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Monday, March 23, 2015

Rising Popularity of Spirits Not Lost on Big Beer

The growing appeal of barrel-aged beer over the last few years has been interesting to watch. It's connected to the rise of extreme beers, in this case beers drenched in booze. This trend is no accident and it's also no accident that the evil empire has jumped on the bandwagon.

We've all seen the barrage of recent reporting on the growth of craft beer, which reached 11 percent share of the beer market last year. That's all well and good. The problem is, beer's share of the overall alcohol market is in decline. It has been for a number of years.

Back in 2000, beer held 55 percent of the alcohol beverage market. Its share slipped below 50 percent in 2010 and stands at around 48 percent today, according to Fortune. So craft beer is gaining an increasing share of a shrinking piece of the pie.

The big winner? Since 2000, it's spirits. Hard liquor held 29 percent of the alcoholic beverage market that year. It reached 35 percent market share in 2014. Given that wine has been mostly flat, liquor's increased share has come almost exclusively at the expense of beer. Big beer.

There are many reasons for the growing popularity of spirits. Part of it is probably generational. Millennials who've never even tried Budweiser love their booze. As well, Prohibition-era restrictions on liquor have been relaxed in a lot of places, making it easier for spirit makers to market their wares.

One could reasonably argue the increased popularity of liquor has helped promote interest in beer cocktails and barrel-aged beer, particularly beer aged in spirit barrels. If you think about it, beer aged in booze barrels is essentially a sort of beer cocktail in the glass.

The ass clowns at Anheuser-Busch are not blind to these trends. That's why they released the cocktail-inspired Rita line, which has seen decent sales success since 2012. In fact, the suits believe Rita would have done even better had she not been damaged via her connection to Bud Light.

I don't know if Ritas are "brewed the hard way," like everything else at AB. That's a tough one. But it's perfectly clear that there's no future in hitching products like Rita to the Bud brand. That's a connection that produces mostly negative reactions, particularly among younger drinkers.

The latest big idea from Anheuser-Busch is all too predictable. They're rolling out Oculto, a tequila-flavored beer targeting younger drinkers. Tequila has been gaining popularity with that crowd, so the move makes some sense. Early Reviews of Oculto aren't good, but never mind.

Oculto will display no clear connection to Anheuser-Busch. The label features a white skull printed directly onto a clear bottle. There will be no mainstream ad campaign. Instead, the AB brass hopes to generate a positive social media vibe by sending agents wearing masks into clubs frequented by Millennials to spread the word.

Will young drinkers be tricked into buying a product that caters to their tastes, but blatantly contradicts their brand preferences? Stay tuned.

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