Beside the premium domestic segment, there were popular priced beers dominated by local regionals. On a national basis, however, Old Milwaukee was the leader, followed by Busch in second place. Miller introduced Milwaukee’s Best, but Coors did not play in this segment.
Another segment was malt liquor lead by Schlitz Malt, by far the quint essential leader. Budweiser tried to get in the game with Budweiser Malt but was unsuccessful. AB later had some success with King Cobra; however, no beer was able to top the success of Schlitz. Again, Coors did not have a malt liquor.
In 1962, AB decided to pasteurize Michelob thus allowing them to package the brand and price it slightly higher than Budweiser, thus allowing Michelob be known as the super-premium category. To support this marketing strategy, AB developed a teardrop bottle which resembled a water droplet. More than anything this package defined the brand.
For decades, Michelob owned the super-premium category. Competitors introduced multiple products in an attempt to grab a portion of Michelob’s market share. Schlitz introduced a brand named Erlanger which quickly failed. Pabst presented Andecker in 1939, but discontinued it in the 60s. Andecker was re-introduced from 1972 to 1986 but still, was never successful.
Finally, Coors developed Herman Josephs Private Reserve which was originally introduced to compete with Michelob in the general market. Now, however, it is sold only in Colorado as part of AC Golden Brewing Co. Over the years other breweries introduced brands to compete with Michelob, but none were effective.
A number of Michelob line extensions were introduced into the marketplace over the years as Michelob sales declined. These extensions were aimed at the craft market and included a Honey Lager, Pale Ale, Marzen, Pumpkin Spice Ale, and Winter’s Burbon Cask Ale, along with a Light, Classic Dark, and Black and Tan. Only a handful of these brands had any degree of success. AB even discontinued the famous Michelob teardrop bottle in 2002, only to bring it back years later with limited success.
Then in 2002, AB introduced the line extension Michelob Ultra and the rest is history. Ultra now is the fifth largest AB brand and growing at a double digit clip. This year through May 17th, the brand continues to grow at +16.3%, which is on top of a +10.3% for 2014!
Unlike Bud Light, Miller Lite and Coors Light, Ultra’s marketing is clear, consistent, and episodic. While other lights are declining in sales, Ultra, with its clear message of “A Superior Light Beer” and an active life style, has maintained its core message. The package clearly states that it is low in calories at 95, low carbs at 2.6 and with an ABV of 4.2%.
The active life style message continues into Ultra’s packaging. Not only does the bottle look classy, the can screams light. A tall, thin can maintains the brands message. This marketing mirrors what Coors had done in the 60s and 70s. The Coors can was also a tall thin can with the message “Americas Fine Light Beer” and at the time Coors was the number one selling beer in its 10 states.
Ultra’s success flies in the face of light beer trends, but it proves that if you have the right liquid supported by an effective marketing campaign, even in today’s craft beer environment, growth is possible. For AB and its distributors, the success of Ultra means mass, margins and momentum…