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|  | MARCH 17, 2006
By David Kiley Heineken Sees the LightHalf of U.S. beer drinkers are choosing low-cal hops, and the Dutch brewer has an upscale beer created especially for themPurists who prefer full-bodied, full-calorie beer, and who like the bitter taste of Heineken, may sneer at the new Premium Light beer being rolled out by the Dutch brewer this month. But while overall beer sales decline, two segments are growing -- light beer and premium niche beer -- and beermakers cannot ignore them. "It's very hard to ignore half the market," says Heineken USA Chief Executive Andy Thomas. Heineken also distributes Amstel Light, priced at a premium compared to mass brands like Miller Lite and Bud Light. Take a sip of Premium Light, and the contrast to regular Heineken is immediately evident to the tongue: hardly a trace of bitterness, a hallmark of Heineken (HINKY ). Premium Light is nearly as light, smooth, and, well, watery as, say, Coors Light. The big difference between Premium Light and the mass brands is that it doesn't have that sweet taste that characterizes so many American light beers. Indeed, beer is usually measured on a bitter scale. Thomas says that while beers like Bud and Miller register about 12 on this scale, the original Heineken hit 23. Bud Light and Miller Lite register as low as 8 and 9, he says, while Heineken Premium Light scores a 12 on the meter. LIGHTENING UP. According to industry newsletter Beer Marketer's Insights, four of the five top-selling brands last year were light beer: Bud Light (at No. 1), Miller Lite, Coors Light, and Anheuser-Busch's (BUD ) Natural Light. In fact, light quaffs make up about half of U.S. beer sales. Imported beers have less than 10% of the light-beer market, so that's where Heineken sees an opening. Amstel Light and Corona Light are the most popular among the imports, though Corona Light, to many palates, has even less body than Coors Light. Heineken, already the No. 2 imported beer brand with 2.5% of the overall U.S. beer market, figures its sizeable distribution will vault Premium Light to the top from the start. Premium Light is priced the same as regular Heineken in retail outlets. Thomas says that there's a clear demand for this product from brand-conscious U.S. beer drinkers who drink light beer on a regular basis. "This is the guy who drives a BMW, wears Armani, maybe carries a Coach wallet, but who, when he wants a light beer, now orders a Bud, Miller, or Coors that is out of keeping with the rest of his brand choices." CHANGING TASTES. Heineken is also looking to Premium Light to boost its overall profits, which were down last year, due to increased competition and the dollar's weakening against the euro. Heineken finds that most of its customers are "portfolio" or "mood" drinkers. Sometimes they order a regular, full-calorie, full-bodied beer; sometimes they desire a European-style bitter beer, or even a stout; and sometimes they want a light beer. Rather than launch a new brand, Thomas says the company isn't risking anything by offering a light beer under the Heineken label. "I think it will do pretty well," says Victor Glass, 38, a real estate agent in Providence, who has tried Premium Light. "A lot of my friends and I shifted to light beer as we have been getting older, and we used to drink Heineken all the time." PILOT PROGRAM. Heineken is putting $40 million to $50 million behind the launch. Besides ads, the brewer will do extensive promotions at bars. One clever program involves good-looking young men in pilot uniforms striding into bars with comely stewardesses on their arms. The eye-catching group approaches drinkers imbibing Bud, Miller, or Coors light beer, and asks them if they'd "like to upgrade?" Print ads featuring simple layouts of a Heineken Premium Light bottle, with compelling tag lines -- such as "Succumb to Smooth" -- invite consumers to re-examine their "relationship" with their current domestic light beer. Heineken is also running an extensive Internet campaign, and will break TV ads at the end of March. Heineken has no plans for Premium Light beyond U.S. borders. Light beer is pretty much a U.S. phenomenon. In other countries, the stuff is found mostly in heavy U.S. tourist markets.  Kiley is BusinessWeek's Marketing editor in New York
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