Big brewers see strong potential for weak beer

Wed Jul 13, 2016 2:08am EDT
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By Philip Blenkinsop

BRUSSELS (Reuters) - Anheuser-Busch InBev (ABI.BR: Quote), which will soon make almost 30 percent of the world's beer, wants to serve more low and alcohol-free brews to drinkers trying to live a healthier lifestyle.

The Belgium-based brewer, on the verge of buying its largest rival SABMiller SAB.L, has forecast lower and zero strength beer will grow from a small base to make up 20 percent of its sales by the end of 2025.

That is a bold target. Industry monitor Plato Logic says beer of up to 2.8 percent alcohol by volume (abv) had only a modest 2.5 percent share in 2014, although annual growth was 4-6 percent versus just one percent for beer as a whole.

Brewers pioneered non-alcoholic beer in the 1980s and 1990s, with only limited success. This time they believe they have two game-changers -- sustainable consumer demand and a product that actually tastes like regular beer.

AB InBev, best known for its Budweiser, Stella Artois and Corona brands, has committed $1 billion to reducing alcohol abuse, with pilot projects to start in six cities later this year. It will spend far more than that on developing new low alcohol products of up to 3.5 percent, or "no-alcohol" products of 0.5 percent and lower.

Its latest, 0.0 percent Budweiser Prohibition Beer, launched in Canada in May as a possible prelude to its sale in larger markets.

FATTER MARGINS   Continued...

A promoter poses with a can of Budweiser Prohibition Brew, a non-alcoholic beer, while giving away free samples in Toronto, Ontario, Canada June 23, 2016.  REUTERS/Chris Helgren