Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, February 17, 1994                   TAG: 9402170057
SECTION: BUSINESS                    PAGE: B-10   EDITION: METRO 
SOURCE: Los Angeles Times
DATELINE:                                 LENGTH: Medium

IT'S A HOT YEAR FOR ICE BEER

"It tastes a lot colder than regular beer," Frank recalls the thirsty but misguided bowler saying after his first gulp. "That must be why they call it ice beer."

Those words, off-base as they are, make sweet marketing music to the ears of the beer giants. Facing years of declining sales, brewers are desperate to convince consumers that they have created a beer that is better than yesterday's brew.

Ice beer is not a frosty mug of beer with ice cubes clinking inside. It is beer brewed at a temperature so cold that ice crystals form. The process was devised in Germany but popularized in Canada, and beer makers insist it makes the brew taste richer. Ice beer - which often has a higher alcohol content than regular beer - already is being marketed as the hottest thing since, well, dry beer.

This week, Miller Brewing plans a national rollout of its light ice beer, and Coors begins a limited distribution of its own icy brew. Anheuser-Busch earlier this year began marketing its Ice Draft in the Budweiser brand.

Industry skeptics say the brewing brouhaha is little more than a marketing gimmick aimed at prodding beer drinkers to pay up to 50 cents more for a six-pack.

Because of incessant ad campaigns from Madison Avenue image makers, "nobody wants to drink their father's beer," said Frank, who marvels at repeated attempts by big brewers to market something new. "I call this the slippery ice beer segment."

But the major brewers call it something else: hope.

In Canada, where it has been marketed for slightly more than a year, ice beer accounts for nearly 12 percent of the market. By the end of 1994, industry consultants say ice beer could account for 2 percent of the much bigger U.S. market - almost $1 billion in retail sales. By comparison, dry-beer sales accounted for about 1.7 percent of the domestic beer market in 1993.

That's why each brewer is claiming some sort of ice beer "first." Labatt's says it was first to sell it in North America. Coors claims it is first to use the technology domestically. Anheuser-Busch has first dibs on the draft version. And Miller boasts it is brewing the first low-calorie ice beer.

"It's a hot time for ice beer," said Lynn Dornblaser, publisher of the trade magazine New Product News. A year ago, domestic ice beer didn't exist. Today, a dozen or so ice beers have already been announced.

"It will probably be one of the hottest new products of 1994," Dornblaser said. "But look for it to fade by 1995."

The big brewers have spent millions of dollars over the past decade trying to persuade consumers to buy new beer products that are "dry," "draft," "clear," "light," "low alcohol," "no alcohol," "low calorie" and - trumpets, please - "ice."

But not everyone approves of the ice beers, most of which have an alcohol content of 5.5 percent by volume, compared to 5 percent for many regular beers.

"In a society with 13 million alcoholics, we don't need this kind of product," said Thomas Neslund, executive director of the Silver Springs, Md.-based International Commission for the Prevention of Alcoholism and Drug Dependency. "It will appeal to younger drinkers in particular - who are the least well-informed."

But Anheuser-Busch executives point out that their ice beer has the same alcohol content as their regular beer.

"In today's environment, we certainly don't want to get into an alcohol-content war," said August Busch IV, vice president of brand management.

Miller Brewing Co. says the higher alcohol content in its ice beer is only the incidental result of the brewing process.

"We are not trying to sell higher-octane beer," said Richard Lalley, director of new business development for Miller. "We have a product with a taste that consumers say they want."

There is even a battle raging over the term "ice." Labatt Breweries of Canada, first to sell ice beer there, recently sued rival brewers Miller and Molson for using the term "ice brewing" in ads, saying it has exclusive rights to that phrase.

Coors Brewing Co., which signed a domestic licensing deal with Labatt, will this week begin distribution of Coors Artic (yes, that's how they misspell it) ice beer, said Jon Runge, new product development director.