Beer loses its fizz

A long but somewhat interesting article on how the popularity of beer is slipping among the older and younger crowds.

The beer industry is madly trying to figure out how to reverse this trend, which industry insiders insist is cyclical but which some analysts warn could represent a more long-term change in who drinks what and when.

"Demographic trends are working against the brewers," said Bonnie Herzog, a beverage industry analyst for Citigroup Investment Research.

Younger consumers raised on an ever-growing array of soda flavors and juice drinks, Herzog and others say, are finding the transition into alcohol a little easier with mixed drinks, which can be sweeter than beer and personalized to one's own taste. Baby boomers, meanwhile, are gradually transitioning from beer to wine and cocktails. And across the board, beer is suffering from a bit of an image problem.

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But brewers say they get it now. They say they're on it, even though the industry continued to dip through the first half of this year, according to researchers who follow beer sales. Companies are investing heavily in new product development, new packaging and new marketing - all aimed at getting people to turn to beer for more "drinking occasions."

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Lachky of Anheuser is open to taking some blame. "I don't think beer companies have done a very good job in the last five years of protecting the on-premise environment - the restaurants, the bars, the taverns," he said. "That's where the hard liquor people have come in with a very aggressive form of marketing."

Yet Lachky's salvo isn't to fight marketing with marketing - it's innovation. The problem, he says, is that people don't think of beer as appropriate for as many occasions as they could, so Anheuser is going to give them the products that do seem appropriate.

The company has unveiled a dizzying array of new brands and new packaging in the past two years, most recently a product called Tilt, which is a beer that contains ginseng and caffeine. It has made large, eye-catching aluminum bottles and partnered with Bacardi to make Bacardi Silver, a malt-based beverage that is sort of a hip alternative to a wine cooler.

"They're transitioning from being Budweiser to being a malt-based alcohol producer," Schuhmacher said. "They have tremendous capabilities, tremendous manufacturing capabilities that people may not realize."

They'll realize it soon, as there are lots more products coming from Anheuser-Busch. You'll see products with flavors and colors that add individuality to bottled drinks and flexibility to draft beer in bar settings. Feel like a spicy mango beer? It's being tested right now.

"They're beertails or beertinis - fun drinks that are meant to excite," Lachky said. On its Web site, Anheuser-Busch also offers recipes for mixed drinks that use beer as a base.

Next spring the company is introducing Bistro8, a malt-based beverage that Lachky says "acts" like a wine, with a complex flavor, a little carbonation and a light finish. "It's perfect for food," he said. It has done well in testing in Florida and South Carolina, especially among women.