Is it just me or are marketers losing the plot? It used to be that if you wanted to build a strong brand, you started with an innovative product and a differentiated positioning. You did not just brand a generic product or copy another successful brand. So can someone help me understand how Anheuser-Busch is going to benefit from launching a lime-flavored version of Bud Light?

It seems obvious to me (though some marketing execs at A-B deny it , as in this story from the Wall Street Journal) that with Bud Light Lime, Anheuser-Busch is hoping to emulate Miller Chill, launched last year by SAB-Miller. Miller’s offering, a chelada-style brew flavored with lime and salt, met with a great deal of success.

In February 2008, the Brew Blog (sponsored by Miller Brewing) quoted a report from Beer Marketer’s Insights Express that  pronounced Miller Chill “the top new beer brand in supermarkets [in 2007]”. According to IRI, Miller Chill sales last year totalled $40.8 million.

The success of the brand should probably not be a surprise. Citrus flavors have always been used to produce a refreshing summer beverage, whether it is the original chelada from Mexico, lager and lime from the UK, or weiss beer and a slice of lemon from Bavaria. SAB-Miller managed to take a generic drink and turn it into a relatively successful brand – for at least one summer.

But is it a smart idea for Anheuser-Busch to try to move into the flavored beer arena?

I think not, for three reasons.

First, my suspicion is that these brews will prove more of a fad than a long run success. Over the years, many brands have pushed the alcoholic beverage boundaries, producing products such as wine coolers, “malternatives,” like Zima, and alcopops. These beverages tend to make a big splash and then dry up just as quickly. The news attracts marginal drinkers into the category who turn just as quickly to the next new thing. Worryingly for Miller Chill, many commentators on blogs and other sites compare the brand’s taste to Zima, suggesting that Chill may follow the same pattern. I suspect Bud Light Lime is going to get the same reaction.

Second, there is already a beer strongly associated with lime in the minds of U.S. consumers: Corona Extra. The brand, of Mexican origins, is associated not only with lime but also with relaxation. In his book How Brands Become Icons, Douglas Holt explains that through the Change Your Latitude campaign, Corona “authored an evocative myth that used the Mexican beach stories to imbue its beer with the idea of escaping from everyday routines.” Add to that the fact that Corona is often served with a segment of lime stuck in the neck of its clear, glass bottle and you have a ritual which firmly embeds the consumption experience in people’s minds. Today Corona Extra is a top-ten beer brand in the United States and the best-selling import. I suspect that it is going to take a lot more than the convenience of added lime to make a dent in its franchise.

Finally, I’m concerned about what the introduction of a “fruit beer” might do to the overall reputations of Anheuser-Busch and its flagship brand Budweiser. Though Miller Chill met with initial sales success, the reaction to the product among beer drinkers has been mixed. The enthusiasts have generally panned it. Shortly after Chill was launched, Rick Sellers stated on the Pacific Brew News Blog, “Calling this a good Mexican beer is the equivalent of calling Taco Bell good Mexican food.”

While I’m sure Rick meant that comment as an insult to Taco Bell, I think about his statement a bit differently. Taco Bell is a successful franchise, which sells a heck of a lot of fast food. But no Mexican would mistake it for real Mexican food.

I think that is the critical point for both Bud Light Lime and Miller Chill. Are they real beers? Are they products that beer drinkers appreciate? If not, does it not weaken the overall franchises of both Miller and Anheuser-Busch to offer them?

While Miller Chill does seem to have hit the right spot for many people, it’s not clear that it did so among real beer drinkers. Last summer, Beeradvocate.com reported that 50 percent of Chill sales came from people who typically bought wine, spirits, or other beverages, but not beer.

Reviews of Miller Chill say things like “Chill is not a bad tasting beverage. If I were at the beach or at a party and was offered a bottle, I’d gladly accept it…Chill is a refreshing drink that looks like beer but doesn’t taste like beer.” (See story at Tallahassee.com)

What then does this suggest for Bud Light Lime? According to AdAge, Anheuser-Busch execs said that the “Bud Light Lime concept and taste are off the charts with today’s consumers.” Consumers, yes. But are they beer drinkers? And what does the launch of Bud Light Lime say about the Budweiser franchise as a whole? Not only is it unseemly for the King of Beers to be a follower and not a leader, but it concerns me that they are diluting their beer credentials by dabbling in novelty beverages.

The success of Bud Light Lime is not a sure thing. It has more competition than just Miller Chill, even from within its own family. Anheuser-Busch is also promoting Bud Light Chelada (which combines Bud Light with Clamato).

If lime does prove to be last year’s flavor, then Anheuser-Busch could find that it has built short-term volume at the expense of long-term equity. MSNBC reports that Benj Steinman, publisher of Beer Marketer’s Insights, didn’t want to guess how well Bud Light Lime might be received. “But he noted that past spinoffs like Bud Ice, Bud Dry and Bud Select have all created an initial boost in sales that eventually receded.”

Mmm…seems like a recipe for confusion to me. In The Paradox of Choice, Barry Schwartz makes the case that complexity undermines consumer decision making and ultimately increases dissatisfaction. If his premise is true, then A-B may be doing themselves a significant disservice by extending their product line in this way.

A quick glance at the BRANDZ database suggests that from 2002 to 2007 there was a decline in the strength of Bonding to Budweiser and Bud Light. Maybe Anheuser-Busch should be putting more emphasis on supporting the mainstays of their franchise than chasing new volume? As Al Reis says this week on AdAge.com: “Most brands don’t need innovations; they need focus.”

So what are your thoughts on this matter? Are Miller Chill and Bud Light Lime destined to be fads or fantastic successes? Is Anheuser-Busch doing the right thing to chase niche markets at the expense of its mainstream brands? Please let us know.

This entry was posted on Tuesday, March 4th, 2008 at 11:51 pm and is filed under Brands. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Print this Page