estic consumption trends, large brewers have adopted two primary strategies to reinvigorate the mature beer industry. The two growth strategies being pursued are global expansion and expansion of niche brands. These are the only two growth markets in the beer industry. This research will focus on one of these strategies, niche brands û specifically the growing ômalternativeö phenomenon. Because of the inactive beer industry, all three industry giants have launched malternative products lines, malt-based products that borrow names from upscale liquor products. Diageo launched the category in 2000 with Smirnoff Ice in a way that fueled large brewers to join the fray, but Adolph CoorsÆ Zima is a forerunner of the category and trend.
United States beer industry giants in an effort to bolster flat sales, flat consumption trends, and declining shipments have adopted the strategy of expanding niche brands by introducing malternatives. Anheuser-Busch markets Bacardi Silver, Miller-Brewing Co. pushes Skyy Blue, and Adolph Coors entered the category of malt-based beverages with Vibe. Diageo, which launched Smirnoff Ice in 2000, now enjoys 1% of the U.S. beer market with more than 25 million cases shipped in 2001 (State, 2002).
According to Beer Marketers Insights, in 2001 the malternative segment witnessed sales of more than 5 million barrels, representing approximately 2% of the nationÆs total beer sales (State, 2002). Bacardi Silver is a joint effort between Anheuser-Busch and Bacardi USA. Anheuser-Busch manufactures, markets and distributes Bacardi Silver, while Bacardi USA supplies the rum flavoring and use of its well-established bat logo. Miller-BrewingÆs Skyy Vodka malternative is a joint effort between Miller and Skyy Spirits of San Francisco. The product contains concentrate flavoring derived from spirits.
While some industry analysts predict the malternative market will level off when it reaches 3% of o...