Jul 102018
 

Bill Hackett of Constellation Brands has long advocated that the beer industry is all about the brand building which, in his opinion, is lacking from suppliers. For decades, the industry has followed the line extensions model as this has been the path of least resistance.

Light beers were the first line extensions and were by far, the most successful of all with the major selling brands being Bud Light, Miller Lite, and Coors Light.  Budweiser, Coors, and Miller are, of course, still viable selling brands in and of themselves.  Bud Light continues to expand on their light extension with additional extensions: Bud Light Platinum, Bud Light Lime, and Bud Light Orange.  Only the future will reveal the next extension from Bud Light.

Years ago, AB tested Michelob Ultra, a line extension from Michelob, and, as they say, the rest is history.  That line extension is now THE brand.  Ask any AB wholesaler today and they will tell you Michelob Ultra is on fire.  While other brands with the same wholesalers are losing ground and struggling, Ultra continues its remarkable growth by staying true to its branding. Ultra, like Bud Light, has its own line extensions: Ultra Lime Cactus, and recently, Pure Gold.  Both extensions are growing by feeding off the mother brand.

In the 1970s, Miller Lite, which was originally dismissed by most breweries as a viable brand, soon hit pay-dirt with consumers.  Shortly thereafter, both AB and Coors followed Miller’s lead with their respective light beers.  Although other breweries produced their own light beers, they had little to no success.  The two biggest failures were Schlitz, with at least three light beer efforts, and Pabst.  Neither brewery could establish a light brand.  The same story was true for the regional beers. No brewery could establish a light challenger.

In the past year, the industry has seen two challengers to Ultra’s dominance. The first was Amstel X Light, a line extension of Amstel.  Soon thereafter Corona Premier followed.  Both these extension lines are the produce of major importers. As predicted by this blog, Amstel’s X Light, once a Heineken Light offering, would not become a viable brand.  X Light is now hanging on for life as many key retailers are discontinuing this SKU during their summer resets.  Unless something unexpected is occurs, X Light will become just like its predecessor, Amstel, a brand of the past.

Corona Premier, a line extension of Corona, targeted directly at Ultra with low carbs and calories, has become a viable new product making the top lists of new products.  Corona Premier’s scan numbers continue to grow.  Constellation Brands and Corona appear to be stepping up to be Ultra’s main competitor.

Heineken’s major mistake was to use Amstel as the line extension instead of using Heineken.  Corona Premier has major support behind it, and with its initial success, expect Constellation to step up its spending against the brand.  Corona has Corona Light and Corona Premier pitted against Ultra. Heineken, however, has only a somewhat successful Light in Heineken Light.  Heineken’s new CEO, an American, has her work cut out for her and it will be interesting to see how she addresses this segment.

Rest assured that the other majors including MC will soon attack Ultra with their own offering of low carbs.  Miller Lite experienced success with their low carb campaign but eliminated that campaign some time ago.  The next 18 months will be interesting.

Every great brand is like a great story…

Editor’s note:  It was reported yesterday that Scott DeMartine of Columbia Distributing passed away recently.  I was fortunate to have worked with Scott when he headed up Star Brands.  He will be missed.

 

 Posted by at 6:00 am