Prepared Foods of March 7, 2005 enewsletter

Miller Brewing Co. will test-market a fruit-flavored malt beverage imported from South Africa, despite dropping other flavored malt drinks following a disappointing foray in that segment.

Milwaukee-based Miller, the nation's second-largest brewer, will test-market the drink, Brutal Fruit, in Seattle, Tampa, Fla., and Richmond, Va., starting March 14, company spokesman Scott Bussen said.

Brutal Fruit bills itself as fruit juice with 5% alcohol by volume, a level similar to beer. It comes in four flavors: strawberry, mango, litchi and kiwi.

The drink was launched in 2002 in South Africa by SABMiller Plc, Miller's corporate parent. Brutal Fruit has enjoyed strong sales in South Africa, where the company's fruit-flavored alcohol sales grew by 50% in 2004, according to SABMiller's most recent annual report.

Brutal Fruit and other flavored malt beverages are aimed at what could be called the "sweet tooth generation" -- consumers in their 20s who grew up drinking juice and soda and are not wild about the taste of beer. Miller expects Brutal Fruit's main consumers to be women between 24 and 35, Bussen said.

Some of those younger drinkers are showing a growing preference for fruit-flavored vodkas and other sweet spirits. Miller and other brewers have been trying to find ways to deal with the growing competition from spirits. The responses have included such new beverages as Anheuser-Busch Inc.'s hybrid energy drink/beer, B-to-the-E, which is spiked with caffeine, ginseng and fruit flavors.

Brutal Fruit, if launched nationally, could provide Miller and its wholesale distributors with a drink that sells at a higher price than beer, said Mark Rodman, owner of Beverage Distribution Consultants in Swampscott, Mass.

The brand also could strengthen Miller's presence in bars, where drinks sell at higher profit margins than in supermarkets and other stores, Rodman said.

However, Miller's previous dive into flavored malt beverages brought dismal results.

Miller spent $16 million to launch Skyy Blue, Stolichnaya Citrona, Sauza Diablo and Jack Daniel's Original Hard Cola in 2002. However, the flavored malt beverage craze was starting to fade as Miller's drinks hit the market.

Miller dropped Stolichnaya Citrona, Sauza Diablo and Jack Daniel's Original Hard Cola in 2004, and it recently began phasing out production of Skyy Blue.

Bussen said those failed brands were all tied to well-known sprits, such as Skyy vodka and Sauza tequila. Industry analysts said the drinks had trouble standing out within the cluttered flavored malt segment.

By contrast, Brutal Fruit is a stand-alone beverage and has a successful track record in South Africa, Bussen said. He said Brutal Fruit can market itself as different from other flavored malt beverages because of its fruit juice.

Even if Brutal Fruit becomes available nationally, Miller's main business will still be beer. The company's number-one brand, Miller Lite, accounts for about 40% of its sales volume.

By marketing Brutal Fruit as a niche product targeting women, Miller can support the brand without compromising its main focus on beer, said Stephanie Miller, the company's manager of new products.