Miller Brewing Rolls Out a New Non-Alcoholic Beer : Marketing: Experts say brewers are responding to the growth of anti-drinking campaigns and the public’s concern about health and fitness.


Beer makers, their sales as dull as a lukewarm mug of brew, are hoping to tap an unlikely new market: Nondrinkers and others who thirst for something besides alcohol.

The industry’s push gained momentum on Monday when Miller Brewing Co. announced that it will introduce a non-alcoholic brew on Jan. 1 called Miller Sharp’s. The entry of Miller, the nation’s No. 2 beer maker and a heavyweight marketer, will heighten the visibility of a product now brewed exclusively by much smaller rivals.

Charles W. Schmid, Miller’s senior vice president of marketing, said Sharp’s is primarily intended for men in the 25-to-54 age category who enjoy drinking beer but have occasions, such as business lunches, when they want to avoid alcohol.

“The customer for this beer is going to be a mainstream beer drinker who wants the taste of beer,” Schmid said.


Industry experts said the introduction of Sharp’s also reflects brewers’ deep-seated worries about the emergence of anti-drinking campaigns across the country and consumers’ growing preoccupation with health and fitness. Many said they doubted, however, that non-alcoholic beer will ever be more than a minor product.

Some experts disputed the notion that there are many people who drink beer mainly for the taste.

Tom Pirko, head of the Los Angeles consulting firm Bevmark Inc., said people drink beer mainly because “they like the way it makes them feel. . . . Take away the alcohol and all you have is the taste, and people don’t pursue that taste.”

Non-alcoholic beer, Pirko said, would compete directly against beverages that are booming in popularity--soft drinks, juice drinks and bottled water.


Jerry Steinman, publisher of Beer Marketer’s Insights, added that brewers face a marketing dilemma with non-alcoholic beer: If they don’t promote the product well, the drink has little chance of getting the exposure needed to boost sales much beyond the current level, estimated at less than one-half of 1% of the U.S. beer business.

On the other hand, Steinman said, if brewers promote the product too aggressively, they will come under criticism for “teaching people to drink beer.”

Michael Jacobson, executive director of the Center for Science in the Public Interest and a critic of the beer industry, said his “hunch” was that, on balance, non-alcoholic beers would pull people away from alcoholic beverages. He said non-alcoholic beer might have a “chicness” that would make it a well-accepted drink at places where liquor and beer are served.

At the same time, Jacobson expressed concern that non-alcoholic beer might let teen-agers “become accustomed to a beer-like taste and then move quickly to regular beer and its alcohol-related problems.” He said the impact of the product on consumers hinges largely on whether it is marketed to young people.

Miller’s Schmid said Sharp’s will be promoted in a national advertising campaign geared to adults around the theme, “Keep Your Edge.” Among those it should appeal to, he said, are the calorie conscious; a 12-ounce bottle of Sharp’s has 74 calories, compared to up to 100 calories for a bottle of light beer and roughly 150 calories for a regular beer. Although beer costs vary from market to market, Sharp’s price is expected to be in line with premium beers.

Schmid maintained that non-alcoholic beers so far account for a scant share of the beer market largely because existing products do not taste like regular beer. He credited Miller with achieving a “taste breakthrough” by developing a new, proprietary brewing technique.

Among those certain to be watching Sharp’s introduction is St. Louis-based Anheuser-Busch Cos., the world’s largest brewer.

Anheuser-Busch currently is test-marketing a non-alcoholic beer called O’Doul’s in communities in Tennessee, Georgia, Florida, Alabama and Missouri. Although national distribution is not expected to begin soon, a source close to the company said it probably will move into more markets before long.


The current No. 1 non-alcoholic beer in the U.S. market is Kingsbury, with roughly 42% of the sales volume. An official at Kingsbury’s brewer, the La Crosse, Wis.-based G. Heileman Brewing Co., said he wasn’t concerned about the arrival of another non-alcoholic beer.

“The non-alcoholic market is going to explode” as consumers continue to moderate their drinking, said David Schield, the marketing manager in charge of Heileman’s non-alcoholic drinks.

Industry analysts were less optimistic, saying the sales growth of 10% to 15% over the last five years for non-alcoholic beers stems mainly from the fact that sales started from such a low base.

No one, though, is ready to write off non-alcoholic beer.

When light beer was introduced, said Steinman of Beer Marketer’s Insights, “no one dreamed it would become the large segment it is today"--about 25% of the overall beer market.