990s.

"When you have about 81% of a market, you can expend a ton of energy to get that other 19%, or you can better spend your energy by trying to leverage that heritage into some other areas," he said.

Copyright August 2000, Crain Communications Inc.

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