The Biz: Malt drinks boon for cable, sports

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NBC's retreat last week from its plans to accept hard-liquor ads means vodka and rum spots won't be seen on the broadcast nets. But ads for brands associated with hard-liquor are expected to increase exponentially as the curtain rapidly rises on the alternative malt beverage category.

Diageo's Smirnoff Ice continues to boost visibility, including spots during this month's NCAA basketball tournament. Anheuser-Busch's Bacardi Silver just launched along with Skyy Blue, from Miller Brewing and Skyy Vodka. Similar products such as Coors Brewing's Vibe (see P. 4) and a Jack Daniel's brand, co-marketed by Miller and Brown-Forman Corp., and Captain Morgan Gold, also from Diageo, are on deck. And the straw that stirs the category, Mike's Hard Lemonade-perhaps the best-known and most aggressively marketed entry-is expanding with Mike's Hard Iced Tea. It remains to be seen where NBC-type protests of these hard-liquor cousins will lead.


The target is males aged 21-34, so the rising ad spending-which could reach $350 million this year-has poured into nets delivering that audience, especially cable nets like ESPN, Fox Sports Net and Comedy Central. Broadcast sports divisions have also benefited, such as CBS, which altered its policy for the category.

"You're talking about these products going from the drawing board to having national advertising budgets in the course of nine months," says Hank Close, senior VP-Comedy Central.

Ad spending has followed the drinks' popularity. The category has gone from $132.3 million in sales in food-, drug- and mass-retailers (except Wal-Mart) for the year ending Feb. 24, 2001, to $294.9 million for the year ending on Feb. 23, 2002, according to ACNielsen. Todd Martin, Mike's VP-marketing, says those figures account for about half of all sales.

Marketing is not limited to 30-second spots. Next month, Mike's will install a bar on the set of Fox Sports Net's oft-crude "Best Damn Sports Show Period" with comedian Tom Arnold. Three nights a week, the crew will gather around and discuss a "Mike's Hard Play of the Day." In May, Smirnoff Ice will be the presenting sponsor of ESPN show, "Pardon the Interruption," which features well-known sportswriters. Then in July, Mike's unveils a promotion on Comedy Central's "The Man Show" to win a date with a model.

"If you stay middle of the road, that's where beer is," says Jeff Tripician, who just left as acting VP-consumer marketing on Mike's. "We have to be very strategic in carving out our own niche."

ESPN and Fox Sports Net have approached the category differently. Unwilling to risk alienating big advertisers such as A-B and Miller, Fox sells alternative malts and beer as one category. Sensing a revenue stream, ESPN and sibling ABC separate the categories, forcing marketers in each to pay if they want alcoholic beverage exclusivity on a telecast. "We've been aggressive in saying maltaholics are not beer," says ABC/ESPN Sales President Ed Erhardt.

role in upfront

The category is expected to play a role in this spring's upfront market, though deals may begin over the summer. "They're going to make major media pushes during the hot summer months," says Tracy Dolgin, head of Fox Sports Net.

As much as network execs like the category, in part because it provided a lift during a down market, the beverages are not without controversy. Though the drinks have about as much alcohol as beer, products such as Smirnoff Ice and Bacardi Silver that use the same brand name as their hard-alcohol siblings have come under fire from consumer groups for being deceptive. Congress and the groups helped nullify NBC's plans for hard-liquor ads, and these new brews could face some heat. Network execs, meanwhile, say they closely monitor the ad content.The category's fate remains up in the air. "It has already surpassed where microbrews peaked," says Martin. "And the spending and consumer awareness behind this is just getting started."

But if the category becomes a flash in the pan like wine coolers in the mid-`80s, Bartles & Jaymes might have company off the wagon.

contributing: hillary chura and mercedes m. cardona

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