March 18th, 2011

Pabst's Horse of a Different Color: Colt 45 Enters Controversial Ring .

The Wall Street Journal

This isn’t your father’s Colt 45.

The new owners of that malt-liquor brand, with the help of rapper Snoop Dogg, plan to unveil next month a label called Blast by Colt 45. The beverage will contain fruit flavors and 12% alcohol by volume, about twice the level of the original version of Colt 45

The move places the brand into a rapidly growing category that has drawn criticism from lawmakers and anti-alcohol groups: high-alcohol, fruit-infused malt beverages. That makes Blast a risky debut for the Metropoulos family, which acquired Colt 45 through its purchase last year of Pabst Brewing Co., the fifth-largest U.S. beer supplier by sales.

Brothers Evan and Daren Metropoulos, who control the company with their father, private-equity investor C. Dean Metropoulos, say Blast is the first of what will be a number of efforts to refresh Pabst’s time-worn brands. The elder Mr. Metropoulos made his fortune running companies that sold such pantry basics as Bumble Bee tuna and Vlasic pickles. Terms of the Pabst deal weren’t disclosed, but people familiar with the matter said the price was around $250 million.

The company’s flagship brew, Pabst Blue Ribbon, has enjoyed strong growth since 2002 thanks to a newfound hipster appeal. But Colt 45, advertised by actor Billy Dee Williams in the 1980s, has been in decline for over a decade.

The Metropoulos brothers said they signed a long-term marketing agreement with Snoop Dogg (whose real name is Calvin Broadus), under which the rapper will promote the brand during live music, television and other appearances. Snoop already is touting Blast on Twitter. The company declined to discuss the terms of the deal with the artist but said it will spend millions of dollars on the launch of Blast, including ads in Vibe, a music magazine.

Colt 45 has long targeted an urban, African-American audience, but Blast is aimed at a broader array of drinkers, including women, said Daren Metropoulos, 27 years old.

Blast—which will make its debut in stores April 5, or “4-5,” for Colt 45—will be sold in six packs of seven-ounce bottles, as well as in single, 23.5-ounce cans. Flavors include strawberry lemonade and raspberry watermelon, with colors to match. The six-pack of seven-ounce drinks will cost about $7.

Blast will compete with Phusion Projects LLC’s Four Loko, United Brands Co.’s Joose and Anheuser-Busch InBev NV’s Tilt. Those brands, which also contain up to 12% alcohol, came under fire from regulators in recent years because they contained caffeine, fueling safety concerns that the stimulants could mask a drinker’s awareness of the alcohol consumption.

The companies have since removed the caffeine under pressure from U.S. and state regulators, but alcohol foes continue to raise objections to the amount of alcohol in the beverages.

The level of alcohol in the 23.5-ounce single can of Blast is about the same as the amount in four regular 12-ounce beers. Such potent malt beverages have been on the market for only a few years. Colt 45 contains 5.61% alcohol.

Industry watchdogs say the fruit flavorings and colorful packaging make the products attractive to underage drinkers.

“This is a lot of booze in one can, far too much for a product that is potentially sexy and enticing for youth,” said Bruce Lee Livingston, executive director of the Marin Institute, a California-based industry watchdog group.

Paul Scott, an African-American community activist in Durham, N.C., and longtime critic of malt liquor, said the marketing of Blast is “irresponsible” and will have a negative influence on “the young hip-hop generation.”

Sales of “progressive adult beverages"—an industry category that includes Mike’s Hard Lemonade, Tilt and Four Loko—rose 19% to $959 million in food, drug and convenience stores in the 52 weeks through Feb. 20, according to market researcher SymphonyIRI.

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