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COMMENT: SABMiller - malternative hangover in the New Year

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SABMiller is recalling much of its distributed 'malternative' stock due to lack of demand.

It's not the way any company wants to start the New Year - by recalling a product that was expected to capitalize on a much hyped growth category.

'Malternatives', which contain both brewed and distilled alcohol, have been very popular with younger drinkers, but it seems that the category is losing its fizz as demand falls. Now producers must focus on carving out a lasting niche or pack up.

SABMiller, the world's second-largest brewer, is recalling thousands of bottles of Stolichnaya Citrona and stablemate Sauza Diablo from US distributors after not living up to demand expectations. The drinks were launched in spring but the focus will now be on areas where demand remains - surplus stock will be destroyed.

Until very recently, malternatives were the hot product for US drinks producers. But now malternatives seem to be disappearing almost as quickly as they arrived. Coors' Vibe, described by Coors as a "wild cousin" to its existing Zima, was just one of dozens of new brands. But Vibe will be withdrawn after a few months' test marketing in eight markets. Recently, Diageo withdrew its Captain Morgan Gold brand at an estimated charge of US$42m.

The vast marketing spend, which the promotion of these new drinks demands, means that such a setback is hard to swallow. All manufacturers must keep their eye on the latest hot trend, but it appears that malternatives are in danger of becoming merely a craze. Producers must now secure stable market share for the few successful brands in areas where demand remains, and look for the next new trend.

Related research: Datamonitor, "Going Out" (DMCM0082)


Companies: SABMiller, Diageo

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