AB InBev Starts Selling Aluminum Bud Light Bottles
Anheuser-Busch InBev NV (ABI) is rolling out Bud Light in screw-top aluminum bottles as the world’s biggest brewer seeks to stabilize the waning brand in the U.S., where consumers are turning to craft beers and other beverages.
AB InBev has invested $150 million to create the new packaging, a 16-ounce (473 milliliters) resealable light metal bottle, Luiz Edmond, the brewer’s North American president, said yesterday at a meeting with journalists in New York. The company will back up the new look with Super Bowl advertising early next year.
Consumers think the bottle is “more premium, more refreshing,” Paul Chibe, vice president U.S. marketing for AB InBev, said today at the meeting. “We need to continue to evolve what Bud Light stands for,” he said. “We’re taking our time. It’s not an easy job.”
Leuven, Belgium-based AB InBev, which gets 37 percent of earnings before interest, taxation, depreciation and amortization from the U.S., was created in 2008 when InBev NV bought Anheuser-Busch Cos. in a $52 billion acquisition. Since then, it’s been seeking to revitalize the U.S.-based Anheuser Busch’s Budweiser and Bud Light brands in the country as well as to sell more “premium” -- or expensive -- labels to support profit growth.
Big brewers are facing headwinds from high unemployment as well as competition from wines, spirits and so-called “craft” beer brands. Bud Light is the biggest beer brand domestically, and is suffering faster volume decline than AB InBev’s overall U.S. business.
U.S. beer volumes were unchanged last year as mainstream brands lost out and imports and craft beers grew, according to the Beverage Information Group, a Norwalk, Connecticut-based researcher.
AB InBev said at the time of its third-quarter earnings release Oct. 31 that the beer industry’s sales to retailers fell 2.2 percent in the U.S. in the first three quarters of the year, while its volumes declined 3.3 percent as it raised prices. Edmond said yesterday that beer volume declines were slowing, though low employment among young men, a big category of beer drinkers, is still stunting recovery, and is particularly affecting cheaper brands.
The company has been turning to packaging innovation as well as creating new takes on old names to bring Budweiser and Bud Light back to life. Last year, it introduced Bud Light Platinum, a more expensive and stronger variant to offer an alternative to spirits in clubs and bars, and Bud Light Lime Lime-A-Rita. It has started selling Cran-Brrr-Rita ahead of the holiday season in the U.S., and will make raspberry- and mango-flavored variants early next year.
These innovations have gained market share, though have slightly removed drinkers from the core Bud Light brand, Edmond said yesterday.
“Bud Light suffered a bit, and we don’t like it. We’re going to fix it.”
The new bottle uses less aluminum than traditional cans, he said, and the packaging invites drinkers to play with the screw-top, which male drinkers like, he said, with a discreet flag saying “trust me, I like it” on the bottle neck.
Bud Light did gain share in the third quarter of the year, AB InBev said, though sales to retailers fell 3.3 percent. The brand has about 21 percent of the U.S. beer market, with its next closest competitor Coors Light holding about 8 percent, the company said. AB InBev competes with SABMiller Plc (SAB) and Molson Coors Brewing Co.’s joint venture MillerCoors in the U.S.
AB InBev will also continue to look to premium brands as well as craft beers to drive profitability in the country. AB InBev, MillerCoors and Boston Beer Co. now have 50 percent of volume in craft beer and drove 64 percent of craft growth last year in the U.S., according to a note from analysts at Berenberg Bank in London. AB InBev sells beers including Shock Top and said yesterday that Goose Island, which the company bought in 2011, has benefited from AB InBev’s scale in the U.S.
“We still see lots of opportunity in beer,” Carlos Brito, the company’s chief executive, said yesterday. “We run this business for the long term.”
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