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10/22/2018

Big Bets on Low and No-Alc; Heineken 0.0 and 2 Seltzers to Get $100 Mil in Mktg Support

The world of alc bevs is changing at warp speed as powerful trends like health and wellness, desire for flavor and variety, less beer consumption by entry level consumers increasingly shape future.  As beer and alc bev cos try to get ahead of curve on these trends, they are betting on the come. In fact, 3 brands in low and no-alc segments that are a little more than 1% of biz, seltzers and non-alcs, will get almost $100 mil in mktg support next yr.  Those are big bets.

Heineken 0.0 will reportedly get somewhere around $50 mil in mktg investment in its intro yr, INSIGHTS hears. It is easily HUSA’s biggest new product launch since Heineken Light.  And yet, volume expectations are modest; HUSA pointed to goal of 2.5 mil cases by 2023. Compare to Heineken Light, which sold 8 mil cases in 2006 intro yr and peaked in ’07 at near 10 mil cases, with similar sized investment. Also compare to White Claw, Mike’s explosively growing brand that is by far #1 hard seltzer and will sell 11 mil cases or so in 2018. White Claw will get $25 mil in mktg support in 2019, Mike’s told distribs. That’s not chump change but certainly far less per case than 0.0 will get.  Then too, AB will rejigger Spiked Seltzer, which originally launched hard seltzer segment, to be more in tune with today’s (lower alc) trends.  Its new Bon & Viv Spiked Seltzer comes in at 90 calories, 4.5% ABV, and 1 gram of sugar.  This new brand will get $19 mil in marketing support next yr.  That’s some $94 mil between 3 brands, but far from all the action in this space. Other key players Boston Beer, Diageo and MillerCoors will also ramp up.  

Meanwhile, FIFCO USA (formerly NAB) jumps out front in a potentially new segment.  Next yr, it will feature first spiked still water, Pura, as its top priority.  At natl meeting with distribs, it promised “significant focus and investment like you’ve never seen before,” including 7-figure investment in tv alone.  Many other top malt bev suppliers including ABI, Boston, Diageo increasing emphasis on seltzers, no-alcs or non-beer bevs. But at least 3 of top 10 malt bev suppliers (HUSA, Mike’s and FIFCO) will make their biggest bets on non-beer or no-alc propositions. What the heck is going on?

Mainstream beer is falling increasingly out of favor, and big brewers/malt bev suppliers simply must respond. Some are turning up heat. Could these new brands exacerbate rather than alleviate mainstream beer’s struggles? Pura’s celebrity ambassador, soccer star Carli Lloyd said bluntly: “What I really like: this isn’t carbonated, so I don’t feel bloated.”  Well, that’s one way to address a perceived weakness of beer head on.

All this action occurs against a backdrop where largest global distiller Diageo just identified “low and no alcohol” cocktails as #1 trend for 2019 in its “Future of Drinks” trends session. And largest global brewer ABI has “smart drinking” goal of 20% of its malt bev volume in low-and no-alc form by 2025. That does not include ABI’s obvious ambitions in non-alc bevs. But the lines are increasingly blurring between beer and non alc bevs. That was apparent at AB’s booth at Natl Assn of Convenience Stores conference in Vegas. AB showcased multiple new innovations like Hard Green Tea from 10 Barrel, Spiked Agua Fresca from Golden Road that seem to take inspiration from non-alcs, but which were designed at its craft brewers. It’s gonna be a wild ride!

Publishing Info

  • Year: 2018
  • Volume: 49
  • Issue #: 19
Read 375 times Last modified on 12/31/2018

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