Big Beer has a problem. They’re losing ground in every direction: to wine, to cocktails, even to other beers. Between 1999 and 2013, as the craft cocktail movement took off and wine made the shift from connoisseur’s beverage to everyday drink, beer’s majority stake in the global market fell from 56 percent down to 48.8 percent. During that same time, craft beer nearly tripled its U.S. market share, climbing from 2.6 to 8 percent, and thus claiming a greater piece of the shrinking beer market. The numbers may look small, but for corporations that have been dealing in multibillion-dollar margins for decades, any downward trend is a red alert.
In an effort to reverse fortunes, some Big Beer companies have tried to acquire their way out of it. Goose Island, Blue Point and Magic Hat are all breweries formerly known as craft, acquired by the major conglomerates in an effort to tap into the audience that’s walking back from the Budweisers and MGDs of the beer world. Others have sought to bluff their way into the craft beer ranks, notably Blue Moon, which is marketed as a craft beer but was developed by MillerCoors.
They’ve also consolidated down to a mere handful of major corporations, and even that isn’t enough. Anheuser Busch InBev and SABMiller control one-third of the world’s beer, and even they are rumored to be considering a merger to mitigate their profit loss and reduce the high cost of competition. Beer is a zero-sum game—and the sum’s getting smaller and smaller.
So what’s a multinational conglomerate to do? Rather than fighting for every last scrap, Big Beer companies have turned their sights outward, to the spirits industry. In 1999, the first wave of not-quite-boozy beer beverages hit with the launch of Tequiza, which aligned itself with tequila drinkers both in name and via the addition of lime flavor and “blue agave nectar,” long before agave syrup was known as a sugar substitute for the natural foods crowd. In execution, it was a Mexican-style lager along the lines of Mexico’s other beverage heavyweight, Corona. Its low (4.5 percent) ABV and candy-sweet flavor profile made it an easy joke—a Zima for a new generation—and while it hung on until 2009, Tequiza never made serious inroads with the beer or spirits crowds.
The attempted resurgence of these tequila-flavored beer “cocktails” no doubt owes something to the massive success of Bud Light’s Lime-A-Rita line, launched in 2012 and since extended to include less successfully punny flavors as Raz-Ber-Rita and Lemon-ade-Rita. The Margarita is one of the few cocktails that still thrives in its most artificial forms. The success of the Lime-a-Rita as a cocktail-flavored beverage may have been lightning in a bottle, but it’s inspired beer companies to double down on the category.
In Europe, however, a nearly identical product hit the big time: Heineken launched Desperados in 1995 with similar claims about tequila flavoring and a robust 6 percent ABV. Its continental success—due in large part to the European exoticization of Mexico and helped along by a massive club scene—convinced Heineken to attempt a U.S. launch. Currently in select Southeastern markets, Heineken touts that it’s “Crafted at the crossroads of beer and spirits techniques.” Not to be outdone, ABI is heading back to the tequila drawing board with Oculto, launching this spring. This time around, they’re hoping a higher ABV and claims of tequila barrel-aging are enough to turn drinkers’ heads.
The attempted resurgence of these tequila-flavored beer “cocktails” no doubt owes something to the massive success of Bud Light’s Lime-A-Rita, launched in 2012 and since extended to a full “Ritas” line that include less successfully punny flavors like Raz-Ber-Rita and Lemon-Ade-Rita. The Margarita is one of the few cocktails that still thrives in its most artificial forms. While it’s now possible to get a handmade Margarita with high-quality tequila or mezcal, there are just as many slushy machines spinning out frozen mixes as there were 20 years ago. The success of the Lime-A-Rita as a cocktail-flavored beverage may have been lightning in a bottle, but it’s inspired beer companies to double down on the category.
This month, Bud Light is making the most aggressive move into the cocktail kingdom yet with MIXXTAILS, whose marketing materials proudly proclaim “No bartender necessary.” Designed to mimic well-known cocktails, the MIXXTAILS lineup includes Long Island (as in “iced tea”), Hurricane and Firewalker, a cinnamon-flavored shot at the Fireball phenomenon. As Bud Light Vice President Alexander Lambrecht says, “We created a cocktail-inspired beverage to quench consumers’ demand for more variety, mixology and easy, convenient cocktail solutions.”
Ironically, that’s nearly the same thing another breed of bottled cocktail makers are saying. Respected bartenders and craft spirits makers are also looking to the ready-to-drink market as a potential goldmine. As Charles Joly, formerly of the Aviary and current partner in the bottled cocktail line Crafthouse Cocktails, recently told the New York Times, “Any place where people consume adult beverages and can’t get their hands on a great cocktail, we knew we had opportunities.”
Their approach, however, hews much closer to the craft cocktail spirit. These bottled cocktail makers are essentially just batching on a larger scale, combining real spirits and secondary ingredients rather than attempting to flavor-match in Willy Wonka-style R&D departments. By attempting to recreate the flavors without using the right ingredients, companies like ABI are crucially misreading the young cocktail consumer. The very definition of the craft cocktail movement is a rejection of the artificiality that ruled the cocktail dark ages, shortcuts like sour mix that are aligned too closely with the flavored malt beverage category.
Unfortunately for them, companies like ABI are unwilling to give up the legal advantages of selling beer-based products and go into the mixed drinks business the right way. Beer is the least controlled substance under any liquor law, and comes with benefits like distribution in underage-drinker-friendly gas stations instead of tightly regulated liquor stores and being available for sale earlier in the day and on Sundays in some Bible Belt counties.
But what about real-world beer cocktails? There’s a long global tradition of modifying beer out there, from British shandies to Mexican micheladas. The big boys are trying their luck in that department too, with products like Amstel Radler and Bud Light Chelada, but are likely to fail for exactly the same reason. The very thing that makes these drinks so appealing is what makes them so difficult to manufacture; without fresh juice, their flavor inevitably falls somewhere between Lemon Pledge and nuclear waste.
Will Big Beer ever find the Golden Ticket to cocktail success? It seems that for now, bartenders are still necessary.