Beer Marketer's Insights
Given the dangerously increasing levels of diabetes in the US, the recent finding that among young women "light to moderate drinking was associated with a significantly lower risk" for type 2 diabetes "than lifelong abstention, even after adjustment for potential confounders," is important. Already 17 mil people in the US have diabetes, and incidence has increased 61% since 1991. Recently, the Centers for Disease Control projected that unless diets and exercise habits radically change, 1 in 3 Americans born in 2000 could eventually develop the disease.
In this study of over 100,000 women age 25-42, those who consumed 1 to 2 .5 drinks per day had 58% lower risk for diabetes than abstainers and/or ex-drinkers. That was after adjustment for age, body mass index, smoking, physical activity, family history of diabetes, and several other factors. Lighter drinkers reduced their risk by 20-33% compared to abstainers/ex-drinkers. "The lower risk associated with light to moderate drinking was more apparent in beer and wine drinkers" than spirits consumers, the authors noted. Women who drank
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Big Spend on High End Continued in 1<SUP>st</SUP> Qtr; 20% of Volume Got Over 40% of Media $$$
Suppliers/distribs kept pedal to metal to support high-end brands with media dollars in 1st qtr, according to CMR data. CMR measures spending in 10 media (some sources say these figures understate actual spending). Major high-end brands -- imports, malternatives, specialty beers and above-premium domestic brands -- got approx $100 mil media support in 1st qtr. That was 41% of all monies spent on major brands, for just over 20% of volume. And that
Wow! Some good news for a change. Barton Beer sales-to-retailers up 9% Mar-May, parent co Constellation ceo Richard Sands said. That
Heineken shocked European financial community when it announced its global first half profits would be just even as its volume declined in key markets like US, Netherlands, France and Greece (those mkts were about half of oper profits). Heineken pointed to a "combination of exceptional factors" including mostly weather and economy. That was 1st time it missed guidance to analysts since 1996, wrote Andrew Gowen of Lehmann Bros. And stock was subsequently punished, off 12% initially, then bounced back slightly. Heineken shares off about 1/3 last 12 mos. Closer to home, Heineken US sales-to-retailers up 1.5-2% in 1st half, but "in the Northeast we
"SABMiller’s US Hangover Just Won’t Budge," headlined Dow Jones, citing "raft of problems" Miller faces. "Tastes Great, Less Selling" front-paged Miller’s hometown paper stating AB "is on pace to dethrone Miller in Wisconsin." Miller losing share in home state "for the 4th year running," while AB keeps "building a larger following," it wrote. In 02, Miller at 45.2 compared to AB's 32.3. From 2000-2002, Miller lost 1.4 share of shipments, while AB gained 3.3, a swing of almost 5 points. Wisc share drop last few yrs "relatively modest," Miller spokesman Mike Hennick told Jnl Sentinel. Wisc Miller distribs told paper that they’re only down slightly (sales-to-retailers) so far in 03. But shipments down 14.5%, 102,000 bbls thru Apr as Miller reduced inventories, had malternative hangover, total biz down and its biz got softer. Wisc share shifting much more rapidly in 03: Miller at 42, AB at 35 thru Apr. That’s over a 6 point swing for AB so far this yr. Correction: In our e-mail/fax letter INSIGHTS Express we reported 40 to 35. That didn’t include Leinenkugel. Miller also down 170,000 bbls, 14% thru Apr in its largest state Tex, including 9% Apr drop. Miller off 90,000 bbls, 15% in Fla thru Mar. Miller volume off 14% in 12 states where data available thru Mar, down over 10% in 8.
Why are Miller trends generally so much worse this yr than before? Almost 1 yr into deal, SABMiller seems to still be getting its arms around what it bought. SABMiller’s annual report acknowledged "rate of decline increased over the past year" and blamed it on "a combination of factors" including "loss of management focus on core brands" after intro of 4 FMBs and "some understandable disruption during the transaction and subsequent integration." Then too, there is the mktg. Miller prexy Norman Adami had said "our single biggest deficiency" is "we haven’t created enough pull in the marketplace." Miller hasn't decided how best to create that pull. Miller’s search for a "unifying positioning" campaign is taking longer than expected; broadened search from its existing ad agencies to 4 or 5 US and UK shops not on roster, wrote Ad Week. SABMiller global mktg director Mark Sherrington in London has "become more actively involved lately," Adweek said. Another point: sometimes Miller seems to embrace distributor consolidation, other times to blame it. Shared houses, consolidation with Coors, "hasn’t really worked," SABMiller’s communications director Nick Chaloner told Dow Jones. "The biggest challenge Miller faces is to address its distribution issues and to get Miller in prime position on the shelves," he added. Miller elaborated to INSIGHTS: "The complexity of combining houses has caused initial operational issues for all parties" but "shared house strategy" addresses "scale issues confronting many" distribs and provides "a longterm platform" to compete "more effectively." Interestingly, SABMiller continues to be very active in global dealmaking/brand-building and reportedly remains frustrated that media/financial community focuses so much on its Miller headaches, rather than its successes elsewhere.
Beer volume in supers is almost dead-even yr-to-date thru Jun 15 (up 0.1%), according to IRI. And that
Odds and Ends
As of mid-Jun, broadly speaking, no one has pushed panic button on price, but there
Coors Statement on Nauslar Lawsuit
: No legal response filed yet to suit by ex-distrib Dennis Nauslar (see last issue of BMI) but Coors did issue statement: "Coors is extremely disappointed that Mr. Nauslar has chosen to take this step after successfully selling his business for over $57 million." Coors "will defend itself vigorously and we expect that the court will find Mr. Nauslar
Import segment has become as concentrated or more so than total US beer biz. Modelo, Heineken and various Interbrew brands were almost 80% of segment in US in 02. Modelo brands got over 35 share of imports, Heineken 23-24 (including its Fischer arm) and Interbrew has another 18-19 share. Other huge intl cos with brands in top 15 include Diageo, SABMiller, S&N and Molson/Coors. Top 10 import brands grabbed 75.9 share of imports in 02. Top 15 brands were fully 85% of imports. What