Bud is seeing 'Red'

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Anheuser-Busch has begun testing a white-collar version of its blue-collar Budweiser in Manhattan.

Red Label from Budweiser recently has been filtering into bars and restaurants, said a brewery spokesman who declined to comment further. With a taste and price in line with imports, Red Label is one of the flagship's first line extensions since Bud Light launched in 1982. The goal is to use the Red Label name to add some cachet to the King of Beers, which this year fell from the country's No. 1 spot to second-place behind Bud Light.

The fall launch could give the world's largest brewer a fuller complement of products, especially among domestic specialties, as expected (AA, May 7). Though just a fraction of the country's overall beer industry, the higher-priced category offers distributors commensurately higher margins. Last year, domestic specialties grew 3%-triple that of the overall beer market, according to Beer Marketer's Insights.

Boston boutique Red Advertising has produced some print advertising for the new product, according to an executive close to the brand. The agency and company, however, must be careful not to over-market Red Label for fear of turning off the discriminating specialty drinkers that eschew Budweiser.

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"These drinkers don't want to be told what to drink," the executive said, noting the initial ad budget likely will be small.

Budweiser, which traditionally has used red in its label, wants the new Red Label moniker to leverage the upscale status of products such as Johnnie Walker Black Label. The company is looking to develop its own super-premium products since its attempts to form new alliances with imports have failed. Older agreements include a large stake in Mexico's Groupo Modelo, which makes Corona Extra, as well as a reciprocal licensing arrangement with Japan's Kirin Brewery Co. for the two to brew each other's beer in their home countries.

From 1990 to 2000, Budweiser volume has dropped 30% while Bud Light's increased 172%, according to Beer Marketer's Insights. In 2000, Budweiser shipments fell 3% to 34.8 million barrels while Bud Light grew 11% to 32.1 million barrels, narrowing the gap between the two to fewer than 3 million barrels.

Anheuser-Busch spent $396 million on measured media last year, according to Taylor Nelson Sofres' CMR. Much of that was dedicated to Budweiser, which received $146 million in spending. Bud Light received $107 million, and Michelob Light garnered $37 million in measured media, according to CMR.

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