The market for beer in the U.S. just isn't what it used to be. As Nathan Slaughter noted last month, going into 2004, domestic annual volume growth was rising at just 0.1%. In response, consolidation has been the driving trend in the beer world. Anheuser-Busch (NYSE:BUD) and SABMiller have been on a global buying spree, while Molson and Coors recently tied the knot to become Molson Coors (NYSE:TAP).
To date, though, anemic growth in U.S. beer consumption hasn't prompted beer companies to give up on the U.S. After all, even with the volume increases inching along, the U.S. is still the beer drinking capital of the world. Of course, China is projected to eventually surpass America's consumption, but in the meantime, the U.S. still has a lot to offer companies that can capture consumers' interest.
This fact might explain Anheuser-Busch's penchant for rolling out new products in rapid succession. The company recently introduced Budweiser Select, a new beer that is low in both carbohydrates and calories. Still, as noted in a recent Wall Street Journal piece, that isn't the beer's selling point, primarily since the firm's Bud Light is low-calorie and Michelob Ultra is low-carb. Instead, the company is hoping to entice those who are not regular beer drinkers with a brew that features a crisp finish and reduced aftertaste.
The introduction of Budweiser Select, though, may not be the best idea. Admittedly, this new beer stays true to the company's roots, much more so than its B(E) drink. But Budweiser Select's secondary selling points as low-carb and low-calorie certainly seem to raise the possibility that it will cannibalize sales of Bud Light and Michelob Ultra.
Indeed, rather than going the low-carb, low-calorie route, Anheuser-Busch might have been better served to go in the other direction and cater to beer enthusiasts who are less concerned about the health aspects, much as CKE Restaurants (NYSE:CKR) has gone after burger lovers with its MonsterThickburger line. While Anheuser-Busch's drive to capture more of the U.S. market is understandable, the company's focus seems a bit off.
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
