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Beer Marketer's INSIGHTS

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Beer Marketer's INSIGHTS, our flagship newsletter, is published 23X a year. For the last 38 years, it has frequently been the first and often only publication to report the most important beer industry facts, trends, and insights. Each issue features four info-packed pages. Inside, you'll find the latest news and numbers about the US beer business, with a special focus on exclusive articles and analysis. Readers of Beer Marketer's INSIGHTS get the info necessary to stay abreast of the latest industry events, and the understanding of those events. Here's just a small sampling of what you'll find inside:

Beer Marketer's INSIGHTS is written by the most experienced and knowledgeable staff serving the industry. More execs keep up-to-date by reading Beer Marketer's INSIGHTS than any other beer industry publication.

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The 50/50 joint venture between Modelo and Constellation (Barton) will most likely instantly catapult to 2d-biggest player in US profit pool in first year of operation.   Modelo brands will produce well over $2 bil in revs and $500 mil in EBIT (earnings before interest and taxes) in 2006, while growing at a double-digit rate.  That’s economic power.  Compare to Miller’s $454 mil in EBITA in fiscal yr ended Mar 31, 2006 (down 7%) or Coors Americas $211 mil oper income in 2005.  If JV gets at least another couple of yrs of solid growth, Modelo/Barton JV could make as much as Miller and Coors put together in US (tho not as much as if Miller and Coors actually consolidated). Even volume numbers striking: Modelo should be almost 12 mil bbls in US in 2006; new JV will be easily #4 US supplier by volume, with about 6 share of mkt, closer to 10 share of profit pool.  Wow!!  Biggest beneficiary of new deal will be Modelo.   Why?  “First and most important,” Modelo ceo Carlos Fernandez noted in conference call, Modelo will “capture the margin” in the East.  And that’s some margin.   Modelo said that it will make more than $150…

Publishing Info

  • Year 2006
  • Volume 37
  • Issue # 13
I Imports up nearly 1 mil bbls, 12.7% thru Apr, led by Mexican shipments, so far up a stunning 690,000 bbls, 19%.  Modelo portfolio sales-to-retailers up 20% for Gambrinus thru May, sales director Don Lake told INSIGHTS.  This is acceleration from last yr, which was a pretty great yr for Mexican beer.  How great?  Top 3 Mexican brands up nearly 1.2 mil bbls, more than 2/3 of all import growth.  Corona Extra returned to double-digit growth after 2 years of gaining just 1-2%.  Up 745,000 bbls, 10.5%.  Grabbed over 30 share of imports, up 1 share.  Modelo Especial also took off: +305,000 bbls, 39% and grabbed #4 import slot from Labatt Blue.  Passed 1-mil-bbl mark, only 6th import brand ever to do that.  With Modelo Especial trends up 30-40% again so far this yr, should easily pass Tecate to become #3 import in 06.  That’s even tho Tecate also showing strong growth.  In 05, Tecate stayed about 80,000 bbls ahead with a 100,000-bbl, 9% increase.  So 3 of top-4 import brands of Mexican origin, nearly 40% of all imports in 05.        Shipments 000 2005 Chg   2000-2005 Chg   2005 2004 bbls % 2000 bbls % Corona…

Publishing Info

  • Year 2006
  • Volume 37
  • Issue # 12
Interesting how much focus AB prexy August Busch IV put on spirits in his recent comments to natl conference of state liquor administrators.  Most important, August said if beer continues to lose share of absolute alc volume – and AB has model that suggests it will – AB “will have to re-evaluate our business model going forward, expanding beyond beer and broadening our position within the total alcohol industry.”  Elsewhere, he said that consumer trends away from beer, combined with successful distiller lobbying for broader liquor availability and higher margins in spirits, creates “significant headwinds” for beer and again may force AB to look at “whether we get more aggressive” in spirits.”  When asked whether “reading between the lines” suggested AB might consider if not acquiring brands, then cutting deals to distribute some of the “powerful” brands now available as result of consolidation among spirits suppliers, August responded: “I think you read between the lines very clearly.”  Went on to call Diageo a “worthy competitor” who has used a lot of “leverage” with its distribs that has “made it tougher” for other brands in those houses.  AB believes its distrib network can “easily” and effectively distribute those brands “if we…

Publishing Info

  • Year 2006
  • Volume 37
  • Issue # 11
It’s official: imports had one slam-bang qtr. As estimated, imports up 810,000 bbls, 14.8% with Mexican shipments (+610,000 bbls, +25%) leading the way. Dutch, Canadian, German and UK shipments each up 7-8%. Big gains too from Belgium (+59%), Czech Republic (+34%) and Italy (+48%). Lagging: Irish (-15%) and Chinese (-4%) shipments. Craft brewers keepin’ pace. Boston reported shipments up 14% and STRs jumped 18%. What’s more, “orders in hand suggest that core shipments” for 2d qtr runnin’ up 17%. All of Boston’s core products up double-digits except Sam Lager. Boston also closer to pullin’ trigger on $70-$90 mil investment for new brewery in hometown area. Planned starting capacity: 700,000-1 mil bbls. Boston got hit by higher-than-anticipated costs in 1st qtr. So operating income took a 60% hit even while volume took off. But Boston “believes” ongoing volume growth will defray cost pressures for the yr. At Pyramid, volume jumped 15% in 1st qtr and it cut operating loss in half, but faces challenging comps in 2d qtr. Redhook reported volume up 18%, but that includes contract production for Widmer. Redhook-only volume up about 10%. Brewers Assn expects to report double-digit growth for craft brewers in 1st half, director Paul Gatza…

Publishing Info

  • Year 2006
  • Volume 37
  • Issue # 10
Did you notice?  In several different legal disputes or attempted brand transactions lately, distribs and/or supplier putting wildly varying value on brands that have become public knowledge (most of these reported by our e-mail letter INSIGHTS Express).  Sure, discounted cash flow is key, but these situations show that other factors play into valuation too, including relative bargaining power, projections of trends, brand health, consolidation, and other corporate objectives.   For example, legal filings in San Diego lawsuit involving Heineken Light brand extension revealed that distrib Mesa offered distrib Crest $3.25 mil or 2.5x last year’s gross profit for its 268,000 cases of Heineken biz.  Heineken viewed this as a typical price (about $13.00 per case).  But Crest turned around and offered over 5x GP, $17 mil (about $26 per case) to buy out Mesa’s Heineken biz.  That’s obviously not result HUSA wants, since it gave Mesa Heineken Light in Crest’s Heineken territory (Mesa sells FEMSA brands there).  Some suggest this is bargaining ploy to drive up value of Crest’s HUSA biz.  Meanwhile, AB offered Calif distribs 1x last yr’s GP for Grolsch.  That’s only about $4 per case from what INSIGHTS understands.  Recall, last yr when InBev USA sought to terminate…

Publishing Info

  • Year 2006
  • Volume 37
  • Issue # 7
After a decade of annual 3-5% growth, domestic light beer segment up only 1.5 mil bbls, 1.5% in 2005, we estimate.  And if you take out Bud Select, segment was down almost 1%.  What happened?  Tho Miller Lite and Coors Light each up, shipments of big kahuna Bud Light were flat for 1st time since its intro (that’s even tho depletions up 2%; we’ve revised brand numbers since Jan 30 issue.  More next issue.)  Up modestly: Busch Light and Keystone Light.  But those gains and Bud Select’s rollout partially offset by huge hit to Mich Ultra (-900,000 bbls), Aspen Edge crash, rare decline for Natty Light and continued erosion of Mich Light and MGD Light.  Still, domestic light segment passed 100 mil bbls for 1st time and grabbed 49.1 share.  Throw in top import lights – Corona, Amstel, Labatt Blue – that’s another 1.85 mil bbls – and light beer just hit 50 share.  Light beers have become the standard, the “establishment” so to speak.  Key in 06 will be whether light beer regains momentum or if domestic brewers gotta look elsewhere for growth.  Table above shows impact of high-end.  Once again, while total biz down slightly in 05, imports…

Publishing Info

  • Year 2006
  • Volume 37
  • Issue # 6