Business - Bud's sibling launched

The Bud family tree is getting bigger. Anheuser-Busch is releasing a sibling to Budweiser this week, tweaking its second-biggest brand and the company’s oldest existing beer. The new Budweiser American Ale, hitting bars on draft this week and in stores soon in bottles, is a hoppier, more amber-coloured version of its older sibling — a lager — which is second only to best-selling Bud Light.

The largest the USA brewer hopes the ale will woo new drinkers who may not have reached for the brand before, said Dave Peacock, vice president of marketing for Anheuser-Busch Cos Inc. It also can draw attention to the fact that the original Budweiser, which dates to 1876 and which the company calls “The Great American Lager,” is just that, he said. “We have to reinforce that more,” he said. “We have to appeal to a large group of consumers and it raises the image of the brand.”

Beers are primarily ales or lagers and then there are variations within that. Lagers, the dominant type of beer among big The USA brewers and in other countries, take longer to brew than ales. They are brewed at cooler temperatures and ferment at the bottom of the tank. Anheuser-Busch’s move is part of its strategy to innovate off of core brands Budweiser and Bud Light, which is also a lager. The value of those brands is one of the reasons Belgian brewer InBev cited when it said this summer it would buy Anheuser-Busch for $52 billion.

The push to spin new products off staple brands comes at a time when large, domestic brewers, including No 2 player MillerCoors LLC, are going after drinkers who are increasingly snubbing big-name brands. These drinkers are looking for more variety and niche products, often from craft brewers. MillerCoors had hoped to release a trio of craft styles of top-seller Miller Lite nationally this fall, with an ale among them. But the company has since backed out of that, saying it needs to rethink the effort. “All the big brewers are looking for ways to break into the craft business and ales are obviously a big part of the craft success, so why not?” said Eric Shepard, Executive Editor of trade publication Beer Marketer’s Insights.

Well-known craft brewers like Sierra Nevada and New Belgium both have ales among their brands, such as Sierra Nevada Pale Ale and New Belgium’s Fat Tire Amber Ale. Craft beers are a tiny part of the beer market, with about a 4.5% share, Shepard said. By comparison, light beers make up about half the market. But crafts are growing faster than the overall market, about 7% compared to about 1%.