Can Higher-Alcohol Beer 'Black Crown' Turn Around Bud?

AB InBev Confirms New Line Extension, 'Bowtie' Can At Distributors' Meeting

By Published on .

Bud is about to get boozier.

In its latest higher-alcohol line extension, Anheuser Busch InBev will launch Budweiser "Black Crown " in early 2013, the brewer told distributors Monday at a private meeting in Chicago. Ad Age first reported the potential line extension last month, citing an label application in which Black Crown is described as a "golden amber lager" that is "distinctively smooth and beechwood finished."

The launch will likely be backed with significant marketing -- possibly even a Super Bowl ad -- as the brewer seeks to reverse the long-decline of the Budweiser franchise in the U.S. The move follows the launch in January of Bud Light Platinum, which at 6% alcohol by volume matches the ABV in Black Crown . By comparison, regular Budweiser is 5% ABV and regular Bud Light 4.2%.

In a statement to Ad Age , Budweiser Brand VP Rob McCarthy confirmed that Black Crown 's formula will be modeled after a limited-edition beer made earlier this year at AB InBev's Los Angeles brewery. The brew was part of "Project 12," in which brewmasters at 12 AB InBev breweries created their own small-batch "tribute" beers, each with a distinct style. "Though originally created in L.A., it's a beer born out of the collaboration of all of Budweiser's 12 brewmasters," Mr. McCarthy said. "The beer is an amber lager that is a little darker than Budweiser, but is flavorful and like Bud very drinkable."

Platinum benefited from a pricey launch that included two Super Bowl ads. The timing of Black Crown 's debut suggests it could be in line for similar backing, although it appears that AB InBev has not yet finalized its lineup of Super Bowl ads.

The brewer is also planning a new "bow-tie" shaped can for Budweiser, playing off the well-known brand logo design. It won't replace the original Bud can, but will be made available in a special 8-pack, Mr. McCarthy said.

The line extensions are designed to win over millennial drinkers who have increasingly switched to spirits brands, especially for nighttime drinking occasions. Also, the new higher-priced beers come as AB InBev and other brewers seek to recapture some momentum from smaller craft beer brands, which in many cases have higher alcohol contents than mainstream light beers.

Platinum, which launched in January, has found early success, quickly gaining market share of more than 0.9%, the brewer recently reported on its third quarter earnings call. The line extension -- along with the recently introduced Bud Light Lime-A-Rita -- helped the Bud Light family gain three-quarters of a share point in the third quarter, bringing total share to 21.5% in the quarter, the brewer reported. Regular Bud Light is the biggest beer in the U.S. at 19% market share, followed by Coors Light (8.7%), which passed Budweiser (8.4%) last year, according to Beer Marketer's Insights rankings as of the end of 2011.

Budweiser, whose sales have been sliding for years, has had an especially disappointing 2012, despite revamped marketing. Sales to retailers fell by 7% in the third quarter and were down 6% in the first nine months of the year. In the last couple years the brand has sought to reposition the beer to younger drinkers with the "Grab Some Bud's" campaign by Anomaly . AB InBev is also turning this summer's "Budweiser Made in America," concert festival into a film by Hollywood heavy-hitters Ron Howard and Brian Grazer.

AB InBev CEO Carlos Brito conceded on the the earnings call that "Budweiser did not meet our expectations" during the quarter. But instead of blaming marketing, he said suggested that the Bud Light line extensions stole attention from Budweiser, especially at the store level. Regular Bud Light "being of course the number one brand in the country didn't suffer that much," he said. "But Budweiser did suffer a little bit because a lot of the features and displays got turned to the innovations. And Budweiser lost some of that and there is a high correlation of course between features -- beer being featured and displayed -- and sales."

In this article:

Comments (0)

‚Äč