Hurdling beverage alcohol barriers, New Orleans-based Sazerac Co. has teamed with Anheuser-Busch InBev (ABI) to extend two liqueurs—the whisky-based Fireball and the fruit-flavored Southern Comfort—with malt-based variants to propel them into thousands of new retail accounts. In New York and Pennsylvania, spirits can only be purchased off-premise at liquor stores, and the new strategy is ruffling some retail feathers.
“The liquor store owners are very upset,” says Michael Correra, executive director of the Metropolitan Package Store Association and owner of Michael-Towne Wines & Spirits in Brooklyn, New York. “It’s an assault on our business. I’m not thrilled to see a product that’s pretty high proof and packaged to look like a liquor bottle next to Kit Kats, Tic Tacs, and throat lozenges that children pass by.”
Sazerac, who declined to comment for this story, joined forces with ABI last August to collaborate on the 16.5%-abv Fireball Cinnamon and 20%-abv Southern Comfort. The plan shifted into full swing this spring with ABI flexing its powerful distribution network to push the malt-based renditions into thousands of stores selling beer. ABI’s exclusive distribution agreement with Sazerac contributed to the brewing giant doubling its revenue in the first quarter of fiscal 2021, ended March 31, compared to the same period last year. In New York, there are 3,331 off-premise liquor licenses compared to 16,125 stores with licenses to sell beer, according to the New York State Liquor Authority.
The reformulated Fireball and Southern Comfort began appearing this spring in New York beer stores, convenience stores, delis, bodegas, and gas station minimarts. The products are positioned near cash registers, candy shelves, and lottery ticket machines, in either clear plastic buckets on sales counters or in bright display cases. In grocery stores, big standalone, eye-catching display cases near the beer or ice cream sections. Prices range from $1 a 1.7-ounce bottle and $8 a 12-ounce container. They are also sold in 10-packs of 1.7-ounce miniatures ($12 to $15). A 1.7-ounce serving of 16.5% abv Fireball equals 46.75% of a “drink-equivalent,” defined as 1.5 fluid ounces of 80-proof distilled spirits, 12 ounces of 5%-abv regular beer, or 5 ounces of 12%-abv wine.
In Pennsylvania, the No. 2 control state by spirits volume, the malt-based Fireball offering is sold in establishments with retail malt beverage licenses. Fireball X Apple and Fireball X Lemonade (both 10% abv) are slated to be launched this fall (price to be determined) in Pennsylvania in 16- and 25-ounce containers. In Ohio, Fireball 42 Proof ($1 a 50-ml. and $2 a 100-ml.) has catapulted the brand into 6,000 new beer retail accounts, where it’s allowed to be sold due to its lower abv compared to the 66-proof original offering. Oregon is the only state where Fireball Cinnamon is wine-based and it’s being sold in retailers with off-premise licenses, such as grocery and convenience stores, as well as beer and wine shops.
“Brewers blurred the marketplace with hard seltzer and taking from the distillers. They are making it work as a malt-based product,” says Rob Mellion, executive director of the Massachusetts Package Stores Association. “Distillers are introducing malt-based products that can be sold with malt and wine licenses.”
Sazerac’s malt-based spirits brands are being introduced in test markets in Massachusetts package stores along the New York border. “They are going to be in Massachusetts soon,” Mellion says. “ABCs will have to take a hard look. Technology is getting ahead of regulations and allows these products to be sold anywhere. People will buy their lottery tickets and Fireball. By the time legislators get around to it, they will be in the market space for a couple of years. It’s a money grab, and it’s not going away.”