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COPYRIGHT 2005 Bev-AL Communications, Inc.
The ice beer market was developed in the early 1990's in Canada by Labatt and started in the U.S. in 1993. The making of "ice" beers, in general, involves lowering the temperature of the finished product until the water in it begins to freeze and then filtering out the ice crystals that form. This process increases the alcohol content in the beer. This unique process is what differentiated the category from others and led to its instant popularity.
The category saw years of gains in the mid to late 1990's when marketing dollars for the brands were mirroring the increases in consumption. Consumers were attracted to the brews sweet flavor and higher alcohol content. From 1995-to-1999 the category grew 6.0% on an annual compound growth rate. That number declined to 3.3% over the period from 2000-to-2004. The turn in the market occurred at the end of the millennium when advertisers began to take money out of the category and consumers began to gravitate to other beer categories, as well as other beverage alcohol offerings.
Following three straight years of declines, ice gained 2.3% in 2004 to 93.1 million 2.25-gallon cases. The category although below its peak of 106.3 million cases achieved in 2000, has sustained itself at a level that indicates that ice beer has a faithful following.
Natural Ice, the category leader since 2001, continues to be one of ice's bright spots. The brand grew 6.0% in 2004 to 35.5 million cases. The other leading brands in the category have been enduring mixed results. Icehouse, the second-largest brand in the category, has declined for the past five years after peaking at 31.3 million cases in 1999. The third- and fifth-largest brands, Milwaukee's Best Ice and Keystone Ice, were the only other ice brands tracked to gain cases in 2004. Milwaukee's Best Ice climbed 14.3%, and Keystone Ice grew 4.2% to 3.75 million cases last year. The overall gain in the category is attributed to the increases 'talons, these three brands.
Bud Ice, one of the brands that started the ice category back in 1993, has continued to fluctuate since its peak of 35.8 million cases in 1994. Last year the brand fell 4.2% to end the year at 11.3 million cases. Another brand that was introduced around the same time is Miller Lite Ice. Close to 5 million cases of Miller Lite Ice was consumed in 1997. That number has dwindled since and reached less than 200,000 last year.
The ice beer offerings from Pabst and High Falls all continued to decline last year. In aggregate consumption of the six ice brand offerings from these t\xo suppliers fell 10.4% last year. Plus, collectively, tile brands lost more than one-third of their case sales since 2000.
The marketing of brands in the ice category has been relatively non-existent in the past few years. For the past two years one of the only brands that has advertised in the category is icehouse. Miller spent $3.2...
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