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Malternatives Prepare for Ad Blitz

UBS Warburg beverage analyst Caroline Levy Estimated on Thursday that "malternative" manufacturers will spend $450 million in television advertising this year.

This marketing push will likely double the market share of these products from 2 to 4 percent by the end of 2002. Domestic brewers such as Anheuser-Busch and Miller Brewing Co., facing a relatively stagnant beer market, are hoping to grow share with the new malt-beverage lines. Partnerships forged by the brewers with distillers have helped catapult the products to market through the use of well-known brand names.

"Our ads [for Bacardi Silver] were designed to leverage the sophistication of the Bacardi brand," Anheuser-Busch's Dave Peacock told the Financial Times.

Retailers can expect a stable, high-profile promotional environment for the products during 2002 and possibly for the duration of the partnerships. Facing a renewed ban on television advertising, distillers such as British group Allied Domecq, which is launching Stolichnaya Citrona and the tequila-flavored Sauza Diablo in a partnership with Miller Brewing Co., are pitching significant funding into the campaigns as well.

"The advertising will certainly build the profile of the malternatives, but at the same time it will complement the marketing of our spirits products," said Chris Swonger of Allied Domecq.
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