AB InBev’s Natural Light enters vodka category

Dive Brief:

• AB InBev’s Natural Light is entering the vodka category with the launch of Natural Light Vodka, the company said in a statement.
• The product, with a 30% alcohol by volume content, will be available in three flavors: Lemonade, Strawberry Lemonade and Black Cherry Lemonade. They will be sold in 750 ml and 50 ml bottles.
• Beer giants like AB InBev and Molson Coors have turned to other forms of alcohol like spirits to help boost sales. In announcing the new item, AB InBev said flavored vodka is one of the fastest growing segments in the spirits category.

Dive Insight:

Natural Light, or Natty Light as the brand is famously called, has a reputation as a cheaper offering in the alcohol category. Despite its place, Natural Light has carved out a valuable niche for AB InBev, and one the company has worked to build on in recent years by latching on to growing trends.

With Natural Light Vodka, AB InBev touts its product as being “easy-to-drink,” with popular fruity flavors. Two years ago, AB InBev introduced Natural Light Seltzer in a bid to attract college-age fans of Natural Light and further tap into the expanding hard seltzer category. The product first was available in two varieties, peach-mango and black cherry-lime, but has since expanded to other flavors. 

“The interests and taste preferences of consumers are constantly changing. They are not always going to eat and drink the same thing all the time, and they like to explore new flavors,” Daniel Blake, group vice president of marketing for Budweiser & Value at Anheuser-Busch, said in an email. This product helps Anheuser-Busch “expand its portfolio to meet evolving consumer preferences and drinking occasions.” 

Natural Light was introduced in 1977 as Anheuser-Busch’s first reduced-calorie light beer. It is currently the sixth best-selling beer in America, according to the company.

Rather than just keeping it focused only on beer, AB InBev has positioned Natural Light as a brand that offers the consumer a low-cost option with a premium halo attached to it with the addition of vodka or hard seltzer. Other offerings that have been added to the lineup recently include Naturdays Frozen Icicles, Natural Light Sour Seltzers and Naturdays Pineapple Lemonade.

“As we look to meet the evolving needs and tastes of our fans, we will continue to push the envelope with product innovations,” Blake said. “With each innovation we get closer to our long-term strategic goal of becoming the preferred alcohol beverage brand for young LDAs (legal drinking age adults), not just the preferred beer brand for them.”

The vodka category as a whole has been gradually increasing for years, bucking the downward slide that has impacted beer for years. In 2020, nearly 76.8 million nine-liter cases of vodka were sold, an increase of more than 30 million cases from 2004, according to data from Statista.   

Alcohol giants like Molson Coors and AB InBev are moving aggressively into spirits, hard seltzers and other offerings to juice growth. Molson Coors Beverage partnered with Casa Kosmos Beverage Group in January to distribute its 100% blue agave tequila-based cocktail, Superbird. 

The alcohol category is notoriously trendy. With categories like beer continuing to generate billions of dollars in annual sales, others come and go. Hard seltzer, which until recently was posting triple-digit annual growth, received a shock in July when Truly maker Boston Beer said it overestimated demand. It prompted some analysts to warn that while the category will continue to post strong growth, the next few years will most likely see 20% to 40% annual increases.

Alcohol makers have little choice but to find new ways to boost sales, and one of the most effective ways to do that is to tap into the market recognition of an already well-established brand. Beverage giants like Coca-Cola and PepsiCo have done just that in a bid to enter the alcohol space. Coca-Cola took its Topo Chico mineral water and partnered with Molson Coors to create a hard seltzer brand; and PepsiCo announced this month it was working with Boston Beer to launch a Hard Mtn Dew alcoholic offering in the U.S.