While the craft brewing segment remains the toast of the beer industry, Impact’s beer, cider and ready-to-drink (RTD) “Hot Brands” list shows U.S. consumers are also gravitating toward innovative entries that center on bold flavor profiles. An influx of new and returning flavored products helped swell this year’s list from 23 to 28 brands. Overall, 12 new labels achieved Hot Brand criteria for 2014, joined by 16 returnees, while seven winners from the previous year failed to keep pace.
Anheuser-Busch InBev (A-B) saw three of its 2013 Hot Brands—Budweiser Black Crown and Bud Light Lime Straw-Ber-Rita and Lime-A-Rita—post declines and slip from the 2014 list, but the world’s largest brewer more than made up for those absences with the addition of six fresh faces. Among them are three more members of the Bud Light Lime Ritas family: Mang-O-Rita, Raz-Ber-Rita and Apple-Ahhh-Rita. Those newcomers are joined by Cran-Brrr-Rita, which returns from last year, having expanded by more than threefold. The Ritas franchise has provided A-B with a weapon against encroachment from spirits, which have steadily stolen share from beer over the past decade. Initially intended as an “in-and-out” product, the Ritas line now accounts for roughly 25.4 million (2.25-gallon) cases in the U.S. market annually—$1 billion in sales—with the mango variant the largest single flavor at 6.9 million cases.
Dueling Powerhouses
Besides its booming RTD business, A-B also placed Hot Brand entries in the domestic beer, import and cider categories. The Belgian company and its chief rival MillerCoors introduced high-profile new products in the fast-rising cider segment in 2014—A-B’s Johnny Appleseed and MillerCoors’ Smith & Forge depleted 1.5 million cases and 1.2 million cases in their debut years, respectively. In addition, A-B succeeded in almost quadrupling the volume of its upscale Stella Artois Cidre in that product’s second year on the market.
The core Stella Artois Belgian lager also extended its Hot Brand run in 2014, decelerating slightly from the previous year on 10-percent growth to over 24 million cases. The super-premium import is now roughly 50-percent larger in the U.S. market than it was in 2011. While Stella has been a fixture on the Hot Brand beers roster, A-B’s two domestic winners—Michelob Ultra and Rolling Rock—are both returning to the list after long absences. Michelob Ultra, which has grown its U.S. footprint by about 22 percent over the past three years, was last a Hot Brand from 2002 to 2004, while the offshoot Michelob Ultra Amber earned honors in 2006. Rolling Rock, which was last recognized as a Hot Brand in 1991 and 1992, has enjoyed a rejuvenation recently, adding more than 4 million cases to its total since 2011.
Like A-B, MillerCoors has been an active player in the flavor trend. One of its counterpoints to the success of A-B’s Ritas range has been the Redd’s franchise, which got off to a fast start in its 2013 launch year and continues to advance impressively. The core Redd’s Apple ale jumped by 16 percent in 2014, while the Strawberry variant also garnered Hot Brand accolades by more than doubling to 3 million cases. New flavors for both Redd’s and higher-alcohol extension Redd’s Wicked are being launched this year. Leinenkugel’s Summer Shandy, a mix of wheat beer and lemonade, has also proved a hit for MillerCoors in the flavor segment, adding nearly 2 million cases annually from 2012 to 2014.
Beyond the flavor category, MillerCoors enjoyed a solid initial outing from its super-premium Miller Fortune brew last year, with the new launch rising to 5 million cases. The trick for the 6.9-percent abv Miller Fortune—whose marketing suggests serving it in a rocks glass like a spirit—will be to sustain the upswing in its second year.
Craft Stars
Among other domestic beer Hot Brands, three members of the high-flying IPA segment made the grade, including the flagship beer of Lagunitas Brewing Co. The Southern California brewer, which last year opened a 1 million–barrel production facility in Chicago, has seen its IPA roughly quadruple in size since 2011. Along with that fast growth, Lagunitas also made waves recently by briefly suing fellow California brewer Sierra Nevada for trademark infringement over the labeling of the latter’s new Hop Hunter IPA before pulling the suit amid a general outcry in the craft beer community.
Also representing the IPA category is New Belgium Brewing Co.’s Ranger IPA, a returning Hot Brand that accelerated to 20-percent growth last year, and The Boston Beer Co.’s Samuel Adams Rebel IPA, which depleted 2 million cases in its 2014 launch. Consumer pull within the IPA segment is so strong that many craft brewers now offer multiple expressions of the style. In January, New Belgium introduced Slow Ride, a lower-alcohol session IPA, to accompany Ranger IPA and the higher-alcohol Rampant Imperial IPA, and Boston Beer rolled out Rebel Rouser Double IPA and Rebel Rider Session IPA, both retailing for $8 to $10 a six-pack. IPAs are now by far the largest single segment within craft beer, accounting for about 23 percent of the category by value and 21 percent by volume, according to IRI.
Boston Beer has two other labels returning to the Hot Brands list for 2014. The company’s Twisted Tea has been one of the star RTD performers for years, and it’s still progressing at a healthy clip, tacking on 1.7 million cases over the past two years. But while Twisted Tea’s growth continues to impress, portfoliomate Angry Orchard cider has enlarged to nearly double Twisted Tea’s size in just three full years on the market. Boston Beer president and CEO Martin Roper recently said Twisted Tea and Angry Orchard will both see increased investment this year, and the company is considering developing a new cidery for Angry Orchard in upstate New York.
While Angry Orchard is responsible for a large part for the cider market’s recent growth, other players are also carving out solid gains. The California Cider Co.’s Ace brand is among them, leveraging flavors like Perry—which is made from apples and pears—and Pineapple to keep its audience engaged. Company president Jeffrey House told Impact last year that in addition to its association with craft and its millennial following, cider is benefiting from its position as a gluten-free alternative to beer. Heineken is also prominent in the rising category with its Strongbow brand, which transitioned from its former spot in Vermont Hard Cider Co.’s portfolio to Heineken USA at the beginning of 2013 and has continued to prosper.
Imports And RTDs
Heineken’s Hot Brands contingent also includes Mexico’s Dos Equis lager, which has recently been expanding at a rate of about 3 million cases a year, as well as the lower-priced Tecate Light. Constellation Brands, the U.S. market’s other major Mexican beer player, boasts three Hot Brands from the category. In addition to Modelo Especial, which continues to advance at a torrid pace—jumping by roughly 70 percent since 2011—Constellation is fielding two Hot Brand newcomers for 2014: Modelo Especial Chelada and Victoria. “Our beer portfolio is experiencing tremendous momentum,” Constellation CEO Rob Sands said in January, noting share gains across all market channels and ongoing advances for Modelo Especial and its Chelada extension in particular.
Rounding out this year’s Hot Brands roster are two entries from the RTD segment. Seagram’s Escapes, part of the North American Breweries portfolio, returned to the list after launching its first national television advertising campaign in two decades last year and rolling out two new flavors—Grape Fizz and Fruit Punch—as well as extending certain flavors into a 16-ounce can format. Carriage House Imports’ Sparkletini brand, meanwhile, continued its steady upward trend in 2014 and is poised to cross the 600,000-case threshold in 2015. With both industry giants and smaller to mid-size players benefiting from injecting new flavor-driven offerings into their portfolios, there’s little doubt a flurry of more beer, cider and RTD innovations will emerge as 2015 progresses.