How A-B Transformed the Beer Category in 2012

Lime-a-Rita a win for brewer, retailers, industry

Published in CSP Daily News

ST. LOUIS -- Arguably, the beer product category didn’t need to be revolutionized in 2012. Beer unit sales in convenience stores grew by 2.4% in 2011, with six of its nine segments seeing growth.

Still, with domestic beer up a scant 0.1% and craft beers growing by nearly 20%, Anheuser-Busch felt the need to innovate, and the result—Bud Light Lime Lime-a-Rita—led to new sales and profits for both the brewer and retailers, according to a report in CPG Matters.

The senior executives at Anheuser-Busch challenged their Bud Light brand team two years ago to develop a beverage that capitalized on the growing Asian trend of pouring beer over ice, CSP Matters reported. But the notion of “beer on the rocks” didn’t get traction in brain-storming sessions that the St. Louis-based brewer held.

“If beer over ice is a bad idea, what’s good over ice?” innovation vice president Pat McGauley told the publication about the progression of the A-B team’s thinking.  “Cocktails,” of course. And the most popular cocktail? “Margarita.”

The national launch of Bud Light Lime Lime-a-Rita was the latest addition to the growing Bud Light portfolio. Blending the flavor of an authentic margarita with a splash of Bud Light Lime, Lime-a-Rita launched as an 8% ABV margarita-flavored alcohol beverage that aimed to meet a growing demand among adult drinkers seeking sweeter alternatives.

“The question then wasn’t whether a Bud Light Lime take on the margarita would sell,” said McGauley. “The question was whether there was latent demand: Could we innovate around this Bud Light Lime Margarita idea in a way that would bring new consumers into the category and also take beer into occasions where it was typically absent? You do that and you transform categories and generate commercial success.”

And quite a success it was. In less than eight months, Bud Light Lime Rita became the leading flavored malt beverage brand on the market, selling more than 500,000 barrels. It sold over half-a-billion dollars in two years, while generating over 70% of that revenue through category expansion.

The beverage was recently named a “Breakthrough Innovation Winner” by Nielsen in its popular program that evaluates new products. The awards program recognizes new products that have enjoyed success in their first two years on the market.

Click here to read the complete CPG Matters report.