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Hard Seltzer: Should Michelob Ultra worry?

5/4/2016

 
If you think the beer business is rough, try the non-beer business.

Hard ciders--the next-new-thing just a year or two ago--are already in an accelerating decline. Same with Redd's Apple Ale. Any number of flavor extensions of Anheuser-Busch's Lime-a-Ritas--and desperate attempts at selling alcohol strength--aren't stemming that brand's precipitous decline. Hard sodas and root beers are hot for now, but the FMB (flavored malt beverage) business is notoriously fickle and--from Zima to Smirnoff Ice--quick to write boom-and-bust brand case histories. Today's alcohol-soda brands may well join the here-today-gone-in-a-few-years parade of failure. So, what's next?
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It's only a trademark now, but White Claw Hard Seltzer* is coming to market from Mark Anthony brands, the Mike's Hard Lemonade people. And it probably won't be sold as a Mike's line extension. For one thing, we think White Claw is unlikely to employ the vapid, entertainment-based ad strategy embraced by Mike's, as seen here...
How can we be so sure White Claw will go a different advertising route based on something more substantial than low-grade humor? Because, according to reports from Beer Marketer's Insights, the White Claw brand will be blessed with real and substantial product distinctiveness that can distinguish it from beer, and from other FMBs as well:

"White Claw’s key product attributes: all natural, gluten free and low carb/low sugar, plus lower calories (110 per 12 oz) than FMBs... then carbonated natural well water, 100% natural flavors and cane sugar added...."

Now, if that lash up of low-carb and low-calorie sounds familiar, it's because these same attributes, combined with a physical-exercise zeitgeist, are driving the +20% growth of Anheuser-Busch's hottest brand these days, Michelob Ultra.
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PictureCoors Light's "Me, too" ads are unlikely to slow Michelob Ultra
There's a downside to good business results. Gaudy growth numbers always attract interest from competitors. But simply grafting a me-too version of the Michelob Ultra strategy onto another brand--as Coors Light has done--is unlikely to steal much business thunder from the leader.

However, if a brand can begin with the leader's successful positioning, and then marshall its own distinctive product-based claims (we particularly like White Claw's carbonated natural well water), delivering an entirely new answer to the consumer need, success can be theirs.

​Hard Seltzer may be this kind of product: A new refreshing natural way to celebrate the end of a workout, a golf game, or a long run.

If it is, Michelob Ultra's +20% days could be coming to an end.

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*Edit: Unbeknownst to us, "SpikedSeltzer" brand ("The original") has been on the market regionally for about two years.

Here's 
their website. ​


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    The Author

    Dan Fox is a real beer guy.

    For more than half his 30-year career at ad agency, Foote, Cone & Belding, he ran the Coors Brewing account. Leading a group of dozens of advertising professionals, Dan also personally wrote the Pete Coors "Somewhere near Golden, Colorado" commercials, designed the Coors NASCAR graphics, authored sales-convention speeches, and most important of all, formulated marketing strategy for virtually every Coors brand, including Coors Light, Keystone, Killian's Irish Red and more. His proudest achievement? "Our team had every Coors brand growing at once."

    Over his advertising career, Dan was personally involved in the analysis, planning and creation of thousands of ads for a variety of products and services. By way of this blog, he freely shares his expertise about what works, and what doesn't, when it comes to selling beer.

    If you're in the beer-marketing business--or just interested in the subject--you may want to read what "HeyBeerDan" has to say.

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