USA: Pabst Blue Ribbon slated to launch a whiskey this summer

Pabst Blue Ribbon is slated to launch a whiskey this summer. With cocktail consumption cannibalizing beer and wine sales left and right, it is no surprise that smart brewers are entering new categories, Forbes reported on March 26.

The brewer, established in 1844 in Milwaukee and currently based in Los Angeles, did not respond to questions for comment for this story.

Tobacco Tax and Trade Bureau (TTB), which is based in Washington D.C., approved the product based on it meeting all legal requirements, notes Tom Hogue, the agency's director of congressional and public affairs. He added that the company’s statement about the whiskey’s production was sufficiently standard to meet all government regulations.

The whiskey, which is 40% alcohol by volume, even has a mash bill—identifying the type of grain used—on it, he notes.

In a fascinating move, the whiskey’s aging statements note that the product was aged for only five seconds. That is less than a flash in the pan for this type of spirit which can be aged for many more years in barrel. Pabst clearly didn’t want to call it a white whiskey—although it is likely to be pale in color—or moonshine, because it might have had negative connotations.

A white whiskey classification also would have put the brand outside of the strong branding and marketing machine that continues to pump up sales of American-made, artisanal whiskeys in bars and restaurants.

Rob McMillan, the Napa-based founded of the Silicon Valley Bank Wine Division, adds that the whiskey moniker may seem “like form over substance to call it whiskey, but all beverage companies are looking for growth and a beer company trying to ride the modestly higher growth rates in spirits isn’t a surprise, any more than the acceleration of Gallo’s accelerating move into spirits.”

As recent data attests younger generations are drinking less in general, according to data provided by data analyst Jon Moramarco of Gomberg Fredrikson in his annual report.

Many millennials are drinking less for health reasons as well, adds Moramarco. As a result, “alcoholic-beverage producers are dealing with evolving consumers who are drinking less but when they do drink alcohol, they are looking for well-made premium products,” shares McMillan.

In addition, so many beverage manufactures are trying to cross promote against all favorite categories, which is nothing new since Bartles & James launched in 1981. McMillan adds that, “This particular move to spirits is another path to find growth and take advantage of consumers who know the brand.”

Similar category jumps have been made by alcohol importers, marketers and distributors are entering in the cannabis game. A Canadian subdivision of U.S. distribution kingpin Southern Glazer’s has bought into Canadian cannabis distribution. Stateside, wine companies are also jumping in the marijuana game.

McMillan sites the Napa-based Constellation Brands as being one of the most experimental. The company, “seeing the flagging growth [in wine sales] made the bold plunge into cannabis with their $4 billion investment into Canopy Growth.”

So at the end of the day, Pabst is playing the same game. “Spirits companies are looking for new growth by adding alcohol to any non-alcoholic beverage that has positive sales momentum, whether kombucha, green tee, or just flavored soda water,” he adds.

Overlapping synergies are likely to continue among alcoholic beverage categories and brands. However, “There is no predicting what the major alcohol beverage companies will do next, but recognizable brand extensions are a natural path to growth, so we can expect more of this kind of market exploration,” concludes McMillan.

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