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Low carb the new name in beer game

/ Source: CNBC

Homer Simpson — watch out! It’s not enough to have a tasty beer with an edgy image. Now, brewers are pushing a new theme: Low carb is better.

“We are definitely seeing low carb, and attention to health and wellness create a real opportunity for the brewers,” says Andrew Conway of Credit Suisse First Boston.

It’s also breathing new life into Miller Lite.

After years of slumping sales, Miller’s reversing that trend by marketing Lite as low in carbs.

“This is the first time we’ve seen some vibrancy in this brand, and in talking with distributors they tell us that increasingly people are picking up that brand when they make bar calls,” according to Marc Cohen of Goldman Sachs.

Miller Lite is hammering the low-carb message because a 12-ounce can has just over three carbs, which is less than Coors Light, half of Bud Light, and well below the king — Budweiser.

Miller Lite’s approach is helping win market share back from Bud Light, which dominates the category with roughly 60 percent of sales.

But for Anheuser Busch, the low-carb trend creates a dilemma.

How does Bud Light fight off Miller Lite’s low-carb approach without hurting Anheuser’s own low-carb beer, Michelob Ultra?

“They can try to tinker with the Bud Light message,” Cohen said. “They can raise spending to try and rise above this problem. They could bring out their own low-carb alternative like Bud Ultra, as a line extension, but that might be costly, so I think it is a challenge.”

The other challenge for Bud and Coors Light is their marketing.

Over the years, Bud Light sales have been driven by humorous, distinctive advertisements like the latest ones featuring Cedric the Entertainer.

Meanwhile, Coors Light has positioned its image as being young and hip with ads featuring Kid Rock.

Suddenly, hip light beer commercials may not be enough to beat Miller Lite’s “healthier” approach.

“I think it’s going to put more emphasis on the fact that consumers may choose a beer based on the perception of health a wellness, vs. taste and brand imagery and traditional marketing,” Cohen said.

So pop open a cold one, and get ready to count carbs, for in the beer business, less may be more.