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Anheuser-Busch Begins Testing Spirits Market

The company rolls out a liqueur product as it faces sluggish sales in its core beer business.

November 08, 2005|From Reuters

Anheuser-Busch Cos. on Monday said it was making its first move into the spirits market as the largest U.S. brewer, facing sluggish sales in its core beer business, looked into other alcohol offerings.

Long Tail Libations, a wholly owned subsidiary set up in September, has begun test marketing Jekyll & Hyde -- a product composed of two liqueurs in separate bottles meant to be poured together. The product targets consumers in the 21- to 27-year-old age group.

But one investor called the effort "too little too late" and a branding consultant said the going could be tough in the spirits category, where well-established brands were generally upping their marketing spending.

Anheuser-Busch's move comes at a time of sluggish sales and profits for beer makers as consumers' tastes have shifted toward cocktails and wine. This has forced Anheuser-Busch to offer multiple discounts that hurt profit.

The subsidiary has started testing the liqueur product in about 40 retail locations in Orlando, Fla; Columbia, Mo.; Denver; and Las Vegas. The test marketing began Nov. 1, Anheuser-Busch said.

The product consists of two liqueur bottles. Jekyll is a sweet, scarlet-red spirit tasting of wild berries and Hyde is an herbal-tasting black spirit that floats on top when poured over Jekyll. The two products are meant to be served together, although consumers can drink them separately, the company said.

"It seems like a specialty product. The product, without tasting it, seems a little weird," said Alan Siegel, chief executive of Siegel & Gale, a strategic branding firm.

"The liqueur category is so jammed already," he added. "It is very difficult to be successful."

Shares of Anheuser-Busch rose 48 cents, or 1.2%, to $42.35.

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