Energy Beers Boost Brewing Industry

ByABC News
July 11, 2006, 4:33 PM

July 12, 2006 — -- For centuries, cracking open a cold one has been the cue to kick back and relax. Now brewers hope Americans will take to a cold beer designed to rev up rather than slow down.

Energy beer, a fusion of traditional ale and caffeine, is the latest craze to hit the beer industry.

Last week SAB Miller announced it would buy McKenzie River Corp.'s Sparks, a caffeinated alcohol malt beverage with ginseng, guarana and taurine.

The orange-colored brew was the first of the new energy beers to hit the market and has been credited with spawning a new breed of beer and opening a new market for beer brewers worldwide.

"Sparks was the innovator and creator of energy beer," said Pete Marino, a spokesman for the Miller Brewing Company. "The category didn't really exist before Sparks came out."

In the two years since its 2003 debut, Sparks saw an annual growth rate of more than 100 percent. When the drink took off, brewers took note and the number of energy beers hitting the market has increased steadily.

In early 2005, Anheuser-Busch introduced BE (pronounced B-to-the-E), a caffeine-infused beer with a blend of herbal stimulants. The company later launched Tilt, a malt beverage enhanced with caffeine and fruit flavors. In May the Miller Brewing Company released Mickey's Stinger, a malt liquor that packs more caffeine than a cup of coffee.

Though the segment is new and fairly small -- experts say it might constitute 1 percent of the almost $9 billion beer industry -- its triple-digit growth rate is enticing. While sales of domestic beer lag and growth in light beer idles, energy beer booms.

"The growth potential is a lot steeper in this category than it is in other categories," Marino said. "It's an extremely attractive segment right now."

The trend confounds traditionalists. Sachin Kulkarni, a self-proclaimed beer aficionado, cringes at the thought of energy beer.