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Natty Light introduces flavored vodka as domestic beer sales slump: 'Nothing is off the table'

Beer giant Natural "Natty" Light (BUD) has introduced flavored vodka. Yes, you read that right.

The brand, owned by Anheuser-Busch and best known for its reduced-calorie beer, launched the new product line in 3 flavors — lemonade, strawberry lemonade, and black cherry.

At 30% ABV (alcohol by volume), Natty Vodka is the first-ever spirt extension from Anheuser-Busch.

“Natural Light is constantly looking to innovate to meet the evolving flavor preferences of our fans. Nothing is off the table,” Daniel Blake, Anheuser-Busch group VP of Budweiser & value, said in a press release.

“Flavored vodka is one of the fastest growing segments in spirits, and we knew Natty was the brand to show up to the party with a great tasting offering to set us apart," Blake continued.

The latest rollout comes as more alcohol brands deviate from their core products to better capture shifting consumer preferences.

According to a new CFRA research report, 2020's COVID-19 spikes caused U.S. alcohol consumption to rise by the fastest rate in 18 years. Volumes grew 2% despite steep drop offs in on-premise sales from restaurants, bars and event venues.

Natural Light Vodka (Credit: Natural Light)
Natural Light Vodka (Credit: Natural Light)

With at-home consumption on the rise, the report noted that U.S. consumer demand is being driven by flavor, convenience, and "better-for-you" options.

Market analytics firm IWSR explained that "flavored subcategories – from beer to vodka to U.S. whiskey – are significantly outperforming traditional non-flavored subcategories."

"Flavor is also the top consumer driver of the fast-growing ready-to-drink category, and that’s likely creating a halo effect on total alcohol as well," IWSR continued.

Domestic beer sales on the decline

U.S. beer consumption has steadily declined over the past decade, CFRA noted
U.S. beer consumption has steadily declined over the past decade, CFRA noted

U.S. beer consumption has steadily declined over the past decade, which has come at a greater cost to domestic brands.

The North American beer industry, sometimes referred to as a duopoly consisting of Anheuser-Busch and Molson Coors (TAP), collectively possessed 63% market share in 2020. That's a double-digit decline from 73% in 2014, CFRA noted.

The report added that imports, especially craft beer, have steadily captured market share — growing from 20.6% in 2019 to 21.8% in 2020

Imported beer sales have also increased, rising 3.1% in 2020 compared to a 4.4% drop for domestic beer over thAT same time period.

Alexandra is a Producer & Entertainment Correspondent at Yahoo Finance. Follow her on Twitter @alliecanal8193

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