MICHELOB TO GET INCREASED AD SPENDING

Anheuser-Busch Cites Success of New Ultra as Boosting Brand

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BOSTON (AdAge.com) -- Anheuser-Busch Cos. today said it plans to step up spending on its high-end Michelob family of beers as it fights for share in one of the industry's most lucrative categories.

Renewed interest
The world's largest brewer credits the Michelob Ultra, the new low-carbohydrate brew, with boosting interest in the Michelob family, which had been largely shunted aside by Anheuser-Busch toward the end of the 1990s, said Randy Baker, vice president and chief financial officer.

He said Michelob and Michelob

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Light Brew to Appeal to Aging Baby Boomers
Light would receive more money and more contemporary creative executions. Anheuser-Busch has said Ultra had more female followers and was skewing younger than the brewer's other products. Advertising from Waylon Advertising, St. Louis, carries the tagline "Lose the carbs. Not the taste" as a way to reach people with more active lifestyles.

In the first eight months of this year, Michelob brands received $46.9 million, 8% higher than all of last year's ad spending, according to Taylor Nelson Sofres' CMR.

Prices going up
Michelob prices are on the rise as well, with the brands selling at import levels -- more than No. 3 Labatt and No. 4 Tecate but less than No. 1 import Corona Extra and No. 2 Heineken.

"Our objective is to move the family up to where it is at the low end of the high end," Mr. Baker told analysts gathered in New York for the annual Morgan Stanley Global Consumer Conference.

Mr. Baker said that while Ultra, which just launched nationally, had done well in tests, it was too early to predict how well it would fare in the end.

Mr. Baker reiterated that the brewer is having a good year and confirmed the company's 14% target for earnings per share this year and a 12% objective for 2003.

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