Budweiser is launching its first-ever alcohol-free, 50-calorie beer.
Anheuser-Busch InBev is using the recognizable Budweiser brand to launch Budweiser Zero, an alcohol-free lager that tastes similar to the best-selling alcoholic beverage. One serving has 0 grams of sugar, targeting health-conscious drinkers that crave the taste of beer and don't want to deal with a hangover.
The popularity of so-called healthier alcoholic alternatives is growing, as shown by the rise of low-calorie spiked seltzers and light beers. For Budweiser, Bud Zero creates an an opportunity for the brand to capitalize on the trend.
"We really want to disrupt this space because we believe there doesn't need to be a stigma and outdated understanding of non-alcoholic beer," Monica Rustgi, Budweiser's VP of marketing told CNN Business. "Beer is something that people love, so it doesn't have to be binary decision of drinking beer with alcohol or not drinking a beer at all."
Bud Zero is getting a helping hand from entrepreneur and retired NBA player Dwyane Wade, who helped create the product's taste and packaging. He told CNN Business that he hopes the drink not only attracts athletes and people who are focused on their health, but also beer fans who are looking to be responsible in social settings.
"You don't always want to walk away being hungover or with a buzz," Wade said. "I loved the idea of being part of the conversation without having to drink alcohol." The basketball player added that he's often the designated driver for his family and friends.
The beer had a soft launch in March and it's debuting a national ad campaign featuring Wade beginning Wednesday. So far, the initial reaction from drinkers has "pleased" the company, according to Rustgi.
Bud Zero, which is priced similarly to Budweiser, will first be sold in a 12-pack of 12-ounce cans and 16-ounce single cans. A 6-pack of 12-ounce bottles will roll out in November.
Beer is booming
Retail beer sales have jumped 20% since mid-March, when Covid-19 began spreading in the United States, according to Nielsen. Non-alcoholic beer sales jumped 35% in the same time period, the firm said.
Beer has been falling out of favor as drinkers are shifting toward higher-priced spirits and healthier alternatives, like spiked seltzer. However, beer's affordability, brand familiarity and product innovations, including low- and non-alcoholic beer, has grabbed people's attention once again.
Hopes of leading a healthier life has led some drinkers to recalibrate their relationship with alcohol, leading to the rise of mocktails and the "sober curious" movement.
That trend has recently extended into the beer market as both large and small companies rediscover non-alcoholic beers. Athletic Brewing, for instance, is a small craft brewery that only makes zero-alcohol beers and doubled production to keep up with demand.
Currently, the top-selling non-alcoholic beer in the United States is Heineken 0.0, according to Nielsen. The Dutch brewer launched the booze-free product in the US last year following years of strong sales in Europe. Heineken called its US launch a "success" earlier this year and said it's delivering double-digit growth to its low- and no-alcohol beer unit.
Following Heineken 0.0, O'Doul's is the next top-selling brand on the list with, Busch in third place and Beck's non-alcoholic beer in fourth. Notably, all three brands are owned by Anheuser-Busch and have a low amount of alcohol. But Bud Zero is the company's first beer to be truly 0.0 alcohol by volume.
Using the Budweiser name might give the company an advantage among competitors. AB InBev used the strategy or the launch of Bud Light Seltzer, which quickly rocketed to one of the US' top-selling seltzer brands partly because its association with the name.
The pandemic has made people crave familiar products and possibly shy away from trying something new, Caleb Bryant, a food and drink analyst for market research firm Mintel, told CNN Business.
"The Bud name carries so much weight to it, and this product is going to benefit from instant consumer recognition," Bryant said, adding that the Bud name is "certainly going to spur trial among some consumers" who otherwise might not have tried it.
Bud Zero is an integral part of Anheuser-Bush's portfolio strategy, which is flooding consumers with different options — a technique it has pursued by creating multiple spiked seltzer companies, including Bud Light Seltzer, Bon & Viv and Natural Light Seltzer.
The parent company "has so many different brands and the fact that their selection of non-alcoholic beer options is growing is just playing toward that trend," Bryant said.