Busch teams with Bacardi to offer malt beverage

ST. LOUIS -- Anheuser-Busch is teaming up with rum giant Bacardi USA on the latest entry into the "malternative" specialty alcohol market.

Anheuser-Busch, maker of Budweiser, Bud Light and other beers, will produce, market and distribute Bacardi Silver. Bacardi will provide the rum flavor, and the companies will have an equal stake, officials said.

"With our trademark and the power that brings, and the strength of the A-B system, I think it's an unbeatable team," said Marcos Perez, vice president and director of Bacardi Beverage.

The clear rum-and-citrus-flavored beverage is aimed at competing with the likes of Smirnoff Ice, the leader in the flavored malt beverage market, Mike's Hard Lemonade and others. Sold in clear 12-ounce bottles available in six- and 12-packs, Bacardi Silver will appear in stores Feb. 18.

The drink is targeted to people ages 21 to 27, who make up just under one-third of the nation's beer/malt beverage sales. A $60 million marketing campaign will include TV, radio, print and billboard ads, along with a Bacardi Silver Web site to be launched later this month.

"That's kind of what it takes, at least in our industry, to make a splash, sustain distribution, and to get the consumer to pull the product off the shelf," said Bob Lachky, vice president of brand management for Anheuser-Busch. "The stakes are high."

Barrels of silver

With that sort of commitment from the world's biggest brewery and the top importer of distilled spirit, Bacardi Silver will jump to near the top of the malternative market, experts say.

Benj Steinman, editor of the trade publication Beer Marketers Insights, said Anheuser-Busch is conservatively expected to sell 800,000 barrels of Bacardi Silver this year. That would put it neck-and-neck with Mike's Hard Lemonade, the No. 2 malternative. Smirnoff Ice sold about 1.65 million barrels last year.

Anheuser-Busch actually entered the specialty market in 1999 with the introduction of Tequiza, a tequila-flavored beer. A year later, the company rolled out Doc Otis, a lemon-flavored malt beverage.

Lachky said both have found niches, but don't compete with the big players.

Increasingly over the last three years, fruit-flavored specialty malts are taking a larger share of the market away from traditional beers. Malternatives accounted for about 2.5 percent of beer/malt beverage sales in 2001, gaining a full 1 percent of share from a year earlier, Steinman said.