Beer Marketer's Insights

Beer Marketer's Insights

Imports up 11% in supers thru Mar 31st, according to IRI. But Corona and Heineken growth continue to outpace segment; up 14% and 17% respectively. What?s more, Corona Light up 25% and Amstel Light up 28% as imported light beers continue hot, hot, hot! (Labatt Blue Light up 25% too.) In fact, Corona Light passed Labatt Blue to become #4 import in supers, Amstel Light now #7. Labatt Blue up 7%, but Labatt USA?s Tecate up 15% in supers. Beck?s and Foster?s also up mid-single digits in supers, a better trend than they have overall.
AB rev per bbl jumped almost 4% aided by intro of higher-priced Bacardi Silver as well as 1st qtr price hikes. Domestic shipments up 300,000 bbls, 1.4%, even with pipeline-filling for Bacardi, but AB also had 1 day less of inventory, it said. Sales-to-retailers up 2.1%. AB earnings per share were up 16%, and it raised guidance for full yr earnings to 13%.

The baton is passed and August IV has arrived at the top as prexy of brewing co at age 38. August III named chairman of the board, reducing his role at age 65 as he said he would. And Pat Stokes, 59, named prexy/ceo of all Anheuser Busch Cos.  That's gist of big mgt changes going into effect July 1 announced this morning at AB shareholder meeting. After 25 yrs as prexy/ceo, “it’s time for me to step aside,” August III told shareholders, adding that he is “happy, full of energy” and “young-at-heart.”  Said board asked him to continue as chairman for 5 years.  More in Beer Marketer’s INSIGHTS.

Coors prexy Leo Kiely had good response when asked at last weeks’ conference call whether new Coors Light ads “resonating” with consumers just older than the 21-27 yr-old target: “All I’ll say is that thank God all men think that they’re 22 yr-olds.  I don’t know how women think and I’ll never figure it out.”  “Best test,” Leo added, was “incredibly positive” distrib reaction so far.  Another Leo view: malternatives will be a "niche in the category,” but “it isn’t going to replace the sort of  ‘rite of passage’ role of beer for young adult males.”  Even in UK where ready-to-drinks bevs doin’ well for “younger crowd,” for 21-25 yr-old males, “beer is the game.” 

Freddy Heineken’s daughter, Charlene de Carvalho, said last week that Heineken family saw itself as “past, present and future” of Heineken, “fully sharing my father’s commitment…. As a family, we share the aspirations and ambitions of this company,”she said, according to Financial Times.  While analysts “view the family’s reluctance to dilute its controlling interest…as potentially restricting its ability to participate in global consolidation,” according to FT,  ex-Heineken chairman Karel Vuursteen said it had other forms of “creative financing” it could use.  Cited almost $1 bil cash and debt capacity of nearly $4 bil or a share issue.  Karel even named Molson as potential takeover candidate, tho he  added: “It is not for sale, but we can wait.”  Meanwhile, interesting to note that top execs of world’s 2 most profitable brewers stepping down at nearly same time. 

Miller/Coors guys could find themselves  with 7+ by fall, noted Deutsche Bank analyst Marc Greenberg, following his attendance at same 4-state distrib conference (see above).  Named 4 from Miller (with 3 different distillers), 2 from Diageo, 1 from Coors (Vibe).  Didn’t even mention Mike’s and/or Zima. “Many Miller wholesalers noted the difficulty going to retail with so many products and worry about the…effect on Miller’s core brands,” he wrote, “which are now resuming favorable trends.”  Marc also said: “Miller distributors are wary of a South African Breweries takeover.” 

There is “a likely reality” that the “beer, wine and spirits business is fast-folding into a larger drinks industry,” consultant Mark Rodman told 4-state distrib meeting last week (Pennsy, Md, Del and NJ) in provocative speech. Takin’ out his crystal ball, Mark said this points to “a reconfiguration of the entire beverage business to give suppliers more clout in a house.  With more clout,” Mark continued, “comes the capacity to grab a greater share of the profit centers of the middle-tier…. What brand owners demand is more of the profit pool.  Heaven knows they’re not going to get it from the power-buying retailers,” like Wal-Mart.  Mark pointed to Diageo’s current push to get more exclusive distribs, and postulated that other distillers/vintners would align with beer cos (including AB) for larger, blended distribution networks.

Bud Light was #1 brand in 4 of 10 big cities, according to 2001 sur-vey by Scarborough Research. Scarborough asked thousands of consumers in each city what brands they drank in mo prior to survey; consumers could name more than 1. Bud Light passed Coors Light in Dallas/Ft Worth, held on to top spot in Boston, Houston, Detroit. Bud regained top spot in NYC from Coors Light; held #1 in Miami/Ft Laud too. Corona on top in LA and San Fran, same as in 2000. Coors Light lost 2 #1 spots, but held on in Philly. Miller Lite stayed on top in Chi. An import among top-3 in 7 cities. A micro made top-5 in 4 cit-ies. Only 1 sub-premium brand made top-10 in these mkts: one-time Chi powerhouse Old Style #10 there.

Ebony mag put out its list, which included Colin Powell, Condolezza Rice and yup, Maris atty Willie Gary, whom Ebony referred to as “one of the wealthiest and most successful attorneys in the country.” At time of verdict, Willie had talked of other distribs seeking his services; nothing has surfaced so far.  At AB stockholder meeting last week, AB chairman August Busch III declined to comment on Maris trial because it’s “still in litigation.”  Meanwhile,  Jesse Jackson, whose son Yusef owns an AB distrib, is friendly with Willie.  In fact, Willie served as his atty in suit filed by Jesse’s mistress, according to bestseller Shakedown.

J. Walter Thompson is #1 at $590 mil in revs and Ogilvy& Mather #5 at $360 mil in revs, both used by Miller. Each had slight increases in 2001, according to Ad Week?s agency report card. Some Miller distribs upset that O&M also agency that authored idiotic govt ad which said in effect drink some beers, kill people. Probable that left hand doesn?t know what right one?s doing here though. One of AB?s agencies, DDB is #3, at $429 mil in revs, also up 0.5%. And Coors lead agency Foot Cone & Belding is #4 at $377 mil in revs, but that?s down 25%.