Anheuser-Busch pushes higher-alcohol beers

The brewer is betting big on its new Black Crown brand.

By Jonathan Berr Nov 6, 2012 1:57PM
Men drinking beer copyright Radius Images, CorbisAnheuser-Busch InBev (BUD), the world's largest brewer, is making a big bet on higher-alcohol beers.

Early next year, the beer maker plans to introduce Budweiser Black Crown, which Advertising Age describes as a "golden amber lager" that is "distinctively smooth and beechwood finished." 

Black Crown will receive significant marketing attention, including a possible Super Bowl ad, the trade publication says. A spokesperson for the corporate parent of Bud Light and Stella Artois couldn't be reached for comment.

Shares of Anheuser-Busch, which is based in Belgium, have soared more than 36% this year, as the brewer benefited from strong sales of Michelob Ultra and Stella Artois, as well as new products like Bud Light Lime-a-Rita. One area of disappointment is the flagship Budweiser brand, which the company said "did not meet our expectations." Lackluster U.S. sales resulted in Anheuser-Busch InBev recently reporting disappointing quarterly earnings. That's why Wall Street will be closely watching how the new brand is received.

Black Crown will have 6% alcohol by volume (ABV), matching the content of in Bud Light Platinum, a brand introduced in January that is selling well. It will surpass the 5% ABV in Budweiser and the 4.2% of regular Bud Light. 

The brand marks the latest move by big brewers to recapture the market share they have lost over the past few years to smaller craft brewers and other types of alcoholic drinks.

"I am sure that they will put some serious effort into it," said Eric Shepherd, executive editor of Beer Marketer's INSIGHTS, in an interview. "The wine and spirits industries have done a better job in marketing their products."

The road ahead for Black Crown won't be easy, however. The brand will have to be a hit with young males, the prime market for brewers, and there are already plenty of other brews to whet their whistles, along with other types of libations. Fewer and fewer people are drinking beer, even though some argue that it's healthier than milk, according to CNBC.

Beer made up 53% of alcoholic drinks last year, down from 61% in 1995, according to the U.S. Distilled Spirits Council. During that same time, wine's share rose from 11.8% to 15% and spirits jumped to 31.8% from 27.2%. Data from the Brewers Association shows that the market share for craft beers has climbed from 3.8% in 2007 to  5.68% in 2011.  

Being the King of Beers ain't what it used to be.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter@jdberr.

Tags: BUD
Nov 6, 2012 4:49PM
After having a few craft beers why would anyone go near Bud, Miller, or Coors? There so much to choose from they are going to have a tough time convincing a lot of people to come back to the fold.
Nov 6, 2012 4:38PM
I really hope they are betting on craft-brewed flavor, not "higher ABV".  Beer enthusiasts are flocking to craft brews because they taste good, not because they have higher alcohol content.  I just tried the Platinum this Halloween.  It's just another cruddy cheap American lager.  If this Black Crown is just another pathetic domestic lager with more alcohol and some dark coloring then it will be just another flop.  What they really need to offer is some kind of ale.
Nov 6, 2012 4:27PM
Bud beer.  American icon.  Another victim of the republican party.  Sold to a Belgian company.
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