Zima to make a summer return
CHICAGO — Who knew so many people liked Zima?
In a savvy bit of marketing, Chicago-based MillerCoors is bringing back Zima — the “zomething different” alternative to beer of the early 1990s — for a limited time this summer. When the news leaked out through a trade publication earlier this year, the Internet happily responded with a barrage of GIF-heavy nostalgic odes to the days of Zima’s past.
And yet, there are many, many alcoholic alternatives to beer these days. Flavored malt beverages have exploded in recent years as large beverage companies try to lure millennial drinkers who are adventurous in flavors and promiscuous with brands. Once a pioneer, Zima now faces hard lemonades, teas, ciders, sodas and seltzers in the battle for consumer attention.
Flavored malt beverages, as a subcategory, represent about 5 percent of beer’s total market share. That slice could grow much larger in the coming years as beer titans like Anheuser Busch InBev and MillerCoors appeal to fickle customers who drink a lot more wine and spirits than they used to.
“It’s incredibly intense and extremely competitive, every day, forever. I haven’t got a single sympathy card from anyone at a macro brewery. And at the same time, I know they’re aggressively competing for our space and our consumers. And I just expect that continue,” said Phil Rosse, president of Mike’s Hard Lemonade Co., a division of Mark Anthony Group that’s headquartered in Chicago.
Rosse sees his company as David versus several Goliaths. In U.S. sales for last year, Mike’s Hard Lemonade maintained the top spot in the flavored malt beverage category over larger companies like MillerCoors and Anheuser Busch, according to data from Chicago-based market research firm IRI.
But competition in the category is only getting fiercer. And with hard sodas now in decline, alcoholic sparkling water — think boozy LaCroix — is the next frontier of flavored malt beverages.
Even Constellation Brands — known for Mexican import beers like Modelo Especial and Corona — is exploring how to forge its own way in the flavored malt beverage category, but the company’s not keen on duplicating what’s already on shelves, said Paul Hetterich, president of Constellation’s beer division, which also is headquartered in Chicago.
“There seems to be only one winner in each of these niches. We gotta find our own niche or space to carve out. It’s hard to capture that magic and sustain it, but once you get it, it’s very profitable for a very long time,” Hetterich said.
In the Chicago market last year, Mike’s Hard Lemonade sales grew to $10.3 million, up from $8.9 million in 2015, according to the IRI data, which do not include sales at liquor stores or Costco.
Meanwhile, buoyed by the initial success of Henry’s Hard Soda, MillerCoors leapfrogged Anheuser Busch to rank second behind Mike’s Hard Lemonade in Chicago’s flavored malt beverage market, according to the data. Henry’s Hard Orange Soda was the top selling new brand of the year in U.S. supermarkets.
In recent months, though, hard soda sales have plummeted back to earth after their meteoric rise.
National sales peaked last summer at about $87.7 million for the 13-week period ending June 26, according to the IRI data. But they’ve consistently declined ever since.
Hard soda sales are down in part because of the seasonality of the beverage and in part because of the “oversaturation of undifferentiated brands” in the category, said Josh Wexelbaum, marketing director for MillerCoors.
“I believe hard soda is here to stay and that we’ll be a leader in this space moving forward,” he said.
Not to miss out on an opportunity, MillerCoors also launched its Henry’s Hard Sparkling, in lemon lime and passion fruit flavors, in March. And Zima — discontinued in 2008 — is slated to return for the July Fourth weekend and will be available for a limited time.
