Like the diet trade, the beer business has bred a lot of fads.
Remember 'ice' beer's glory days, or how about 'dry' beer? And what are either of them anyway?
Chicago-based MillerCoors is trying to prove that its new brew — sort of a diet beer — is no fad, and so far its sales momentum continues to increase. The company's MGD 64, which has just 64 calories, has been one of the biggest success stories in the beer world over the past year.
Archrival Anheuser-Busch has taken notice, this month launching Select 55, a 55-calorie brew that it touts as the world's lowest-calorie beer. The beer giant so far is just testing the super-low-cal market, debuting Select 55 in 15 metro areas, including Chicago and Peoria, Ill. If it goes full-tilt with a national rollout, history indicates Bud is the best bet to eventually lead the low-cal market.
But the absence of an immediate national blitz for Select 55 may stem from wariness that the brew might eat too much into the sales of other lower-calorie Anheuser-Busch brews, beer industry analysts say. And they say that's exactly what's happened at MillerCoors with MGD 64.
'Yes it has been a success, but at what cost?' said Ann Gilpin, an analyst a Morningstar Inc. 'Where does the (MGD 64) consumer come from and what is this consumer not drinking? The answer is Miller Lite,' she said, pointing to Lite's sinking sales in recent quarters.
Other analysts, while concerned about MGD 64 cannibalizing Lite, credit the new brew for bringing new customers to MillerCoors. And MillerCoors dismissed the idea that MGD 64 is hurting Lite, one of its flagship products.
Most of MGD 64's sales come from consumers who normally don't drink much beer but are drinking more now because they can choose an ultra-low-calorie brew, said Sharon McLenahan, senior director of heritage brands at MillerCoors. 'The vast majority of the (sales) volume has been incremental.'
MGD stands for Miller Genuine Draft, and 64 replaced the weak-selling Miller Genuine Draft Light, a conventional light beer. MGD 64 has 32 fewer calories than Miller Lite and 79 fewer calories than Miller Genuine Draft. It also has less alcohol: 2.8 percent compared with 4.2 percent for Lite.
MillerCoors launched the super-low-cal brew last September, aiming it at consumers who 'are watching what they are eating or drinking' and 'live an active lifestyle,' McLenahan said.
While acknowledging MGD 64 might particularly appeal to women, 'it's not really a gender deal.' Ads for the beer focus on its low calorie count, with some featuring people in a bar ordering a 64-calorie margarita or glass of wine and getting a meager portion.
By early August, MGD 64 had racked up $100 million in sales, and that figure from market researcher Information Resources Inc. covers only conventional supermarkets, convenience stores and drugstores, not liquor stores and big discounters like Wal-Mart.
Harry Schumacher, publisher of the trade publication Beer Business Daily, said there's still skepticism in the beer industry about whether very-low-calorie beer might be a fad, but he doesn't think that's the case and that MGD 64 has ushered in a new and lasting market.
'This is real,' Schumacher said. 'Nobody really knows what ice beer or dry beer is.' However, MGD 64 and Select 55 are clearly definable as low-calorie alternatives, he said. 'Despite diet crazes coming and going, there is a huge amount of people who are counting calories very seriously.'