Budweiser Crown is a confounding concoction. Most beer geeks would rather drink toilet water than a Bud, yet Crown is an amber lager made specifically with craft beer aficionados in mind. Rather than launching new brands targeting discerning palates, big breweries have lately been stretching flagship brands like Bud Light, Miller and Alexander Keith’s to include beers with higher alcohol, more nuanced flavours or even tinged with lime and margarita. They’re gambling that products like Crown, which launched in Canada this month, will attract new fans and stem the erosion of Big Beer’s market share.
The major brewer’s percentage of the U.S. booze market dropped from 56% in 1999 to 48.8% last year, thanks to a boost in wine and spirits sales and the continued rise of craft brews. Brian Barrett, president of GuestMetrics, a firm that monitors bar and restaurant sales, wrote in a recent report: “Beer’s loss of alcohol share has accelerated over the past few months, and saw its worst share loss in mid-August since the very beginning of the year.”
By diversifying well-known brands, breweries are trying to entice everyone from hard-drinking partiers to palette-pondering craft nerds to people who don’t even like beer. MillerCoors (MolsonCoors U.S. operations) recently announced it will launch a 6.9% alcohol light beer called Miller Fortune next year to take on the successful Bud Light Platinum, which weighs in at 6% alcohol. Platinum launched in 2012 and has been a rare bright spot for Big Beer, grabbing $387 million in sales as of the end of 2012, and ranking 14th among American beer brands, according to SymphonyIRI. Containing eight fewer calories than a regular Bud but packing a boozy punch, these look to be aimed at a frat-boy crowd looking for more bang in every beer buck.
While there are no immediate plans to bring Fortune to Canada, Budweiser Crown was unleashed here just eight months after it successfully debuted in the United States as Black Crown. “[Crown] was such a hit in the U.S. that we decided to bring it to Canada because there is a similar demand for this flavour profile here,” says Briar Wells, a spokesperson for Labatt, which controls the Bud brand in Canada. “Crown is a way to address evolving taste preferences for more robust flavours.”
The extension trend also holds true for established Canadian brands. Labatt also had craft drinkers in mind when in March it launched three new Keith’s extensions, Cascade hop ale, Hallertauer hop ale and Alexander Keith’s original cider.
Industry insiders see this trend as a reaction to fragmentation within the beer category. We don’t drink one type of beer all the time anymore, going from a light beer on a hot summer day to a dark amber ale at night. “Today’s 21- to 27-year-olds grew up expecting variety,” MillerCoors VP of innovation David Kroll recently told Advertising Age.
The strategy seems to be working. In an August note to investors, JPMorgan Chase analyst Mike J. Gibbs wrote, “Budweiser is now close to holding its market share helped by the introduction of Black Crown.”