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A matter of taste

They used to call it near beer. It had a small market _ youngsters looking for a way to emulate grownups. Now, it has become big business.

No-alcohol beer, it is called, thank you. The world's top two brewers, in an continuing quest for customers, are leading the charge into the market.

Anheuser-Busch Inc. has rolled out O'Doul's Non-Alcoholic Brew and Miller Brewing Co. has launched Sharp's. The brews _ legally, the companies cannot refer to them as beer _ have less than a half-percent alcohol content.

Will the stuff sell?

One beer industry analyst, Bob Weinberg of R.S. Weinberg & Associates in St. Louis, is skeptical, partly because no-alcohol beer tastes "God-awful," he said.

Weinberg said the industry's Big Two are trying to market no-alcohol beer as a new adult soft drink, but they will have to displace Diet Coke and Diet Pepsi, already well-entrenched.

"This trend, it makes no sense to me," Weinberg said. "I am baffled, in all honesty. I can't see it."

Drinking opponents have also expressed doubts about no-alcohol beer. They said something that resembles beer won't necessarily dissuade young people from drinking the real thing.

Hamilton Beazley, president of the National Council on Alcoholism and Drug Dependence in New York, said no-alcohol beer could even make children more apt to drink. "I don't see a happy image on Super Bowl day of a 6- or 7-year-old kid drinking a can of no-alcohol beer while his dad drinks the high-test stuff," Beazley said.

"Beer is not just a beverage. This is kind of like candy cigarettes. It's a poor model for kids."

No-alcohol beer sales haven't been impressive since Anheuser-Busch and Miller got serious about peddling it in recent months.

While Anheuser-Busch sold nearly 81-million barrels of beer last year, capturing 42 percent of the market, the number of barrels of no-alcohol beer sold industry-wide was between 700,000 and 1.1-million. Primary markets are Moslem countries (where alcohol drinking is banned) and the United States.

Nonetheless, company officials claim that O'Doul's and Sharp's are off to fast starts.

Both brands are available in most major grocery stores in the Tampa Bay area, but officials with area distributors said it will be a few months before O'Douls and Sharp's are available in convenience stores.

Bob Merz, group manager for O'Doul's, contends that health-conscious adults are more apt to reach for a no-alcohol beer than a soft drink or juice in certain circumstances.

For instance, Merz said, no-alcohol beer could be the appropriate beverage for the designated driver at a party.

Nonetheless, no-alcohol beer seems to be the most risky venture of all the diversification taking place, especially at Anheuser-Busch. The world's leading brewer has gone from Budweiser to Busch to Michelob to light beer to dry beer to several concoctions in between. Counting O'Doul's, it now makes 17 brands of beer.

That includes a reduced-alcohol beer, called L.A., which has had limited success, selling about 100,000 barrels in 1988. But it was still beer, watered down or not.

In the case of O'Doul's, will taste be enough? Perception may also pose a problem.

None of a group of six drinkers informally polled by the AP liked the taste of O'Doul's when they knew what they were drinking. One said the brew resembled mildly flavored water and another said it was like beer frozen and then thawed.

But only two of the six could identify O'Doul's in a blind taste test with two regular brands.

Both breweries are betting that its projected audience _ the premium beer drinker, primarily male, age 35 and older _ is ready for a no-alcohol beverage. Industry insiders estimate that Anheuser-Busch and Miller have spent more than $10-million each developing non-alcohol products.

Similar to Diet Coke, the advertising campaign for O'Doul's stresses that "the taste will win you over."

The long-time no-alcohol leader, Kingsbury, a product of G. Heileman Brewing Co., definitely has noticed. "Everything we've seen and heard is that Miller and Anheuser-Busch are going to be spending very heavily," said David Shield, a brand manager for Heileman. "We've got some things up our sleeves too. We're planning on increasing our activity."

Though it debuted nationally only two months ago, O'Doul's has been around for several years.

Anheuser-Busch began developing a no-alcohol product in the early 1980s, introducing a brand known as LA-X in Savannah, Ga., in 1986. In March 1989, O'Doul's was released in six southeastern markets.

Merz said the taste resembles that of Busch. Like the brewery's other brands, O'Doul's goes through brewing, aging and fermentation. But then, a final cold-filtering step removes the alcohol.

Merz said technology has eliminated the heavy, syrupy taste once associated with no-alcohol beers.

The brewing process used for Sharp's at Miller is a secret. Generally, the company brews Sharps at a lower temperature, minimizing the development of alcohol, said Tony Sciolla, an associate brand manager.

Some beverage industry analysts suggest that no-alcohol beer is the next step in a constantly changing industry. Since Milwaukee-based Miller introduced the wildly successful Miller Lite in 1973, the beer market has exploded with new choices.

There are four varieties of Michelob, for example, and almost every beer has light and dry companions.

Weinberg said 80 percent of Miller's business last year came from beers that did not exist in 1973. Sixty-three percent of Coors' business came from new product lines.

Anheuser-Busch, alone from the rest, is decidedly old-line, with only 20 percent of sales coming from new products. Budweiser, Busch and Michelob continue to carry the weight.

With that power base, industry analysts say, Anheuser-Busch can afford to take a few chances. The same is true for Miller, No. 2 in sales.

"We wouldn't have gotten involved with no-alcohol beer if we didn't think the opportunity was there," said Miller's Sciolla.

Facts about No-alcohol brew

Annual production in the U.S. of non-alcoholic beers was about 1-million barrels last year, compared with national market of more than 182-million barrels.

Analysts say the non-alcoholic segment of the U.S. beer market is growing at 10 to 15 percent a year. The overall market is stable.

Non-alcoholic beer has less than a half-percent alcohol, compared with 1.2 percent for low-alcohol beer, 4.1 percent for light beer and 4.5 percent for regular beer.

The average standard beer has between 100 and 150 calories. A light beer has 90 to 100, and a non-alcoholic beer has 60 to 75.

Source: Times research