ABI has piled on media expenditures since it bought Anheuser Busch (as INSIGHTS has noted a number of times).  Sales and mktg expenditures jumped fully $800 mil, estimated Redburn’s Chris Pitcher (backing number out from AmBev results which include Canada).  That’s an increase of 500 basis points of net sales.  Marketing and sales jumped from 12% of revs in 2008 to 16.8% in 2016, according to Redburn.  Yet, AB trends remain stubbornly at -2%.  Chris dubs this a “brand problem not a portfolio problem.”  While “we remain cautious on” AB’s “ability to turn” Bud Light, which he sez is down 17% from its peak, “gradual share stabilization” in Bud, plus “continued gains by the high end… increasingly offset persistent losses from Bud Light and the subpremium brands.”  That results in “structural share loss” of just 20 basis points by 2019 in Chris’s model. And contrary to many, Chris expects US mkt up 1% by then (that would be a switch). “This could be enough for ABInBev to stabilize its US volumes, which would be very meaningful for sentiment.”  

Redburn has buy on stock, also expecting improvement from Brazil.  After missing analyst estimates for the 7th straight qtr, ABI stock went down when it released “disappointing” results last week. But sentiment seems to have shaded positive since (stock bounced around).  Report in Seeking Alpha this morn said last qtr AB announced “all the bad financial news at one time” which “helps to reset expectations…. All the weak hands have been shaken out, creating an excellent buying opportunity” and “the inflection point has arrived.”

Mich Ultra $$ sales grew 26% and it gained 0.9 share nationally in Nielsen all outlet for 4 weeks thru Feb 25.  It’s now by far fastest growing brand, as it’s separating even from Modelo Especial, still stellar with $$ sales up 19% for 4 weeks and $$ share gain of 0.6.  Ultra behaving more and more like a really big brand.  Got lead position in Winn Dixie ad with $21.99 suitcase; that was a first, said source. But Ultra price only a buck more than advertised price in same ad for Bud Light, Miller Lite or Coors Light.  Corona and Heineken advertised at $20.49, for an 18 pack.  Ultra STRs up 19% in Fla thru Feb on selling-day adjusted basis.     

Beer didn’t get crushed on-premise last yr.  But nuthin’ to celebrate either.  Volume off 2% for the yr, according to Nielsen CGA data, with $$ down 0.7%.  Nielsen projects on-premise at about 34.5 mil bbls, near 16 share of total volume, similar to data prepared by Beer Inst for 2015.  But on-premise a significantly higher share of $$, with avg 12-oz serving at $3.75, case-equivalent price of near 90 bucks, Nielsen data suggests.  Avg off-premise prices about $23/case, about a buck a bottle.

Import volume up about 5% in 2016, $$ up 6%.  Craft up (just) 1% and 2.5% respectively.  (Nielsen’s not tracking taproom biz here, which is much healthier.)  Imports and craft combined for 47.7 share of volume, up 2.1, and 52 share of $$, up 2.2.  Domestic premium still near 40 share of volume, 35 share of $$, but down over 6% and shed about 2 share of each.  All other segments combined less than 15 share of on-premise biz.  Below premiums have just 3.2 share of volume, 2.4 share of $$ in channel.  Supplier share trends: AB dipped 0.9 share to just below 29 share of volume.  Lost 1.1 share of $$ to 27.1.  MC lost 0.6 share of each, to 20.8 share of volume, 19.3 share of $$. Constellation picked up 0.6 share of volume, 0.7 share of $$, grabbing 8.5 share of latter, even with still very small draft presence.  Heineken USA held share of $$ at 4.3, eked out 0.1 share gain of volume.  Next 4 suppliers each stung in channel: Boston, Yuengling, Diageo and Pabst.  Huge tail of All Others, nearly 1/3 of all on-premise $$, up 1.4 share last yr.  

Key brand trends pretty predictable too.  Top 4 domestic brands each lost significant volume and $$ sales.  Coors Light had best trend: volume -4% and down 0.2 share.  Bud down 9%, Bud Light down 7% for combined Bud Light/Bud share loss of 1.3.  Miller Lite down 5%.  Corona on-premise volume flat in 2016, sez Nielsen, tho it gained share.  But Modelo Especial up 20%+, up 0.4 share.  Michelob Ultra not as hot on-premise as off-, but still up 11%, picked up 0.3 share.  Similarly, Stella’s on-premise trend slower than off-premise, +5%.  Top 10 brands have about 50 share of on-premise volume, collectively lost 1 share last yr.     

The first batch of data from our annual compilation of critical industry numbers – 2017 Beer Industry Update – is now available and ready for e-mail delivery.  Early birds have already received the files.  Data includes industry totals for 2016, top 10 brewer trends, segment info, top brand info, off-premise trends and much more.  Analysis by beer marketer’s INSIGHTS editors and 4-color graphs bring the numbers to life.  Order your copy of the 2017 Beer Industry Update now and save $100.  The final version of Update will be ready by June 1, with state and region data, packaging stats, on- premise data, brewer profiles and more.  Or you can reserve a print edition of the book, available June 15.  Click here to order. We’ll e-mail you the first batch of data immediately.    

Even as volatile FMB segment takin’ tuff hit to start year and several sizable brand families suffering, large cos continue to launch new brands and ramp up mktg spend within category.  Just in the last couple weeks, AB announced natl TV campaign for Ritas specifically targeting women, Best Damn natl TV campaign, new Cream Soda flavor and Best Damn Tea launch in test mkts. MC officially launched Henry’s Hard Sparkling and plans to give it “robust”  national marketing campaign, including stations like TBS, Food Network, Bravo, USA, ESPN and Comedy Central among others, per release.  Finally, Pabst officially launched “Not Your Mom’s Flavored Brews,” under Small Town umbrella.  Flavors include Not Your Mom’s Apple Pie, Strawberry Rhubarb and Iced Tea flavors available in 6pks of 12oz bottles at $10.99 suggested retail and 24oz single cans of Iced Tea for $2.49.  Then too, several new flavor variants introduced this yr under AB’s Rita family and MC’s adding new Redd’s flavors, reviving Zima and testing Zumbida.  

FMBs Down in Nielsen  FMB volume down 4.4%, $$ down 5.5% yr-to-date thru Feb 25 in Nielsen all-outlet as avg prices down 35 cents, 1% per case.  AB’s Ritas down low-double-digits to start out 2017 in scans, following 2 yrs of declines.  Similarly, MC’s Redd’s down low-double-digits to start year after declining in 2016 for first time since launched.  And while each adding new flavors this year, Not Your Father’s franchise down 60% YTD and Henry’s sodas down nearly 50% for latest 4 wks, near 30% YTD in Nielsen data thru Feb 25.  Best Damn family down 50% plus thru Feb 19 in IRI multi-outlet + convenience data.   Can new innovations and heavier ad spends shore things up for AB, MC and Pabst FMBs this yr?

Meanwhile, Mike’s Hard Lemonade Co still rolling (+11% YTD) and Boston Beer’s Twisted Tea (+17%) continues to shine, and Diageo’s Smirnoff brand family comin’ off a solid growth year, tho still well off its peak.  NAB’s Seagram’s Escape portfolio and alc seltzers (both counted separately from beer sales in scans) continue to grow, but currently too small to curb category trend.  Lots of puts and takes  per usual in this category.  If trends continue, this will be first time FMBs decline in many years.   Last yr, FMBs got 7.5 share of Nielsen $$ and 5.2 share of volume.  This yr segment shed 0.5 share of  $$ and 0.2 share of volume to 6.7 and 4.7 respectively thru Feb 25.

Economy segment volume up 0.1% and it gained 0.2 share as avg price decreases steepened in latest 4 weeks thru Feb 25 in Nielsen all-outlet.  Avg economy brand prices dropped 22 cents 1.4% for 4 weeks.  Many of largest economy brands had steeper price cuts than that.  Nine of MC’s top 10 economy brands had lower avg prices in latest 4 weeks. Only High Life avg prices up by a penny (HL volume up 5% too).  But avg Keystone Light prices down 54 cents, 3.6% with volume still down.  Hamm’s prices down $1.25 per case, 9%, tho volume of small brand up 18%.  Even with these reduced prices, MillerCoors lost 0.5 share of subpremiums for 4 weeks and yr-to-date.  AB also reduced avg prices on its lead subpremium brands: Busch, Busch Light and Bud Ice.  All show solid gains yr-to-date with avg price decreases of about 2%. Natty Light continues down 1%, with prices down 6 cents.  While avg price of all 4 of those brands down, Natty Ice prices up slightly as is its volume.   

Between all MC’s price cuts on subpremium brands, and less than 1% price realization on premium brands, MC total avg prices dipped into negative territory for 4 weeks.  Down 3 cents per case to $19.98, while AB avg prices up 18 cents to $20.90.  AB total volume down 1.5% and MC down 1.7% YTD.  

Import shipments started year solid: shipments up 240K bbls, 9.9%, reports Beer Inst economist Michael Uhrich based on Commerce Dept stats.  One-mo trends, especially early in yr, always all over the place, but most countries reported gains outta the gate.  Mexican shipments up 134K bbls, 8%.  Dutch shipments really revved up: +82K bbls, 26%, following very sluggish ’16 (-6%).  And Belgian shipments soared 44K bbls, 55%.  Also up: shipments from Canada, Germany, Italy, Dominican and Czech Republics.  Down for the month: Irish and UK shipments.  With Jan domestic taxpaids up estimated 260K bbls, beer biz got off to running start, at least shipments-wise: up 500K bbls, 3.3%.  That’s best Jan since 2012.   Meanwhile, exports also cranked in Jan: +153K bbls, 61%.