Malternatives Give Beer Category a Shot

Jul 30, 2002

According to the current issue of Consumer Insight from ACNielsen, sales for the 12-week period ending April 13 for the malternative category in food, drug, mass and convenience stores combined (excluding Wal-Mart data) were nearly $129 million. This sales figure is a 90 percent increase compared to the same 12-week period in 2001.

The category has strong appeal and is marketed to young adult drinkers, ages 21-34. They appreciate flavor varieties. This group tends toward the sweet taste of fruity beverages and the fizz of soda pop. Many find taste of beer too bitter and traditional wine coolers, too sweet.

Malternatives also gain an advantage in that their alcohol content comes from malt brewing, as opposed to their spirit flavoring. Products that are brewed are subject to much lower taxes than distilled ones. Unlike hard liquor, they have so far been accepted for advertising slots on television networks, which increases their visibility to potential consumers.

For retailers, malternatives are an opportunity to inject life in to the slowing growth of the overall beer category. The hard alcohol names associated with them appeal to consumers looking for a more upscale brand, which, along with increased visibility due to TV advertising, will likely produce increased sales. The variety of malternative products currently available, with more on the horizon, provides consumers with more choices. They are priced higher than beer, with a resultant opportunity to increase profits. However, they are more affordable than mixed drinks.

Moderator Comment: Are malternatives destined to recreate the wine cooler scenario where products find an initial market but then go the way of a fad?

The key to longevity for malternatives will be the continued
connection to premium brands of spirits. Wine coolers lost value in the minds
of many consumers because most of the products were not associated with a strong
brand presence that denoted quality. [George
Anderson – Moderator

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