Dive Brief:
- Anheuser-Busch’s Michelob Ultra brand announced it is adding Michelob Ultra Pure Gold, which is made with organic grains, to its lineup, the company said in a statement.
- Pure Gold has slightly fewer calories and carbs (85 calories; 2.5 carbs) than the original Michelob Ultra at 95 calories and 2.6 carbs. It contains no artificial colors or flavorings.
- The product will leverage the same marketing angle as Michelob Ultra, aiming the brand at millennials who have active, healthy lifestyles. World Surf League Champion Kelly Slater has partnered with the brand for promotional purposes, and Michelob Ultra Pure Gold will sponsor of The Founders’ Cup of Surfing in May.
Dive Insight:
Michelob Ultra has a significant amount of momentum right now, riding year-over-year sales growth of more than 11%. It’s evident that parent company AB InBev is taking advantage of this bright spot by extending the line into the growing organic market.
Earlier this year, the Washington Post reported that Budweiser lost its position as one of the top three beer brands sold in the U.S. for the first time in decades. At the same time, the paper said Bud Light, the best-selling beer in America since 2001, retained the top spot.
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The Michelob Ultra Pure Gold launch comes not only an opportunistic time for AB InBev, which could use a sales star, but also for consumers who are increasingly demanding organic products. The Organic Trade Association reports that organic food sales were up more than 8.4% percent in 2017 to a record $43 billion, and now represent more than 5% of total food sales.
Beer hasn’t always been on the forefront of this trend, and the Brewers Association doesn’t even measure organic beer sales. AB InBev’s marketing and distribution muscle, however, could quickly change that narrative.
There are plenty of signs that the demand exists. For example, Food Republic reported the inaugural North American Organic Brewers Festival in 2003 attracted about 2,000 people. By 2015, the event drew 12,000 individuals. In addition, U.S. organic beer sales skyrocketed from $9 million in 2003 to $92 million in 2014, the publication said.
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Consumers have indicated they want more diversity in their beer choices, as illustrated by the craft brew category’s rapid growth in the U.S. As craft beer moves toward an inevitable saturation point, organic beer can provide another area of growth. A brand could make an organic version of their beer, further extending the reach of the product while potentially attracting new customers who look for organic in the food and beverages they purchase.
“Organic as a trend is something we’ve been watching and we felt like there was an opportunity for us there because currently there’s not a mainstream, big brewer producing a premium light beer that’s made with organic grains,” Azania Andrews, Michelob Ultra’s vice president, told AdWeek.
The question that remains for Pure Gold is whether or not the higher cost that comes with using organic ingredients will affect the cost of Pure Gold and if consumers will be willing to pay that price. Still, AB InBev is smart to roll out an organic brand of Michelob Ultra as big beer makers, desperate for growth, need to find new ways to attract and retain customers in a marketplace where preferences and tastes are rapidly changing.
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