Beer Marketer's Insights

Beer Marketer's Insights

Import volume up 9% in supers Jan-Mar 25 while overall beer biz flat, according to IRI. Leader Corona Extra up just 4%, lost 1.1 share of import segment in qtr. But 2 other Modelo brands ? Corona Light, Pacifico ? up double digits. Heineken still rockin': up 12%. Other double-digit gainers: Guinness Pub, Amstel Light, and Dos Equis. Tecate up 6%, but Labatt Blue up just 2.6%. Foster's off 1%. Molson Ice down 25%. Beck's barely up.
But still expects ?low to mid-teens growth? for Modelo brands in 2001. Tho Barton Beers revs up $8.3 mil, 7.4% in latest qtr ended Feb 28, depletions up in mid-teens, said Richard Sands, Constellation ceo (Barton?s parent co). Asked about Corona?s not-as-hot Mar scanner data , Constellation CEO Richard Sands explained that ?in large chains? in Southern Calif which ?heavily influence? scanner data, Con-stellation seeing ?a slowdown in growth of Corona, particularly Extra,? tho its other Mexican brands doin? fine. For 12 mos thru Feb, Barton Beers revs jumped a very healthy $89 mil, 15.6% to $659 mil. Barton also sold $286 mil of spirits in fiscal yr. Total Barton oper income (including spirits) hit $168 mil for yr, up $26, mil 17%. That was 62% of parent co Constellation?s oper income, but 39% of revs.
Asked if it would be possible to get Bud brand growing in US again, AB group veep August Busch IV said ?yes? and told Bev Mktg Conference that Bud brand ?growing in 25 states? and that AB ?very pleased? with recent Bud brand performance, especially given several rev ?enhancement? opportunities (price increases) AB took on Bud in recent yrs. Over last 18 mos, AB took steps that ?reinvented? Bud image including new script packaging, stadium signage, POS, ads, etc. Bud now ?perceived? as more ?sophisticated,? said August, which is a ?critical factor ? allowing the brand to better compete against high-end and European imports.? After August showed ?How ya doin? Bud ad, loaded with local (NY-NJ) accents, he quipped: ?It was pretty hard to convince my father that was going to sell beer.?
04/09/2001

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There he goes again. NYC mayor Rudy Giuliani is about to propose a ?citywide booze ban that would outlaw liquor at all outdoor events,? said NY Post today. Hizzonner and hizzminions had already been reducing number of permits that allowed alc bev sales at thousands of annual street fairs, festivals and block parties. Deputy mayor told Post that process was ?arbitrary,? so they decided to make ban ?perma-nent? and pursue ?zero tolerance? for alc bev sales at outdoor events. Ironically, this push stems from violence that occurred after a parade last year where no alcohol was for sale.
During Q&A at recent NBWA/Brewers Legislative Conf, Beer Inst prexy Jeff Becker was asked to respond to potential question from legislators of how an excise tax rollback would affect consumer prices. Jeff pointed out that all costs?taxes, raw materials, etc?are ultimately borne by consumer. ?And when we reduce costs, we certainly hope the rest of the chain? passes that on to consumer, but brewers ?can?t dictate retail prices? any more than distribs can. Brewers seek $9/bbl roll back in fed tax. That?s 65 cents/case, plus whatever?s tacked on by each tier. Avg price/case equivalent in supermkts in 2000: $15.13.
While AB is giant in beer biz, its $1.5 bil in net income is only 1/10th what most profitable US co made in 2000. Exxon Mobil had net income of $16 bil last yr, #1 in Forbes ranking. AB came in at #75, while PM at #7 ($8.5 bil net income. Miller at just 4% of its profits). One of AB?s top customers, Wal-Mart was #14 with $6.3 bil net income. 150 cos got greater revs than AB ($12.2 bil) in 2000. Wal-Mart was #2 at $191 bil. But AB at #63 in market cap. Fun Forbes factoid for beleaguered investors: Cisco, Microsoft, Intel, Oracle and Lucent lost over $1 tril in mkt cap for 12 mos thru mid-March.
Shortly after judge tossed Maris RICO claim, he whit-tled suit down further by granting summary judgment to dismiss distribs Bernie Little and Burkhardt Dist from Maris complaint. He also tossed 2 more of Maris claims against AB. Meanwhile, Roger Maris?s son visited a different Bush yesterday. President Bush, that is. Roger Maris Jr was at White House for screening of HBO movie titled?61? about his Dad?s magical baseball yr and relationship with Mickey Mantle. Was long-running legal battle between Maris family and AB mentioned?
Top execs helped put up good numbers for Coors in 2000 and reaped re-wards. Prexy Pete got 10.8% pay hike to $727K, plus bonus boost of nearly 50% to $564K. CEO Leo Kiely barely missed makin? a mil in salary/bonus: salary up 10% to $569K, bonus bumped 41% to $429K. Over last 2 yrs, Pete?s bonus jumped 93%, Leo?s 58%. CFO Tim Wolf got salary of $361K (+5%), bonus of $190K (+18%). Each got lotsa stock options too. Meanwhile, Chairman Bill still modestly paid at $339K, a 6% hike in 2000, and got no bonus.
First Miller was going to have a front-line increase in Chi in Feb. Then Miller rescinded, but said it would get same effect from discount reductions. But on Apr 2, Miller actually deep-ened its discounts by about 60 cents in its largest mkt. Can other brewers be far behind? At NBWA meeting, AB sales veep Mike Brooks told AB distribs that AB had recently seen some stepup in discounting by competi-tors, and Miller sr veep sales Jim Mortenson also spoke to group of distribs of signs of ?softening? pricing.