Blog: Carb counting
Chris Brook-Carter | 14 January 2004
A few months ago I appeared on Radio Four being interviewed about the launch of Michelob Ultra in the UK. Inevitably, the debate got round to whether I thought low-carb beers had a future in the UK. My answer back then was yes, but not in the short term. This, after all, is a market that still struggles with the concept of Light beer - viewing it as somehow inferior in quality to traditional brews and, more often than not, low in alcohol rather than low in calories. Therefore the idea that this concept could be taken one stage further to low-carb beer seems far flung at present.
However, hope for beer producers does come in the shape of the US - which is, of course, a far more sophisticated market when it comes to the diet concept and, more importantly, the low-carb diet.
Anheuser-Busch, the world's top brewer, said it sold a record 103 million barrels of beer in the US last year. Much of the sales growth, the company said, was attributed to the success of its Michelob Ultra low-carbohydrate beer, launched in late 2002, and Bud Light.
Michelob Ultra, the first major brand in the low-carb beer niche, now has a 2.1% share of supermarket beer sales. Rolling Rock reached the shipment milestone of 1 million cases of Rock Green Light in less than three months after launch. And, in March this year, Coors Brewing Co. plans to enter the low-carb market with Aspen Edge in 10 states.
"It's been the most successful new product since light beer," Benj Steinman, editor of Beer Marketers Insight was quoted as saying in the US press this month. "This is a phenomenon and no one really knows how high is high, but no one really knows when it's going to be over."
And this is the great debate. No one is doubting the ability of this new segment to generate sales in the short term, but there does seem to be genuine division over whether this is a sustainable innovation.
Industry analysts are divided about the staying power of low-carb beer. There are also concerns that low-carb beers will merely cannibalise market share from exisiting light beers, rather than grow the category as a whole.
However, in its most recent survey of US beer wholesalers, the equity analysts Legg Mason said that the vast majority of respondents believe low-carb beers are here to stay.
"In response to whether the low-carb beer trend is analogous to the short-term blip of flavoured malt beverages, a vast majority of respondents say they believe it is not, saying it is expected to be a long-term trend reflecting changing lifestyle and health choices," Legg Mason's report said.
Despite fears of cannabilisation of Bud Light, AB's combined volume is greater than what it would be in the absence of Michelob Ultra, in all likelihood, and the blended contribution margin is greater than that of Bud Light alone.
Yesterday was long. Very, very long. What started with an alarm in London at 0530 GMT ended with a Bacardi eight-year-old nightcap in Puerto Rico at 0730 GMT the following morning....
This weekend, Bacardi is hosting a three-day music event on the private island of Palomino just off the coast of Puerto Rico....
Warmest thanks to all of you who filled in our annual readers' survey this month. The results are very important for us to learn from and look to improve our service to you....
Today's news that German spirits firm Mast-Jägermeister has joined UK responsible drinking organisation The Portman Group may raise eyebrows in some quarters....
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