What’s happened to just good, plain ol’ beer? It used to be you’d be able to order a beer and you got a brewed concoction of barley, malt, and hops. Today, though, you walk into a bar and you’re more likely than not forced to choose between an odd assortment of fruits, vegetables, and who knows what else.
Anheuser Busch Inbev SA (ADR) (NYSE:BUD) not only has its lime-infused Budweiser, but at one time also offered drinkers a liquored-up, tequila-flavored mix that sought to eliminate the burdensome step of ordering a shot and a beer.
Following its acquisition of Grupo Modelo’s beer business from A-B last month for $4.7 billion, Constellation Brands, Inc. (NYSE:STZ) is joining the fruit cocktail set, saying it’s going to use its new brewing capabilities to start introducing its own new flavors. First up will be a Bloody Mary-style concoction of tomato, salt, and lime in a 3.5% beer called Modela Especial Chelada.
Only Budweiser has a similar-style beer on the market, its tomato juice and clams brew, Clamato Chelada, and Constellation Brands, Inc. (NYSE:STZ) says it’s a niche with huge potential that it wants to exploit.
I’ll admit I’m not much of a beer snob. While Pabst’s Colt 45 Malt Liquor is probably not on my menu (though its PBR just might be!), I’m pretty happy imbibing a Coors Light and straying only a little beyond that comfort zone with Boston Beer Co Inc (NYSE:SAM)‘s Samuel Adams. Pretty tame, I know, so for me it’s distressing to see the shelves of the local packaged goods store being lined with beers infused with everything from limes and lemons to honey, pumpkins, and maple syrup. It’s hard to buy anything that’s just “beer” anymore.
While it was the growth of craft brews that started this trend away from plain beer to more exotic, and some would say flavorful, tastes, it reminds me of the women’s shampoo market, where nuts, raisins, extracts, and oils were added to the soap, so much so they read like a beer can label!
It’s also a trend we’ve seen among distillers like Diageo plc (ADR) (NYSE:DEO), who seem intent on adding exotic flavors to their liquors. Vodka has been particularly susceptible to being infused full of citrus flavors and even whipped cream. But it’s led to an industry renaissance as a whole, lifting sales at a 5% compounded annual growth rate since 2005, which has caused beer to sit up and take notice.