AB InBev unveils new Bud 66, the iPhone of lagers

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Britain's hip, young iPhone generation is the lucrative target audience for AB InBev's latest lager launch Budweiser 66.

The beer giant revealed the new product exclusively to The Grocer this week and claimed Budweiser 66 or Bud 66 would become the biggest-selling beer innovation of 2010 after it hits shelves at the end of August.

The brewer said the 4% abv lager was named after the vat number selected for the new brand, adding that it expected drinkers to also associate the name with the American image of Route 66.

AB InBev has made the lager sweeter and less carbonated than standard lagers, claiming the target audience of "brand-savvy" 20 to 30-year-olds wanted an easy-to-drink lager that didn't leave them feeling bloated. Bud 66 would tempt them back to lager from cider and spirits, it predicted.

Available in 300ml bottles and 500ml can multi-packs, Bud 66 would be priced roughly 10% to 15% higher than other 4% lagers, including stablemates Becks Vier and Stella 4.

The pricing strategy was designed to boost sales value in the lager category, said AB InBev UK president Stuart MacFarlane, who was confident younger drinkers would not be deterred by the price premium. "This generation is willing to pay more for quality," he said. "Look at iPhones even though they are expensive and have higher tariffs young people still buy them over normal mobiles. They don't see the beer category as a commodity category and will pay more for the right brand."

Over the past year, sales of lager have increased 2% in value to £2.9bn, with volumes dipping 1% [Nielsen 52w/e 20 March 2010]. Premiumisation was an effective means of protecting the category, said MacFarlane.

"We have a great track record with launches, and innovation in beer is something our customers want more of. Budweiser is the right brand to extend from it has more of a social and engaging brand image for younger consumers compared with Stella or Becks. It recorded a 19% volume growth in 2009 compared with 2008, so we're extending from a position of strength."

Although Budweiser is the official beer of this summer's World Cup, MacFarlane said Bud 66 would not be associated with the 1966 England World Cup victory.

"The tournament will be over by the time we launch. Who knows, if England win maybe we should call it Bud 2010," he joked.

The launch will be supported with an above-the-line media push.

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