along with fatter margins as brewers sell non-alcoholic products at the same price or more than a regular beer, because or either lower of no excise tax applying to their product. Looking at the numbers, Anheuser-Busch, which will soon make almost 30 percent of the world’s beer, wants to serve more low and alcohol-free brews to drinkers trying to live a healthier lifestyle. They have also forecasted that lower and zero strength beer will grow from its small base of production now to more than 20 percent of its sales by the end of 2025. This is a lofty goal, but looking at the industry numbers for beer sale of brews with less than 3.0 percent alcohol by volume had less than 3.0 percent market share in 2014, but annual sector growth was 6 percent versus just one percent for traditional beer sector. Anheuser-Busch’s latest 0.0 percent brew, Budweiser Pro- hibition Beer, launched in Canada in May as a possible prelude to its sale in larger markets and can be seen on the shelves of Costco and major grocers like Sobeys. According to Charles Nouwen, Anheuser-Busch Global Director for Product Development, the real test is when we put Budweiser Prohibition Beer and its radically changed brewing process through a taste test with traditional beer consumers. Nouwen said, “For lots of consumers we tested with, and even colleagues not involved in tasting panels, we fooled many by mixing some Bud and Bud Pro- hibition, trying to get them to find which was which. It was not necessarily easy for them.” Now the only questions is can Anheuser-Busch and other major traditional brewers tap into additional market share with traditional beer drinkers looking for the great beer taste without the buzz and empty calories.
By Katie Davis T op brewers like Anheuser-Busch, best known for its Budweiser, Bud Light and Stella Artois brands and SABMiller, best known for brands like Miller, Miller Lite and Foster’s are facing a rising challenge as mil- lennials look to the smaller craft brewers demanding a more regionalized, flavorful and higher alcohol product to wet their whistle. Millenials are looking for a product that is customized to their likes and the big brewers are seeing this in the numbers with limited growth of mature markets for tra- ditional brands like Budweiser and Miller that appeal to the masses. Major brewers are putting their focus on the weak beer market sector in hopes that it will rapidly expand because it is saturated that traditional markets and more or less leave the higher alcohol sector alone which is largely covered by craft brewers. This change in focus from major brewers is not about their share of the market as it is about margin. It is very clear that major brewers are looking to cater their product offering to health-conscious consumers seeking lower calorie, made from natural ingredients refreshment alternatives to standard soft drinks, water, juices and energy drinks. This is a major market sector and shows that brewers are focus on the needs of cus- tomers, but the true call is the healthy growth potential
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SPOTLIGHT ON BUSINESS • OCTOBER 2016
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