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Thursday, September 22, 2016

Image is Everything for Michelob Ultra

Those who follow or attempt to follow craft beer tend to see it as a monolithic movement that will eventually envelop the country and the world. That mindset more or less assumes that light beer is irrelevant and dead. An arrogant mistake.

Because light beer is far from dead. It remains a dominant force in the industry and, it turns out, is home to one of the fastest growing brands in the business: Michelob Ultra.

Let me back up. Michelob Ultra is part of the super premium segment, which is dominated by Anheuser-Busch brands and includes garbage like Bud Light Lime, Bud Light Platinum, Landshark and others. Super Premiums did well in the late summer according to IRI scans, showing the second best dollar growth trends behind imports.

And Michelob Ultra is king of the super premiums, owning the greatest share, five times larger than second place Bud Light Lime. Through early September, Michelob Ultra was up nearly 25 percent in dollars for the year. Not bad for a brand that was written off by craft fans long ago.

You may recall that Michelob Ultra isn't new. Launched during the low-carb diet craze back in 2000, it appealed to folks trying to lose weight by cutting loose calories, of which beer is a fantastic source. Ultra didn't do badly in those bygone days. But it was seen mainly as a diet beer, a motif that has never worked well in beer. That's why "light beer" was invented.

Since 2011, Michelob Ultra has been growing steadily. This has nothing at all to do with the beer, which is, contrary to ads suggesting otherwise, a pretty tasteless drink. What's changed is how the beer is marketed, who is targeted and how much money is being spent. As we know, image counts for a lot if you have money spread the word.

It is undoubtedly true that the availability of reduced calorie foods and beverages has been increasing. That category reportedly accounted for 99 percent of the sales growth for the major food companies between 2007 and 2012. Michelob Ultra is a near perfect fit for the category, a fact not lost on the marketing kids at Anheuser-Busch.

What they noticed is that fans of lower calorie, healthier foods and drinks are spread throughout the various demographic groups. In that scenario, you don't want to limit your ad imagery to older or younger drinkers. The active, healthy lifestyle used to promote Michelob Ultra targets a wide swath of people who don't want to be slowed down by "heavy" food and drink.

They have backed up that thinking by spending more to promote the Ultra brand, though what they're spending pales next to what they spend on Budweiser and Bud Light, brands that are tanking badly. They've managed to create an image that appeals to active, educated, and perhaps more affluent and mature folks. In short, things many of us would like to be.

The Michelob Ultra growth train shows no sign of slowing, which proves you don't have to have a great product if you can devise and execute a smart and effective advertising campaign. More than anything else, that's what Anheuser-Busch has done with Ultra. Kudos to them. They aren't stupid, by any means.

In fact, Michelob Ultra is likely to gain traction as millennials get fat and begin to seek low calorie alternatives to their 7% IPA. Could craft brewers enter the fray? Certainly, they could produce light beers to compete with crap like Ultra. What they don't have is the money to support a national ad campaign, upon which the success of Ultra is largely based.

Sometimes image really is everything.

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