Appealing mostly to female consumers and younger consumers of legal drinking age (LDA), the flavored malt beverages (FMBs) — also known as progressive adult beverages (PABs) — segment of the beer market brings in a slightly different demographic than the typical beer drinker, says Jeff Nowicki, chief strategy officer at Bump Williams Consulting Co., Stratford, Conn. “The beer category is so male dominant that anytime we’re attracting a younger, female drinker in that order, that is the meat of the demographic,” he explains.
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The sweeter flavor profiles of FMBs make them easier for these consumers to approach and enjoy, adds Edward Hyseh, U.S. research analyst for Chicago-based Euromonitor International.
These demographics are not the only groups with a sweet tooth, though. African-American consumers tend to gravitate toward beverages with sweeter flavor profiles, so the FMB consumer base also tends to skew African-American, says Danelle Kosmal, vice president of client services at New York-based Nielsen. Similarly, the flavor options within FMBs present opportunities to attract Hispanic consumers as well, she notes. This growing consumer group also presents opportunities for FMB segment growth, she adds.
The U.S. Hispanic population currently contributes nearly 33 million LDA consumers, providing an important consumer base for adult beverages in general, according to Chicago-based Technomic Inc.’s “Special Trends in Adult Beverage (TAB) Report: Hispanic Consumer Insights.” By 2015, Hispanics will account for 15 percent of the total U.S. LDA population; by 2045, one-quarter of the U.S. LDA population will be Hispanic, it reports.
The FMB segment also is gathering growth from new product and brand extension launches, Nielsen’s Kosmal points out.
St. Louis-based Anheuser-Busch’s Bud Light “Rita” portfolio topped Chicago-based Information Resources Inc.’s (IRI’s) list of top-selling PABs for the 52 weeks ending Dec. 29, 2013, in total U.S. supermarkets, drug stores, mass merchandisers, gas and convenience stores, military commissaries, and select club and dollar retail chains. The Bud Light family broke into the FMB segment with the launch of Bud Light Lime Lime-A-Rita in April 2012. “In less than eight months, [Bud Light Lime Lime-A-Rita] became the leading flavored malt beverage brand on the market, selling more than 500,000 barrels,” the company said in a March 2013 statement.
The brand followed up on this success and launched Bud Light Lime Straw-Ber-Rita in March 2013, followed by Bud Light Lime Cran-Brrr-Rita, a limited-edition winter version, last November. Together, these three “Rita” products garnered nearly $462 million in sales in the 52 weeks ending Dec. 29, 2013, IRI reports.
Bump Williams’ Nowicki says the lineup’s popularity is based on two major factors. “They capitalize … on a flavor profile of the largest consumer mixed drink using the ’Rita,’ and then they put the influences of a big brewer who can get it to the shelf,” he says. Plus, because the products are packaged in 8-ounce cans as opposed to the typical 12-ounce beer can, the brand offers less liquid at a higher price point, making it a strong financial performer, he adds.
The popularity of these FMBs, particularly among non-beer drinkers, is encouraging Anheuser-Busch to continue experimenting with its “Ritas” line, the company said in a statement. It announced at a trade media day last fall that the brand will add Raz-Ber-Rita and Mang-O-Rita to the FMB lineup this spring.
MillerCoors followed a similar path with its Redd’s brand, which it classifies as a beer, however some market research firms track it as an FMB. After sales of its Redd’s Apple Ale exceeded expectations following its nationwide launch in February 2013, according to a press release, the Chicago-based company released Redd’s Strawberry Ale last September. The strawberry version also had a strong start and helped the brand gain incremental shelf space, the company said in a press release. Together, the Redd’s brand family ranked fourth among IRI’s list of top-selling PABs for the 52 weeks ending Dec. 29, 2013. The products garnered a total of nearly $152 million in IRI-measured channels, reflecting dollar sales growth of approximately 56,777 percent compared with the prior-year period, it reports.
The success of these and other FMB products boosted the entire segment 41 percent in volume and 1.1 market share points last year, Nielsen’s Kosmal says. As the flavor innovation and the beer-cocktail mixes of the segment continue, FMB brands can expect to see continued growth in the future, she says.