Anheuser-Busch, Bacardi Team up to Enter Malternative Race

A $60 million promotional launch of a malt beverage flavored with rum and citrus marks Anheuser-Busch's entry into the "malternative" beverage segment in a joint venture with spirits-maker Bacardi USA Inc. The new drink, Bacardi Silver, will be nationally distributed by February 18, becoming the latest drink in the malternative segment. Its introduction may beat other malternative launches due out this spring including SKYY Blue (backed by a $40 million marketing campaign) from Miller Brewing Co. and San Francisco-based Skyy Spirits, and two malt beverages (backed by media campaigns totaling $50 million) from Miller and London-based Allied Domecq PLC.

Alternative malt beverage sales increased 26.1 percent through November of 2001, especially among the beer industry's core consumers, those between the ages of 21 and 27, compared with the same period in 2000, according to data collected by ACNielsen. Much of the malternative growth is tied to Smirnoff Ice owned by Guinness Bass Import Co., a unit of London-based Diageo PLC, a worldwide drinks company that includes Smirnoff Vodka among its brands. Growth also has been fueled by alcohol lemonades, such as Mike's Hard Lemonade, owned by Mark Anthony Brands Ltd., based in Vancouver, Canada.

Moderator Comment: Will Malt beverages grow the overall alcoholic beverage category or will it shift sales to other segments?

It is very hard to bet against the marketing and distribution power of Anheuser-Busch. The brewer is making high-impact POP available to support the February 18^th launch of Bacardi Silver. Ultimately, both off and on-premise retailers will judge the success of any new product to be whether it brings new adults to the category and if it positively impacts profits. [George Anderson - Moderator]