2d largest Mexican brewer Femsa reported export shipments to North America (virtually all in US) of 1.4 mil bbls, up 6.6%.  That was slowdown from 16% growth in 2000, double-digit gains 97-99.  Expects same 5-7% export volume gain in 2002. “In US dollar terms,” it said, total “export revenues increased by 7.3% to US$123mil.”  In Mexico, Femsa shipments eked out 0.7% gain to 18.76 mil bbls, but net sales up healthier 5.2% as avg price up 4.4%. 

 

Nebraska and Oregon. In Neb, three bills already in committee, including one that seeks 5-cent/gal increase to pay for, of all things, “maintaining state buildings, ” one earmarked for substance abuse prevention, one for general fund.  In Oreg, guv sez he supports mere “nickel-a-drink” hike, which would raise current 8-cent/gal tax (3d lowest in US) more than six-fold.  Jim Parker of Oreg Brewers Guild wrote solid analysis/attack on idea for Portland Oregonian op-ed.   Note: Neb tax proposal for beer-only, Oreg tax for beer and wine; neither state aimin’ at liquor for now.

Interesting distrib changes around Beantown. Another big name in AB network, the Sheehan family, recently acquired more than 250,000 cases of Modelo brands mostly from Colonial (Co-ors/imports) and partly from Martignetti Cos to sell at their Mass distrib L. Knife and Son (Sheehans also have distribs in NY and Wisc). Following sale of Corona, Colonial (Coors/imports owned by Frank Sousa) on acqui-sition trail. Looks like it will buy original home base of mega-distrib, JJ Taylor Cos, nearly 2 mil cases of mostly Miller in Mass. Colonial will become 3.5 mil case consolidated Miller/Coors house. JJ Taylor capping off very busy 18 mos: also bought Tampa, Fort Meyers, Sarasota and sold Miami, consolidating Miller/Coors in all its Fla mkts. It also owns high-share Miller house in Minn. JJ will still sell about 23 mil cases. Mean-while, Martignetti Cos also sold Molson brands to United Liquors and Harpoon back to Harpoon in Boston.

To “increase our participation in the high-end,” is “first” among short and longterm challenges, AB prexy/ceo Pat Stokes said in extensive interview with AB’s in-house publication Team Talk.  Bacardi Silver “is our most focused effort to date to gain share here,” he added.  AB also upping support for Michelob and Doc Otis, he added.   As for Modelo brands, “we’d like to be the importer,” Pat stated flatly, but “it just hasn’t happened.”  In meantime, AB gets 50% of Modelo’s profits, but “none of the importers’ profit.”  2d challenge: “We need to make sure that Budweiser and Bud Light remain viable choices for young  adults.”  3d: “We  need to protect our right to do business from attacks by critics of the alcohol beverage industry.”  Finally, a curveball.  “Bottled waters are becoming an increasing competitive factor,” Pat noted, and “will take share throughout the beverage industry.” 

Miller sr veep of sales Jim Mortensen will leave Miller; got promoted to vp sales & mktg of PM Intl in Japan.  At  Miller a little less than 3 yrs.  Had arrived when PM fired top Miller mgt and brought in whole new team of its “best and brightest.”  In recent mos, Miller trends finally getting better.  Another exec who came from PM in 99 also got promoted: Bob Mikulay now Miller’s exec veep in charge of sales as well as mktg. And finally Doug Brodman new Miller sr veep of sales.  Doug used to be vp sales for Van Munching in early 90s, selling Heineken. Then spent stint as region veep at Stroh and recently moved up ranks at Miller. 

Consultant Sam Boyer described provocative “fractionalization” theory at Mich-Ill mtg.  In Sam’s view, US beer biz likely to develop much like auto biz has, not dominated by 2-3 players, but by 7-10 strong suppliers.  That’s good news for multi-brand distribs, bad news for exclusive distribs and AB, which Sam believes will have to cope with “significantly lower market share.”  Right after Sam spoke, August Busch IV arrived for his speech.  Said he’d read Sam’s article on fractionalization in NBWA publication and discussed it at last wholesaler panel mtg.  Added: “Sam, if you’re right, I gotta go out and short the stock...  Can’t let that happen.  So, best of luck to you.”

Corona continues to "deplete in the mid-teens range," Constellation CFO Tom Summer told analysts in Phoenix. Said too that "we have not seen a dent in Corona's growth whatso-ever" from Smirnoff Ice. Even pointed to malternative upside for Corona: they're "expanding beverage alcohol consumption overall." Smirnoff Ice is "probably taking people up from lower price points into the price point that Smirnoff Ice and Corona are both at."

Miller exec veep of mktg & sales Bob Mikulay told mtg of Michigan/Illinois distribs to expect “continued increased investment” in current Miller Lite campaign and “substantial increase in ad spending" on High Life Man ads.  And tho Miller wants to “stake out a leading position” in malternatives, Bob emphasized “our substantial investment in this segment will be incremental to the investment we intend to put behind our core brands.”  Miller first on street in Chicago with a vodka-based malternative (SKYY Blue), Bob noted, as Smirnoff Ice still not available there.  “Nationally, our distributor orders so far for SKYY Blue are already double our original forecast,” Bob said.

Guinness Bass Import Co prexy John Replogle outlined GBIC plans to triple again by 2005 to 140 mil cases+ to natl sales conference.  GBIC has tripled from 15 to 45 mil cases in last 4 yrs, so why not try it again?  Easy, right?  John said GBIC will spend $250 mil on mktg next yr and add 100 people.  GBIC will also intro 1 new brand per qtr for next 8 qtrs. 

Single-minded focus of AB wholesalers “has become a  substantial competitive advantage,” AB prexy Pat Stokes told analysts.  AB estimates that Miller and Coors share about 240 distribs in US.  In 180 mkts it's down to AB distrib vs All Other distrib.  While AB distrib handles less than 30 brands, these other distribs, according to AB, represent about 40 different brewers and as many as 145 brands!  With more malternatives rolling out, “the problem in shared houses…is about to get worse,” sez Pat.