US: SABMiller buys two McKenzie River brands

By just-drinks.com editorial team | 3 July 2006

SABMiller has moved to beef up its presence outside of the mainstream beer category in the US with the acquisition of two fast-growing niche brands.

The London-listed brewing giant said today (3 July) that it has paid US$215m to buy the Sparks and Steel Reserve brands from drinks marketer McKenzie River.

Sparks is a citrus-flavoured beer-based drink infused with caffeine, taurine, guarana and ginseng. The brand, which has seen sales more than double in two years to 317,000 hectolitres, will compete head on with products from the stable of Anheuser-Busch, including B(E) and Tilt.

Steel Reserve, a so-called "high gravity lager", a stronger, fuller flavour brand brewed for a minimum of 28 days, saw sales leap by 35% between 2003 and 2005 to 1.6m hectolitres.

The deal is the culmination of a long-running partnership between the two companies, a relationship that saw SABMiller's US unit Miller Brewing produce and package the two brands.

An SABMiller spokesman told just-drinks: "What you're seeing in terms of growth in the US beer market is a fragmentation between craft, import and niche brands. Putting (Sparks and Steel Reserve) through the Miller system gives them significantly wider distribution."

The agreement will also see the two companies work together on developing new products.

Sectors: Beer & cider

Companies: SABMiller, Anheuser