Are Malternative Sales Going Stale?

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Aug 26, 2002
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Although there has been speculation that demand may be cooling for the new malt liquor drinks branded with hard spirit names, Jack Daniel’s is rolling out Jack Daniel’s Hard Cola with a $21 million ad campaign, reports USA Today. Ads for Jack Daniel’s Hard Cola will air during college and NFL football games on ESPN and Fox as a way to reach men.

Jack Daniel’s parent Brown-Forman and partner Miller Brewing are choosing to look at numbers from ACNielsen (RetailWire sponsor). Data through August 10 show sales of the beverages up 144 percent vs. the period a year ago, boosted by new products that have helped carve out a $1.8 billion segment and generated hopes for $10 billion in five years.

However, the segment has yet to meet beverage giants’ expectations:

  • During its second-quarter earnings conference call in July, Anheuser-Busch
    Chief Financial Officer W. Randolph Baker says, “There seems to be signs that
    the segment is peaking.”


  • Diageo, whose Smirnoff Ice introduction 18 months ago pioneered the segment,
    has not met the same success with Captain Morgan Gold.


  • Allied-Domecq, which launched Stoli Citrona and Sauza Diablo with Miller
    Brewing, expects flavored malt to be seven percent to eight percent of the
    $60 billion beer business in five years but concedes growth isn’t off the
    charts.

Moderator Comment: Are malternatives here to stay or is the segment a passing fad similar to wine coolers? [George
Anderson – Moderator
]

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