Marketing 50

Michelob Ultra

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Nearly two years before most food and beverage marketers began jumping on the low-carb bandwagon, Anheuser-Busch Cos. was developing a formula for Michelob Ultra beer.

Bob Lachky, A-B's VP-brand management and director of global brand creative, credits August Busch III for coming up with a mandate to tap into the low-carb Atkins Diet craze that was brewing. "He was saying, `Is there a beer product out there we can develop for an older lifestyle and keep Atkins in mind?' " says Mr. Lachky. By April 2002, A-B had a formula to test in the retiree haven of South Florida, where Ultra had a "really good response." By September 2002, Ultra was ready for a national debut.

Not even the 49-year-old Mr. Lachky could have predicted the wild demand for the Ultra formula, which contains 95 calories and 2.6 carbohydrate grams per 12-ounce serving.

"The key decision we made was to go to TV support," he says, noting weekly sales jumped immediately, including among 21-to-27-year-old men and women. "Secondly, we didn't know going in how powerful the Michelob name was," Mr. Lachky says, adding that despite the disrepair in the Michelob brand, "there was a latent understanding that Michelob meant quality and good taste. ... Low-carb was the introduction, and the [Michelob] name was a clincher."

Since its September 2002 launch, the waistline-friendly beer has added much welcome girth to A-B's bottom line, becoming the fastest-growing brand in the company's history. In its first quarter, Ultra sold 400,000 barrels, 100,000 more than Bud Light sold in its first year, according to Impact Databank. By the end of 2003, Ultra is expected to easily surpass 2 million barrels.

"We were amazed at how fast this brand was growing, so now we've tripled our projection," says Mr. Lachky.

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