Ad Track: Beer brewers juice up their flavor varieties

NEW YORK -- It may seem heresy to purists, but flavored beers are going mainstream as brewers reach for sales growth.

The $90 billion beer industry only recently has seen a little growth after flat sales for about six years.

Meanwhile, sales of flavored distilled spirits and niche and upscale "craft" brews have shown that a splash of citrus, vanilla, berry or other flavorings goes a long way with younger drinkers.

"The name of the story is growth, and the only way to get share is to come out with something different," says Frank Walters, research director at Impact, which tracks spirits sales.

A-B's decision to flavor a flagship brand and not create a new label signals a change in attitude by beermakers.

"By putting the Bud Light name to it, Anheuser-Busch is signaling that they envision some kind of mainstream opportunity," says Benj Steinman, editor of industry newsletter Beer Marketer's Insights. "It's not just a small niche. Otherwise, they would not put the Bud Light name to it."

Miller Brewing, meanwhile, is expanding package options for its second season for Miller Chill, a light beer flavored with lime and salt. Miller decided to market its flavored light beer under its own brand name.

Sales of flavored white spirits, such as vodka, grew 60% from 2001 through 2006, the most recent year available, and are now 25% of all white spirits sales, according to Impact. Absolut vodka, a pioneer, now comes in 10 flavors, including Peppar (pepper), Mandrin (orange), Mango, Vanilla and the latest, Pears.

Niche and pricey brews known as "craft" beers have created varieties with such added flavors as raspberry, cranberry and pumpkin. Craft beer sales were up 17% in 2006 vs. 2005, while all domestic beer grew just 2%.

A-B, the world's largest brewer, began exploring flavors in 2005 but took its first swig only last spring, with Michelob Ultra in Pomegranate Raspberry, Lime Cactus and Tuscan Orange Grapefruit flavors.

Last month came Budweiser & Clamato Chelada and Bud Light & Clamato Chelada, beers mixed with Clamato Tomato Cocktail, a clam-juice-flavored, Bloody Mary-type mixer.

"The palate for consumers has broadened, and they are looking for more variety. We need to keep up with that," says Dave Peacock, vice president of marketing.

Peacock says lime will be priced at a $1 premium per six-pack over regular Bud Light. Nevertheless, he expects 20% of Bud Light lime volume to come from Bud Light.

He has no concerns about alienating the core Bud Light drinker, however. "Loyalists don't want lime beer," he says. "But about 29% of beer consumers have some form of sweeter palate."