On the marketing side, big advertising budgets sold the idea of reduced calorie beers to consumers, and light beer slowly developed into America's largest beer segment.
With the cutting of calories also came a reduction in flavor. Over the course of three decades, beer drinkers grew accustomed to consuming insipid brews, making flavorful light beers a contradiction in terms.
The vast advertising campaigns helped persuade millions of beer drinkers of the importance of sacrificing flavor for a few measly calories. Without engaging in the tired debate over the myth of the beer gut, a simple comparison is offered - most brewers offer their light beers at 30 to 40 calories less than their premium products. So the consumer takes in 110 calories with Bud Light as opposed to 143 calories with Budweiser, a savings of a few potato chips.
Amid a sea of domestic light beer powerhouses, a group of savvy foreign and craft brewers are trying to redefine the category Miller Lite built. Producers and importers of foreign light beers are tapping a market of status conscious beer drinkers who are looking for products that offer a lower calorie count. Unlike the major domestic light beer players, however, the major import brands are split between promoting the flavor of their products and selling the image of the beer on the coattails of the flagship brand.
While imported light beers have grown slowly for the last two decades, American brewers have been hesitant to fully support the release of a light beer in the specialty beer category. Recently, a handful of craft brewers of various sizes have released light beers at or near the higher price points of imported light beers. Realizing that their products cannot immediately associate themselves with the cachet that import status conveys, domestic producers are promoting their products based upon their fuller flavor.
The most noteworthy light beer release of 2002 is indisputably the slow regional launch of Sam Adams Light from the Boston Beer Company. In July 2001, the company released the new beer in the test markets of Portland, Maine and Providence, Rhode Island. The test markets have expanded recently to include Chicago, New York City, Phoenix, San Diego and Columbus, Ohio.
"The preliminary results are encouraging," says founder Jim Koch, "but it's still too early to tell because we're getting a lot of trials. Clearly, people are interested in something that says Sam Adams and light. And it's kind of an unexpected beer for some people. For other people, it's like 'why did you wait so long?' So there's kind of a pent-up interest but the main reaction I get from people is 'why did you wait so long?'."
With its new, flavorful beer, the Boston Beer Company is not targeting the conventional light beer drinker. "The basic idea behind Sam Adams Light is to revolutionize light beer drinker's expectations to how good light beer could be," says Koch. "I think there is the same kind of opportunity to revolutionize drinkers taste expectations with light beer that there was when I started Sam Adams to revolutionize people's expectations for domestic beer. When I started, if it was domestic it meant that it was watery, didn't have much flavor and was inexpensive. Sam Adams came along and blew that stereotype away saying, 'no, there can be truly wonderful American beer.' And I believe I can do the same thing with light beer."
Is Sam actually doing something revolutionary? If so, Boston has never seen such timid revolutionaries. The company is taking a very slow approach to the roll-out, and company representatives sidestep questions about the viability of a national rollout. As a businessman, Koch realizes the importance of his light beer gambit. His product must sell to the entire better beer market, not just regular craft beer drinkers. Koch is walking a tightrope between two incongruous communities - those who care about flavor and expect substance from Sam Adams products and those who prefer better beers for the status and image they convey. And Koch knows his beer will succeed or fail on the company's ability to balance on this fine line. He must sell the better beer drinkers on image, while maintaining the respect of loyal craft drinkers.
In preventing a charge of selling out to the mega-brewers, Koch has created a delicate, yet flavorful light beer. Sam Adams Light has a light brown color and consists of two row barley and the company's signature noble hops. The beer has a mild, toasted malt flavor and a substantially fuller body than both imported and domestic light beers. The beer appears to balance the divide. For devout craft fans, Sam Adams Light offers enough substance to protect the company from charges of selling out. The beer does not, however, boast so much flavor that it will turn off sensitive status drinkers, and its mild flavor may even attract some domestic light beer drinkers.
To support the product launches in different regions, the company is embarking on an ambitious set of rollout events. In Boston, the company held the launch event at the historic Locke-Ober restaurant. Among a crowd of print and television reporters, Jim Koch started it off with his regular speech about the company's history and the importance of brewing better beer. Then he started the beer tasting, which consisted of blindly comparing five light beers, including Sam Adams Light, Miller Lite, Bud Light, Amstel Light and Michelob Light. The new Sam Light solidly beat the competition, a bit unsurprising as it was visibly distinguishable from all the others.
Initial trials have not nailed down the target market for the company. "At this point it is hard to know," says Koch of the eventual market for his beer. "We're getting a lot of trials. We're getting people to try it across a wide spectrum of drinkers, from die-hard Sam Adams drinkers to die-hard Coors Light drinkers. What I don't really know is that after the trial stage is over, who the real drinkers are going to be."
Defining the eventual market for Sam Adams Light is a complex and scary challenge for the company. To support Sam Adams Light, Boston Beer is gambling hard on an expensive ad campaign, even at the expense of the flagship product. With an eye towards competition from the burgeoning malternative category, Boston Beer is supporting ads at a level 50 percent higher than any previous ads for Sam Adams Lager, according to Koch. The company hopes that the Sam Light advertising will produce ancillary benefits for core brand as well.
Along these lines, the company is also concerned with the possible cannibalization of the core Sam Adams Lager brand. According to the company, the initial trials have not demonstrated a threat to the core brand. "Less than I would have thought," reports Koch. "What Sam Adams Light appears to be doing is creating a whole new choice in light beer."
Malternatives are also creating another headache for the Sam Light rollout. The company is attempting to avoid the glut of new malternative products expected to hit stores in early to mid 2002. Company representatives expect the influx of new malternative products to cause distraction and confusion among wholesalers and retailers who are determining placement of the new products in their respective portfolios. "We are not asking wholesalers to execute a Sam Adams Light rollout at the same time as the malternative roll-outs," said Koch in a recent conference call. To avoid the new launches, Boston Beer is considering a major Sam Light launch in the second half of the year.
For 2002, the company expects that the new product launch will not add anything to profits. The company has advised its shareholders that it expects the rollout will negatively affect the bottom line, with greater losses expected following any national launch. The value of the gambit for the company is the prospect of creating a new, profitable niche. "Roughly 25 percent of regular beer is better beer, imports and crafts, meaning sold at a higher price," says Koch. "For light beer, it is probably two percent. So there is a very large potential to upgrade light beer drinkers to more flavorful light beer. Will it be 25 percent, who knows? That's a huge number and it's taken 25 years."
From imported to craft brewed, from full flavored to image savvy, the light beer segment is expanding far beyond the traditional realm of lifeless domestic beers. With the drinking public's continuing fancy with lower calorie beers, breweries are betting hard on the burgeoning light beer segment. With competition heating up among some of the biggest names in beer, the specialty light beer segment should be on everyone's watch list.
Leinie's Amber Light
From picturesque Chippewa Falls, Wisconsin, the Leinenkugels Brewing Company recently released the Leinie's Amber Light. The 110 calorie light beer is made with a blend of caramel, Munich and pale malts and is hopped with Cascade and Cluster hops to balance the beer. "Amber Light appeals to the hand-crafted beer drinkers' taste for great full-bodied beer," said president Jake Leinenkugel in a recent press release. "Leinie's drinkers should not have to sacrifice flavor for lower calories, with Amber Light they don't have to."