Corona Cero's Olympic bet ramps up rivalry in zero-alcohol beer

Corona Cero's Olympic bet ramps up rivalry in zero-alcohol beer · Reuters

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By Emma Rumney

LONDON (Reuters) - Anheuser-Busch InBev is betting on Olympic sponsorship to help its new Corona Cero brew become a top-selling zero-alcohol beer globally, but it will need to catch up with rivals like Heineken 0.0, a leading player in major markets.

The Olympic sponsorship, announced in January, highlights Corona Cero's new role as the priority zero-alcohol brand for the world's biggest brewer globally, reflecting a strategy shift.

Previously AB InBev focused on specific brands in different regions, such as Stella Artois 0.0% in Britain.

The Olympics provide a platform to drive Corona Cero's expansion, said Marcel Marcondes, AB InBev chief marketing officer, enabling a more aggressive roll out than usual.

The sponsorship creates the right conditions to help turn Corona Cero from a new brand into a major player, Marcondes said.

As part of the deal, Anheuser-Busch InBev will sell Corona Cero in Olympics-themed packaging and run TV and online advertising campaigns, tailored to a local audience across most of the 40 countries where Corona Cero is present, Marcondes said.

In around 15 countries, a Corona Cero-branded daily recap of key moments from the Games will be part of Olympic broadcasts, he said, and in many cases the hosts will be drinking Corona Cero.

"We're here to play a leadership game," he continued. "We would love to see Corona Cero become the number one no alcohol beer in the world."

Corona Cero has some way to climb. It is a new brand in many markets, competing with numerous other players also looking to cash in on the fast growth enjoyed by non-alcoholic brews.

AB InBev, for example, said its no-alcohol beer portfolio delivered high teens revenue growth in its 2023 financial year. Heineken said its 0.0 version grew double digits across 16 markets.

While still a small portion of revenues, zero alcohol beer has become a big part of major brewers' strategy.

Removing the booze offers brewers a way to drive new beer consumption, and could also shield them from the impact of drinkers cutting back amid a shift towards healthier lifestyles.

HIGHER MARGINS

Alcohol-free brews also tend to offer higher margins, said George Croft, senior advisor on strategy & finance at beer consultants First Key Consulting.

They require upfront investment and involve slightly higher production costs. But they do not incur alcohol-related taxes, which reach almost 50% of the price of a beer in markets like Canada, Croft said.

The Olympic sponsorship singles out Corona Cero as a clearer rival to Heineken 0.0, which already has a leading share in many markets.