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You are here: Home / General News / Low-Carb Beer – The Next New Category

Low-Carb Beer – The Next New Category

October 24, 2003

nheuser-Busch’s newest beer wasn’t targeting your typical beer drinker in its advertisements, which featured healthy-looking trim young folks working out. Michelob Ultra’s national launch of low-carb beer, now a year old, addressed a new market consisting of people on the popular Atkins-style low-carbohydrate diets who still want to enjoy a glass or two of beer. The beer found its niche, and then some: A-B’s second-quarter earnings were up 7.9%, and Michelob Ultra figured prominently in the results.

Light beers have been a growing segment for years now and hold about 45% of the domestic beer market, with three main players – Bud Light, Coors Light, and Miller Light – making up 70% of the light beer segment. A-B’s Ultra had a built-in problem during development: whatever else it did, the brewer didn’t want it to cut in to Bud Light’s sales. A very important component of A-B’s success over the years has been its strategy and ability to protect its core brands when introducing a new product. Unlike both Coors and Miller, A-B had little cannibalization of Bud when it first introduced Bud Light. Now, Michelob Ultra is successfully being launched by creating a whole new marketing category, taking advantage of the current popular low-carbohydrate diet trend. The brand is part of A-B’s super premium Michelob brand line, and the brewer charges a slightly higher price, about a dollar more for a 12-pack of Michelob Ultra compared to Bud Light. What little sales Michelob Ultra took away from Bud Light and Michelob Light was compensated to A-B in the form of increased market share over the brewer’s competition. The beer certainly qualifies as “light,” with just 95 calories and 2.6 grams of carbohydrates per bottle, well below that of other light beers – Coors Light weighs in with 102 calories and five grams of carbs; Bud Light has 110 calories and 6.6 grams of carbs; and Miller Lite has 96 calories and 3.2 grams of carbs. The growth potential of such a market segment is irresistible, and other brewers are introducing similar brands. Rolling Rock, owned by Brussels-based Interbrew, is releasing low-carb Rock Green Light beer, with 92 calories and 2.6 grams of carbohydrates. A-B won’t be sitting on its laurels while this goes on. Marketing strategy includes expanding Michelob Ultra outside of the U.S.; Michelob Light has been launched in the U.K.

While the low-carb category seems almost certain to stick, the question will be whether or not imports – and perhaps even craft – will jump in. Imports, probably. Craft maybe. Boston Beer has had surprising success with their light beer addition. And a few brewers from the old regional ranks may be looking to add a low-carb beer, further cluttering the shelves. What little space may be given up by the declining malternative’s will quickly be filled. Such is the nature of the business. One thing that is likely – look to low-carb beers to last longer than the quick fad of “ice” beers.

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Pat Hagerman

Posted by Pat Hagerman

Pat Hagerman is co-founder of ProBrewer.com. When he's not leading operations for ProBrewer you can find Pat working on Internet of Things (IoT) infrastructure and systems. If you're having a beer with him ask about some of the more original skills he's taught Alexa.

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