ANHEUSER-BUSCH ROLLS OUT CAFFEINATED BUDWEISER

Slim Can, Sweet Flavor to Chase Red Bull-Drinking Club-goers

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CHICAGO (AdAge.com) -- Anheuser-Busch is chasing Red Bull-and-vodka-swilling club-goers with a caffeine-, guarana- and ginseng-infused beer called "B to the E."

The new malt beverage, part of the Budweiser family, fits in with a broader effort by Anheuser-Busch to reclaim 21- to 27-year-olds who increasingly are downing

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spirits instead of beer. The brewer has pledged to step up promotions and other marketing efforts at bars and clubs.

25% of beer volume
The so-called on-premise channel represents about 25% of beer volume.

"Distilled spirits is definitely in the background of this decision," said Bob Lachky, vice president of brand management and director of global brand creative at Anheuser-Busch, the country's biggest brewer with more than a 50% share.

Anheuser-Busch should be concerned. According to industry consultant Beverage Marketing, beer on-premise volume dropped by 1% in 2003. Spirits increased by 7%.

But previous efforts by brewers to introduce alternatives to traditional beer have fizzled. Case in point: the craze for "malternatives" -- malt beverages with spirits flavoring -- that was supposed to be the next big thing when it kicked off several years ago.

Malternative sales declined by 10% to 73 million cases after growing at a 16% clip in 2002 and a 37% rate in 2001, according to Impact Databank.

Miller pulls out
SABMiller's Miller Brewing Co. and Allied Domecq whacked Stolichnaya Citrona and Sauza Diablo earlier this year; the brewer also pulled out of a deal to make Jack Daniel's Original Hard Cola in partnership with Brown Forman. But Miller has stuck with Skyy vodka beverages.

Anheuser-Busch markets Bacardi malternatives.

With this latest launch, Anheuser-Busch is targeting 20-somethings who will drink a variety of alcoholic beverages over the course of an evening.

"We believe the consumer is jumping around a bit," Mr. Lachky said. "We're targeting that customer and no one else. Sweeter flavors have definitely made an impact on 25- to 35-year-olds."

Slim can
The drink comes in a slim 10-ounce can, reminiscent of energy drinks such as Red Bull, which has made inroads into bars and clubs as a mixer for hard alcohol. While the drink is called "B to the E," labeling on the can shows the name spelled with the cursive gold Budweiser "B" with a smaller "E" appearing as superscript, most likely meant to connote something to a higher power. Whatever its meaning, the bottom of the can reads "Beer with something extra."

The brewer said it plans to support the brew with local print advertising, point-of-sale materials, bar and club promotions and online programs. An advertising agency hasn't been decided yet. Anheuser-Busch will put B to the E in 50% of its markets by year-end.

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