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Anheuser rolls out low-carb beer
Brewer seeks to lure weight-conscious consumers
By Christopher Lawton
THE WALL STREET JOURNAL
Sept. 13 - The nation's largest brewer is thinking thin. Tapping into the latest dietary obsession of health-conscious consumers, Anheuser-Busch Cos. is preparing to launch Michelob Ultra, the first major beer to claim that it is low in carbohydrates.
ANHEUSER PLANS to charge a premium price for the low-carb brew, hoping to capture a larger share of the high-end beer market at a time when many consumers favor imported beers over domestic brands such as Budweiser and Bud Light.
Ultra was launched in December in test markets in Denver, Tuscon and Fort Myers, Fla., with wider distribution in May. It is set to go into national distribution later this month, priced at around $7 for a six-pack. By comparison, a six-pack of Bud costs about $5 or $6.
NO HEALTH CLAIMS
Ultra comes in a brown-tinted, longneck bottle with a blue-and-white label with silver trim. A 12-ounce bottle of Ultra has 2.6 grams of carbohydrates, compared with 6.6 grams for Bud Light. They contain the same amount of alcohol.
Anheuser-Busch, Inc., rolled out its national distribution of Michelob Ultra in September.
Carbohydrates are a group of organic compounds, including sugars and starches, that serve as a major dietary energy source. Their role in weight gain is a hotly debated subject, with some nutritionists saying excess carbohydrates play a direct role.
Anheuser won't make any health or weight-loss claims for Ultra. But there is little doubt they expect weight-conscious consumers to embrace the low-carb claim. "Watching your carbs has become the symbol of a balanced diet," says Dave Peacock, vice president, high-end brands for Anheuser-Busch, based in St. Louis. "We're following consumer trends and reacting to consumer demand." Although Mr. Peacock stresses that Ultra is not a diet beer, it has only 95 calories, making it one of the lowest-calorie beers on store shelves.
Rivals have noticed Ultra. A spokesman for Miller Brewing Co., a unit of London-based SABMiller PLC, says it introduced a low-carb beer decades ago with Miller Lite, which has 96 calories and 3.2 grams of carbohydrates per 12-ounce serving. Miller began making a low-carb claim in print ads for Miller Lite earlier this summer. A spokesman for Adolph Coors Co.'s Coors Brewing unit says they have no plans to introduce a low-carb beer.
"Low-carb in my mind is obviously important," says Fleming Whited, a 55-year old lawyer, who recently left work 15 minutes early after winning a big trial to have a beer with his partners at Ocean Deck, a beachfront bar and restaurant in Daytona Beach, Fla. He watched surfer types, attractive young women and a young businessman all drinking Michelob Ultra. For someone who enjoys drinking beer as much as he does, Mr. Whited says, the lighter the better. "I'm a big guy. If I ate a meal and drank five or six Budweisers, I'd weigh 600 pounds."
FATTER THAN EVER
Counting carbs to lose weight is a practice that has been debated within medical and nutrition circles since the 1972 publication of "Dr. Atkins' Diet Revolution." The pioneering diet book said carbs, not fats, were the culprits in making people fat. Many people lost weight following the radical diet - which permits a breakfast of steak and eggs but sharply limits fruits, vegetables and grains, all of which contain carbohydrates - some doctors and consumers dismissed it.
But after decades of counting calories and fat grams, Americans are fatter than ever. Low-carb proponents seem to have the upper hand once again. "First it was low-cal, then low-fat and now controlled-carb," says Colette Heimowitz, director of education and research at the Atkins' Health and Medical Information Services in New York City. "That's going to be the next wave."
As with the advent of ultra-light cigarettes, Michelob Ultra could lead to an entirely new segment of beers emphasizing carbohydrate content. Though the Ultra name is too common to be patented, Mr. Peacock says the word refers to the new product's taste. "It's hard to predict the beer market, but we've definitely hit a nerve with this," he adds.
Anheuser won't disclose its marketing budget for Ultra. Print, radio and outdoor ads will use the tag line: "Lose the carbs. Not the taste."
Strategically, Ultra is critical to Anheuser's bid to boost sales of higher-end beers. "It's the one area where the company needs improvement," says Bill Pecoriello, a beverage analyst at Morgan Stanley. In late August, Anheuser-Busch announced new packaging and a $50 million ad campaign to attract 21- to 27-year-old beer drinkers to Michelob, which was popular in the 1980s.
Anheuser brew masters worked for 18 months to create the product. An early stage in beer production is the mashing process, when brewers combine the grains and hops, add water and boil it down. Anheuser says by increasing the mashing process to about 3 hours, compared with 45 minutes for Budweiser, they reduced the carbohydrate content significantly.
Taste, however, is the most important factor in whether beer drinkers will embrace Ultra. John Ufheil, vice president of Daytona Beverages LLC, an exclusive Anheuser-Busch distributor in Daytona Beach, says he thinks he is going to sell a boatload of the new beer. "Carbs seem to the buzz right now if you want to be health conscious," he says. "That it doesn't taste like water is a plus."
Ad Notes ...
H.J. Heinz Co. plans to increase consumer marketing spending by more than $100 million for fiscal 2003 to maintain brand equity, to drive faster growth and to support marketing initiatives. The food-products company says marketing spending, which historically has been 3% to 3.5% of sales, will rise to 5% of sales.
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Anheuser rolls out low-carb beer
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