‘Young, free and flavored…’ A booming world beer category

By Ben BOUCKLEY

- Last updated on GMT

The latest successful addition to AB InBev's Bud Light Lime-A-Ritas line
The latest successful addition to AB InBev's Bud Light Lime-A-Ritas line

Related tags Beer

Flavored or mixed beer is a booming US beer category tapping demand among younger drinkers – and strong global growth prospects are set to heighten competition among the big brewers. 

Amin Alkhatib, alcoholic drinks analyst at Euromonitor International, told BeverageDaily.com that he wasn’t surprised by Heineken’s slated April launch of Dos Equis Dos-A-Rita​, announced last week.

“Flavored/mixed beers have changed from being an anomalous category in the spectrum of alcoholic drinks to a delimited category in their own right,”​ he said.
Euromonitor International predictions put CAGR volume growth for the category at 4% (2014-18), the second-highest behind non/low alcohol beer at 5%.

Heineken follows in the footsteps of Anheuser-Busch InBev (ABI) whose Ritas range of ‘Margaritas in a can’ with a dash of Bud Light have proven so successful since the first US launch in April 2012.

Booming young US category

“This is a booming young category in the US (and in other parts of the world) with a high demand among beer drinkers who are seeking something to add depth,”​ Alkhatib said.

“We should expect to see further competition from other major global brewers, as they will be attracted by this category’s high growth rate [7% volume growth globally in 2013 according to Euromonitor data]”​ he added. 

Glossing flavored/mixed beer growth in global terms, Alkhatib said: “SAB Miller and Carlsberg are already getting involved with or will get involved in this market.”

Asked if he saw major global brewers beyond AB InBev and Heineken jumping into the margarita space, the analyst said they “might not jump into the lager margarita space specifically”.

“However, the mixed beer market will begin to expand as manufacturers develop products answering to local tastes and flavors,”​ he added.

SAB Miller likely to invest in radler market?

“SAB Miller is likely to invest in the radler market and in other mixed beer ranges in Europe. Molson Coors already released their Carling Zest radler,”​ Alkhatib said.

(Strictly speaking a German radler (‘shandy’ or ‘shandygaff’ in English) is a refreshing 50:50 mix of blond lager and lemonade, although brewers are getting increasingly inventive in terms of mixers.)

“But it would not be a surprise if they develop their involvement in the lager/margarita market within their respective strongholds,”​ Alkhatib said.

The analyst explained that radlers were increasingly popular substitutes for standard lagers in Eastern Europe – due to a lower ABV and sweeter taste, which is unlocking a wider audience.

Untapped on-trade demand for higher ABV beer mixes

But he warned that a trend towards higher ABV beer mixes in the on-trade was currently untapped, and warned that the likes of AB InBev’s Bud Light Lime Lime-A-Rita would fear regulatory restrictions due to a higher alcohol content.

Brewers fear that such products could be associated with RTDs – limiting sales to squeezed lower income consumers – which is why they are likely to launch low ABV mixed beers instead to revive beer volume sales, Alhatib said.

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