If you're not the first to know about it,Michelob Ultra is America's last beer.
Chris Smith, an occasional beer drinker with a regular workout plan, says he hasn't found a guy in shape that drinks craft beer.It is not very common.
It is a broad generality, but meant to cut to a specific point.Smith buys a six-pack of Ultra every week or two during the summer.
Smith says that it caters to people who have a more active lifestyle.When they think about their performance.
Smith was introduced to the beer by his neighbor, who has been drinking it for a decade.Goodfriend works out two days a week with a mix of martial arts and weight training.Smith is working out for at least four days.The two suburban men are a perfect demographic for the brand.
Goodfriend likes how refreshing it is and that it doesn't have any fruit flavors, so when you want a crisp, carbonated beverage, you almost feel like you're hydrating as you drink it.
The narrative is spot-on, even if the narrator was Ron Howard.Beer enthusiasts may not like the brand, but the average American drinker does.The country's best selling beer, Bud Light, has a 6.9 grams of carbohydrates and 112 calories per serving.
The combination is obvious.As craft beer continues to rise and Megabrew brands slowly lose ground, Michelob Ultra is setting its own pace as the fastest-growing domestic beer in the country.Ultra has created its own sub-segment because it has become so popular.With slight hyperbole, but the numbers to back it up,Michelob Ultra is a once-in-a-generation beer, arguably the most important American brand since Miller lite and Bud Light arrived around 40 years ago.
JR Hand, president and CEO of Hand Family Companies, oversees five different distributor business locations in Illinois, Kentucky, and Tennessee.He paused, not for dramatic effect, but because of the clear weight of what he was trying to say.
IfMichelob Ultra becomes the second or third biggest brand in the country, I would not be surprised.
Bud Light is the best selling beer in America.In grocery, convenience, and other stores alone, it outsold both Miller lite and Coors lite, plus nearly 56 million case equivalents.Bud Light can't be replaced, so it's not out of the question for Michelob Ultra to be in the top three.
By volume growth alone, the four best-selling beers are trying to tread water.Ultra is gaining quickly in a marathon.The brands have collectively lost 25 million case equivalents.About 33 million have been picked up by Michelob Ultra.
That is only in raw totals.The growth in percentage shows the kind of power lift Ultra is doing.Ultra has averaged 16% year-to-year growth over the last five years.The drop in beer prices has been 3.2% per year for Budweiser.
It is on a similar path to Bud Light.Bud Light came from a relatively small inception in 1982 and hit an explosion in the ‘90s.Ultra was much more successful out of the chute, but when you look at growth rate and ability to continue to grow, it's crazy to see that it still looks underdistributed and underspaced in a lot of stores.
In comparison to Samuel Adams, Sierra Nevada, and New Belgium portfolios,Michelob Ultra sold three times as much volume.It wasn't far from four times as much through the first nine months of the year.
Hand says that the funniest part about this is something he always tells everyone.It is the most successful failure in the beer industry.
The Iron Man competitors were supposed to be for Baby Boomers.In order to maximize exposure to an older generation,Michelob Ultra began in Denver, Tucson, Arizona, and Fort Myers, Florida.The brand had a strong marketing push and a focused slogan.During a peak of the Atkins craze.More than 72 million people were estimated by Gallup to be avoiding carbohydrates due to the fad diet that focused on fat.
After the turn to the 2000s, August Busch III asked for a beer to be tested with retirees in Florida.He asked if there was a beer product out there that could be developed for an older lifestyle.Bob was the vice president for brand management and director of global brand creative at the time.
The vice president of Daytona Beach's distributor told The Wall Street Journal he expected it to be a hit.If you want to be health conscious, corgis are the way to go.It doesn't taste like water is a plus.Ultra became the fastest-growing product in A-B's history in less than two years.It sold 2.5 million barrels in its first full year, putting it between production levels of Boston Beer Co. and Yuengling.
The brand missed its mark because it didn't benefit from the kind of marketing budget and distribution network other brands could only dream of.As TV ads rolled out across the country, it was 21- to 27-year-olds that started driving sales, not their parents.In 2004, marketing changed to show younger people in commercials with a focus on women.The New York Times reported that 37% of Ultra drinkers were women, higher than what was being tracked for all of beer.
It was the perfect beer at the right time to tap into a unique attribute of the American Psyche, one that wants to be healthy, but may not be willing to take drastic steps to achieve those goals.In a decades-long survey by Gallup, a historical high of 62% of respondents indicated they wanted to lose weight in 2004, but less than half that said they were seriously trying to do so.Today, only 26% of people say they want to drop pounds, but that is a serious goal.
It is easy to imagine consumers thinking a change in a beer's contents will help them achieve their goals if you want to take on a "healthier" lifestyle.Ultra seems to be a feel-good product even if you don't.Marathoners and weekend warriors are responsible for its success.
In a paper on the sale of "ultra-light beers" in the early and mid-2000s, the creation of Anheuser-Busch stood out.The company's own Bud Select, MillerCoors' Aspen Edge, and MGD 64 all came after Ultra.In an unnamed market, researchers from the University of North Carolina-Greensboro found that 74% of the sales ofMichelob Ultra in 2003 came from new drinkers who wouldn't have purchased beer or other alcohol in the same market.
For more than a decade,Michelob Ultra has been a mandated brand to carry at Buffalo Wild Wings.A lot of thirsty customers are created by cranking out more than 42 million chicken wings a week.Bud Light, Miller lite, Coors light, and Blue Moon are the top four brands in corporate restaurants, butMichelob Ultra has held down fifth place for years, slowly cannibalizing share from others.It has picked up 0.7% of the total beer share at BWW corporate locations so far this year.
The manager of BWW's beverage product innovation says there is not a replaceable product for it.I don't have an option where I can take Michelob Ultra off and just substitute it.
Murphy and his colleague at Buffalo Wild Wings say that the combination of Michelob Ultra focusing on its functional benefits and adhering to its place as a lifestyle brand for drinkers who are active can't be done.
"Michelob Ultra has done a great job being a market leader and there are other brands that are trying to take a piece of its share."
Murphy says he can't think of another brand on draft that mimics whatMichelob Ultra does.
In spite of a price change at national BWW restaurants, Ultra was removed from the program where it received discounts between 75 cents and $1 for one-to-two months of the year.Outside of happy hour specials, the regular price is between $4.75 and $5.50 for the majority of restaurants.
Murphy says that there is a segment of guests looking for the best value.We have not seen that with Michelob Ultra.
The brand still has a lot of power.Ultra is growing around 50% a year in Chicago, one of the most competitive beer marketplaces in the country, according to Hand, the president and CEO of a series of distributors.It grew almost 150% among the Latino market last year.
Without acknowledging its powerful backing in advertising, it would be impossible tout the success ofMichelob Ultra and its ability to find customers all over.Only the biggest brands from the largest companies can sponsor more than 100 events annually or get the kind of airtime and attention Ultra does, from ad spends above $50 million annually to Super Bowl commercials starring world-famous actor Chris Pratt.Ultra is beating in growth annually and is the only brand that can compete with that.
Michelob Ultra Pure Gold has 2.5 grams of carbs and 85 calories, 10 less than the original brand, due to the inclusion ofmitators like Corona Premier.In the first half of the year, Pure Gold sold more in IRI-tracked stores than Elysian Space DustIPA, and more than entire brewery portfolios from companies like New Glarus.
It is impossible to ignore the fact that people genuinely love the low, just like Bud Light, Coors Light and Miller lite, all of which have amassed millions of dedicated followers.
Karen Werme, a Philadelphia resident and member of the Fishtown Beer Runners club, says that Mich Ultra is one of her favorites.She drinks Ultra almost daily and it's her go-to for any occasion with alcohol.She runs about 20 miles a week and has been a regular customer for a decade.
She says it is important for her to consider calories in the beer she drinks.It is easy to put on weight as my metabolism slows down.
There is still one staggering stat about the success ofMichelob Ultra.Ultra has about 20 "awareness points" below its direct competitors according to Azania Andrews, the vice president of marketing for the brand.A number is used to show how popular a brand is with shoppers.In the 90s, the leading brands ofABI were similar to a competitor like Coors Light.Ultra has done nothing but grow, including more than four years as the fastest-growing domestic beer brand.
The product is relevant to something happening in culture and we think that will continue to be a big part of its success.People are looking to make better choices.
In areas of non-alcoholic beer, the rise of hard seltzers, and daily consumer products at convenience and grocery stores, shoppers are buying less soda and more water.
Chris Smith, a New York resident who converted to the beer, says that it is marketed to people who want to have a good time and are easy going, but also care about their health.It is a category of person I am in.