Molson Coors Launching Coors Light Ice T

Rolling out tea-flavored beer in Canada, possibly U.S.

GOLDEN, Colo. -- Molson Coors Brewing Co. said on Tuesday that it will launch Coors Light Iced T in Canada next month ahead of a possible U.S. rollout, reported the Wall Street Journal. The citrus-like, iced tea-flavored beer will have approximately 4% alcohol content but no caffeine.

Molson executives said during a meeting with analysts that the new products should help spur sales so the company can put less reliance on cost-cutting to drive its profit, added a Reuters report. It also seeks to make beer more attractive to people who have moved on to wine or cocktails.

"Someone else is eating our lunch in the alcohol space," Molson Coors CEO Peter Swinburn said at the meeting.

Coors Light Iced T will go on sale first in Canada, where consumers are interested in flavored beers and other refreshing drinks, Molson executives said. They did not, however, rule out an expansion into the United States.

Other new products include Carling Zest, a limited-time-only beer with citrus flavors and an autumn-inspired Leinenkugels beer, said the report.

North American brewers are betting on some unusual flavors to convince more consumers to buy beer before liquor, as drinkers increasingly turn to exotic cocktails and other alcoholic beverages, the Journal said.

Beer giants such as Golden, Colo.-based Molson Coors and Belgium's Anheuser-Busch InBev NV increasingly are trying new combinations amid flat sales in Canada and three straight years of volume declines in the United States, the newspaper said.

Liquor companies have been stealing market share in North America in part by aggressively marketing new concoctions such as Smirnoff Fluffed Marshmallow Flavored Vodka and Southern Comfort Fiery Pepper.

Beer still controls about half of the U.S. "throat share" in alcohol. But liquor now has roughly a third after having gained 5.4 and 6.4 percentage points of market share in revenue and volume since 2000, respectively, according to the Distilled Spirits Council. Wine also has been winning over more drinkers.

At the same time, smaller craft brewers have been swiping consumers from bigger brands, often with novel flavors such as strawberry buckwheat honey or bourbon-barrel-aged beer. At Boston Beer Co., maker of Samuel Adams, a major growth engine in recent quarters has been Twisted Tea, its hard iced tea brand.

Anheuser-Busch, which boasts nearly a 50% market share in the U.S. beer market, is launching Michelob Ultra 19th Hole Light Tea and Lemonade in April for American drinkers. Its two biggest brands, Budweiser and Bud Light, have seen U.S. volumes slump in recent years, said the report.

Chicago-based MillerCoors, the U.S. joint venture between Molson Coors and London-based SABMiller PLC, also is tackling the cider market, which is small but growing. MillerCoors enjoys approximately a 25% beer-market share in the United States, largely on the back of its Coors and Miller brands. But like A-B, that share has been slipping.

"One of the reasons [liquor] has done better than beer in the last years is because of more emphasis on flavor innovation and variety," Benj Steinman, publisher of Beer Marketer's Insights, told the paper.

Steinman said that he expects that big brewers will introduce more new products in the coming months to try and boost revenue.

But the beer industry's track record has been mixed when it branches out. Coors made an initial marketing splash in the early 1990s when it rolled out Zima, a clear malt beverage. But sales soon fizzled and it is no longer sold in the United States, although it remains popular in Japan.