Chasing Millennials with Organic Beer

(Bloomberg) -- After years of targeting health-conscious beer drinkers with Michelob Ultra,  Anheuser-Busch InBev is going after an even choosier consumer: the organic shopper.

The brewer is introducing a new beer in the U.S. called Michelob Ultra Pure Gold that’s made with organic grains and approved by the Sustainable Forestry Initiative. The idea is to capitalize on the popularity of organic food and beverages -- and win over people who might turn up their noses at big beer brands.

“We see this as an opportunity to keep leading the way in innovation in light beer and aligning great-tasting products with health and wellness trends,” said Azania Andrews, vice president of Michelob Ultra.

Anheuser-Busch is just the latest consumer-product giant to jump on the natural-food bandwagon. PepsiCo Inc. released versions of at least 11 core chip brands without artificial ingredients, including Lay’s, Tostitos, Cheetos and Doritos. Mondelez International Inc. developed a line of crackers and snack bars, called Vea, that have no artificial ingredients or genetically modified organisms. And Kraft Heinz Foods Co. has been trying to clean up its hot dogs.

Michelob Ultra was created in 2002 for beer drinkers who wanted fewer carbs and calories. The Pure Gold product will have a different audience, Andrews said. The target demographic is slightly younger and more likely to live on the coasts.

“It’s probably someone who’s 28-plus who shops for food in more high-end places -- like a Whole Foods, for example -- and is focused on really understanding the kind of things that they’re putting in their body,” she said. “They maybe are people who are very disciplined about organic food and vegetables and other beverages.”

On Monday, Michelob Ultra Pure Gold will begin hitting U.S. stores, including Whole Foods.

The Michelob brand has been a bright spot for Anheuser-Busch in a sluggish industry. Market share of the beer has grown for 10 straight quarters in the U.S.

Other brands haven’t fared as well. Overall, beer has lost market share to wine and spirits for more than a decade.

Pure Gold isn’t AB InBev’s only foray into the organic space. Last year, the company acquired HiBall, an organic energy drink. But Pure Gold is unique among the brewer’s core beer lineup, Andrews said.

“We’re the only beer in the U.S. at the moment,” she said.

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