You can be on Entrepreneur’s cover!

Looking for Mr. Goodbeer Anheuser-Busch is betting big on a new beer-but can a copycat brew make it on the market?

entrepreneur daily

Though the game of musical chairs has slowed, the global brewing business is still consolidating. Heineken and Carlsberg just agreed to divvy up Scottish & Newcastle, Britain's last big brewer. In late 2007, MolsonCoors entered into a joint venture for the U.S. market with SABMiller. Yet the largest American-owned brewery,Anheuser-Busch, continues to stand apart and alone. At a national sales meeting in April, C.E.O. August Busch IV reportedly said that an acquisition of the company would not take place on his watch. Still, rumors of a takeover have been circulating, pushing Anheuser-Busch stock to over $50 a share in May.

Anheuser-Busch has had some problems that, along with the weak dollar, give the rumors some strength. Its iconic core brand, Budweiser, continues a slow 20-year slide that has left it at roughly half of its peak sales of 50.5 million barrels in 1988. Bud is still huge (at 24.6 million barrels in 2007) and still the second-biggest brand in the market after stablemate Bud Light, but still in decline. Bud Light has essentially leveled off; at its size, any easy growth is gone. Despite millions spent to promote Bud Select, a fuzzily defined "lighter" light beer, the brand has peaked and sales are down.

"They need to get them jump-started," says Beer Marketer's Insights publisher Benj Steinman of A.B.'s core brands, echoing the sentiments of Wall Street analysts such as Bryan Spillane at Bank of America Securities, and Anheuser-Busch wholesalers.

But the big word in St. Louis has been innovate. In an effort to attract some of the attention that has driven double-digit craft-beer growth, A.B. has introduced a multitude of new brands-craft-type beers, fruity beers, energy beers-none of which have gained any serious traction. In fact, as Miller Brewing recently pointed out with barely restrained glee on its Brew Blog, while A.B. placed six brands in retail-analysis firm I.R.I.'s list of top-10 new brands for 2007 (based on supermarket sales), their combined sales didn't equal those of Miller Chill, a light beer with lime and salt flavor that hit test markets in March 2007 and punched up half a million barrels in less than a full year of national sales.

Now, innovate has apparently given way to imitate. May 5 marked the launch of the first Bud Light line extension: Bud Light Lime, "a crisp light lager beer that combines the superior drinkability of Bud Light with a splash of 100 percent natural lime flavor," according to the company's press release. The company has to find substantial growth somewhere, and Bud Light Lime, with a premium price, is a big play to do that. Although the beer was reportedly two years in the making, it's hard not to look at last year's success of Miller Chill and not see "me too" written all over Bud Light Lime.

Its launch date of May 5-Cinco de Mayo-also evokes an iconic brand: Corona Extra, the Mexican giant that is nearly always served with a wedge of lime. And, in fact, Bud Light Lime sports a Corona-like clear bottle and a lime-wedge graphic. Corona sales have weakened due to price increases and a loss of novelty, which would seem to offer opportunity to Bud Light Lime, but that opportunity comes at a price. Corona is brewed by Grupo Modelo, the Mexican brewery approximately half-owned by.Anheuser-Busch, which has been offsetting some of its losses on Budweiser and Bud Select through money reaped from the success of Corona.

Regardless of origins or strategy, A.B. needs this beer to succeed. Budweiser and Bud Light make up over two-thirds of the company's sales; Bud is still dropping, and Bud Light has hit a wall. The company has not had a solid hit since Michelob Ultra in 2002, a success that is a poor predictor for the new product. Ultra was as well-defined-a low-carbohydrate light beer-as Bud Select was not (Bud Lighter?), and Bud Light Lime is as clearly defined as a name can get. But Ultra was also a real innovation, the first low-carb beer, and it has crushed imitators. Bud Light Lime's imitator image already has some analysts concerned, notably Credit Suisse's Carlos Laboy, who wondered if Anheuser-Busch would "walk away" from the brand as it has in the past 10 years with brands like World Select and Tequiza.

A lot is riding on Bud Light Lime. It may or may not be about staving off being acquired. There is plenty of skepticism about a possible acquisition that's been rumored too many times. How big a success does A.B. need from Bud Light Lime? Steinman thinks A.B. would be happy with a million barrels. "That would be a pretty significant pop at this point," he said.

The beer's on the shelves now, and the next two months should tell the tale as reorders come in. If repeat sales are strong, and new spending on Budweiser manages to slow that decline, the outlook for Anheuser-Busch might get rosy enough to start thinking about turning the acquisition threat around and going shopping.

Visit for the latest business news and opinion, executive profiles and careers.© 2007 Condé Nast Inc. All rights reserved.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

James Clear Explains Why the 'Two Minute Rule' Is the Key to Long-Term Habit Building

The hardest step is usually the first one, he says. So make it short.

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.


Get Your Business a One-Year Sam's Club Membership for Just $14

Shop for office essentials, lunch for the team, appliances, electronics, and more.

Business News

Microsoft's New AI Can Make Photographs Sing and Talk — and It Already Has the Mona Lisa Lip-Syncing

The VASA-1 AI model was not trained on the Mona Lisa but could animate it anyway.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.