Elevating beer.

As unlikely as it may seem, the typically robust U.S. domestic beer market has hit some prominent speed bumps in the marketplace in the last couple of years. The problem itself is multifold: Not only have breweries been slammed with the skyrocketing costs of natural gas and fuel used in the brewing process itself, but also with the expense of hauling ingredients and transporting the finished product. None these significant factors, however, have had as much impact as one key trend that has emerged in the population--the increasing demand for wine, spirits, and designer drinks.

At the root of the issue is a shifting demographic. As a core segment of society gets older, these people tend to supplant beer with more sophisticated selections of wine or other mixed drinks. To compound the situation, however, younger drinkers are increasingly drawn to the wide variety, choice, and mystique offered by hard liquor cocktails and specialty beverages. But this is not to say that beer is in a death spiral--it still accounts for close to 58 percent of beverage alcohol consumption in the U.S.--but beer makers are now working overtime to meet these new trends head-on.

In this corner: Anheuser-Busch. The St. Louis-based brewer owns 49 percent of the total beer market, and they are now setting out with the clear goal of changing the perceptions surrounding beer. To accomplish this, A-B has launched several product lines that challenge entrenched assumptions about what beer is and how it is consumed.

Seasonal Varieties

Another issue facing the traditional beer industry is the increased popularity of craft beer, which grew 7.2 percent in 2004 alone. "Craft beer is hot," said Charlie Papazian, president of the Brewers Association. "Today, Americans increasingly turn to the flavor and diversity of locally-made brews when they drink beer."

With that in mind, A-B has set about developing and promoting their own beers that are marketed in conjunction with the changing of the seasons. During the holidays, A-B unveiled Michelob's "Celebrate" and Budweiser's "Brew Masters' Private Reserve," a pair of aromatic, specialty beers that were available for a limited time beginning this past November.

Celebrate was a full-bodied, 10 percent alcohol by volume brew aged in heavily toasted bourbon oak barrels, giving the finished product a dark color and deep flavor and aroma. A-B marketed Celebrate as being similar to a fine cognac, and suggested that it be served in a large snifter. Similarly, Brew Masters' Private Reserve was marketed as a premium beer that was made by collecting the richest part of the brew as it is tapped to the kettles.

Going back to the fall of 2005, A-B's "Jack's Pumpkin Spice Ale" was a draft product that sold out within weeks of its introduction--promoted effectively through the use of specialty tap handles that proved popular with bar patrons. Key to the marketing of these premium brews was the emphasis on serving the beverages in sophisticated glassware--a way of elevating beer up to the level of its spirit and cocktail brethren. A-B also hired celebrity Chef Todd English to play up the possibilities behind beer-and food pairings.

Mixed Drinks

Another way of enhancing beer's image is to promote it not only as a stand-alone beverage, but as an ingredient to be used in a variety of hip cocktails. In this sense, the old saying of "if you can't beat 'em, join 'em" has some merit.

To achieve this end, A-B formed its own separate spirits subsidiary, named Long Tail Libations, Inc., also based in St. Louis. Their first product, Jekyll & Hyde, is actually two bottles of different distilled liquors that are intended to be mixed into a single drink. "Jekyll" is a 60-proof liquor that is scarlet red in color with the taste of wild berries, while "Hyde" is a much stronger, 80-proof concoction that has the taste of licorice and is black in color.

If you're looking to boost your beer sales, try elevating its image to appeal to a changing demographic.