Beer Marketer's Insights

Beer Marketer's Insights

While most distribs that MillerCoors wanted to consolidate in Oh still in legal battle, at least 1 deal getting done: 750,000-case Acme Bev in Findlay, Oh selling to B&B Beer Dist from Grand Rapids, Mich. B&B slated by MC to buy several others. Heineken and Guinness going to Heidelberg in this deal.

Craft segment rolled in 06-07 with back-to-back 12% gains, but it slowed over course of 08. Likely up 5% or possibly even a bit less. Up solid 6.5% in 1st half, according to Brewers Assn. But slowed more markedly in 4th qtr scanner data. Up just 2.9% for 13 weeks thru Dec 28, according to IRI, including slight 0.5% drop in latest 4 weeks. Craft segment volume up 5% for full yr in supers.

Once again, many individual players far exceeded segment growth rate. In fact, segment leader Boston Beer up 8-9% in all channels for full yr, INSIGHTS estimates. Yet Boston hit a wall in supers in 4th qtr. Dropped 2.9%, which brought full yr gain back to 4.2% in that channel. While Boston lost steam in supers, Sierra picked up pace. Up 8.4% for 13 weeks in supers, 5.5% for full yr. New Belgium up 9% for yr in supers, but slowed some in qtr (up 5%). Deschutes flew in 4th qtr, up 21%. Gained 14% for yr.

Alarmingly, Sam Adams Boston Lager dropped 15% for 13 weeks. Six of top 10 craft brands down for 13 weeks in supers. Sierra Nevada Pale Ale, Fat Tire each down about 1.5%. Shiner off 3%. Sam Light off 20.5%. Widmer Hefe down 10%. What were big gainers? Seasonals. Sam Seasonals up 13% and Sierra Seasonals up 52% for 13 weeks.

Heineken will unveil new campaign during NFC championship game with a twist: it will now be for both Heineken and Heineken Premium Light. Jan 18 spot was originally going to be a Heineken Premium Light spot, with new Heineken spot debuting during Super Bowl. But "we have made an important strategic decision," Heineken USA chief mktg officer Christian McMahon wrote distribs: "Due to the strong consumer response and potential we are seeing in the new idea for Heineken, we are bringing Heineken Lager and Heineken Light together under the same platform." That's a big decision. Original idea of HPL almost the opposite: that it needed distinct campaign with huge expenditures to establish brand identity.

"No longer will we splinter our communications to the consumer with different messages," continued Christian, "but rather we will deliver a powerful umbrella message for the entire equity that can deliver each brand's individual positioning underneath it. This will add more substance and scale to the Heineken equity than we have ever had since the launch of HPL."

Shipped slightly over 1.8 mil bbls, nearly double what Yuengling sold in 2000. Picked up some expansion volume in Tenn and Ga, but good growth in Fla, Carolinas too, sez coo Dave Casinelli. Also improved trends in key eastern Pa mkts. Goal for 2009: 2 mil bbls in 180th anniversary yr. Should be doable if Yuengling grabs similar share in Ga (entered late 08) as Tenn and maintains trends elsewhere. In fact, Yuengling comin' on like gangbusters in Ga, we hear. Grabbed over 3.8 share for 4 weeks thru Dec 28 in Ga supers, according to IRI. Only been there since late Oct in part of state. Over 6 share in north Ga, sez source. Yuengling Lager was #1 package in grocery stores Thanksgiving week in "northern part of the state," Savannah Now reported earlier this week.

C-store sales soft in Dec too, tho not hit as hard as supermkt sales. Volume down 2% in c-stores for 4 wks thru Dec 27, reports Nielsen; $$ sales up 2.4%. Note: a coupla observers have pointed out that buy-in just before New Year's coulda made big difference in actual calendar Dec trends. We'll see when final figures reported. Top 2 did fine in this channel in Dec. AB $$ up 3.4%, share up 0.6. MillerCoors +4.3%, gained half-share. But top importers each took a hit: Crown -12%, Heineken USA -14% and Diageo down 12%. Lost 1.5 share between 'em.

At same time, more signs of trade down. Budget beer $$ +8%, near premium $$ +5.4%. So subpremiums gained 0.9 share in c-stores in Dec. Picked up 0.7 share of $$ in Q4. Superpremiums up 1.2 share in Dec (Bud Light Lime had 1.3 share alone.) Crafts picked up 0.2 share. But imports lost 1.3 share, FMBs lost 0.2 share. So high end lost 0.1 share in big holiday month. Premium biz lost full share. Key brand trends: Bud Light $$ sales +1.2% and Coors Light +9.5%, but Miller Lite -3.1% and Bud down 4.3%. Keystone Light rocketed: +31%. Other subpremiums scored solid gains: Natty Light, Busch and High Life each up mid-single digits; Busch Light, Natty Ice and Bud Ice each up 8-10%; Mil's Best Ice and PBR up 18-19%.

7 Tex AB distribs, including 3 largest, have deal to acquire 1.3 mil cases from giant wine and spirits distrib Glazer's (which last yr formed JV with Southern Wine and Spirits). Includes brands like Sierra Nevada, hot Tex micro St. Arnolds, Pyramid, Paulaner, even Boston Beer in parts of Houston. Deal is supposed to close at end of Jan. Glazer's reportedly selling off brands from 30 or so smaller suppliers in territories where it doesn't have beer warehouse, but keeping brands where it has full-service beer biz. Make no mistake, sez source, Glazer's still serious about beer. Even after transaction Glazer's will still be about 11 mil cases and looking to get bigger in beer. Another angle in this deal: largest AB distrib Silver Eagle and another 20-mil case operation L&F, will both become non-exclusive for 1st time, while Ben E. Keith adds considerably to non-AB volume. AB distribs going non-exclusive at accelerated pace. More in BMI.

Crown has "a fairly aggressive promotional program we're putting in place around the country," Constellation ceo Robert Sands said in conference call this morn. INSIGHTS has heard about expanded promos on Crown brands in Illinois (distribs unhappy about reduced front-line margins), but this is 1st we've heard about platform across US. This is not a shift from mktg $$, Robert added; Crown "will maintain strong" mktg, but employ increased promos, which it expects "to drive volume" by increasing features and displays with "attractive" consumer proposition. More details when we get 'em. Robert also said that while holiday beer sales "weren't stellar," they were "not as bad as currently published IRI data suggests," because last yr reporting period ended 12/30. In current environment , even more consumers "waited until last minute" to make purchase, so those last couple of days improved results for mo.

Still, total Crown $$ sales down 7.8% for 4 weeks thru Dec 28 in IRI and lost 0.7 share, with Corona and Corona Light each down 10% or so. So its relative performance weak for mo, while Tecate and Dos Equis $$ each up double-digits in period. Then again, HUSA's Dutch brands fared even worse as each of Heineken, Heineken Premium Light and Amstel Light down double digits. Even Newcastle Brown volume down double digits. Heineken has "Back-to-Black" sales drive in Jan, but given its price hike just going into effect in NY metro and economic conditions, as well as Crown not taking hike and "aggressive" promos, that could be tuff.

Speaking of Chi, that will be scene of upcoming CCIII, or Consolidation Conference III. Distributor consolidation is hottest topic in industry again. So Beer Marketer's INSIGHTS will host its 3d consolidation conference in downtown Chi in early May. It will be an intensive one-day conference focused on just one subject: beer distributor consolidation. We'll explore it from every angle, with lots of new insights, analysis and data. Confirmed speakers already include NBWA chairman Phil Terry, consultants Mike Mazzoni and Joe Thompson, First Bev Capital's Bill Anderson, and consultant Rob Klugman. We'll have a panel of supplier execs (MillerCoors participation confirmed), and a panel of financial execs. Stay tuned for more details, including registration, later this week.

Ever stop to think just how central Windy City has become to what goes on in US beer? It's not just advent of #2 MillerCoors (with its 30 share) and its corporate hq there later this yr. Largest importer Crown is there. And Pabst too. So 3 of top 6 US suppliers will have hq there, tho no big brewing facilities. Then too, largest distrib, Reyes Holdings has its hq in Chi suburb as well as its 10-mil case Chi Bev Systems downtown. And lead agency for AB, DDB, as well as MillerCoors' Draft FCB, both located there. Then too, both IRI and Nielsen, which provide industry with tons of critical data, based in Chi area.

While InBev made much of pledge to keep all US breweries open when it bought AB, search for synergies has apparently already sealed fate of UK brewery that makes AB brands. Citing "formal consultation on synergies arising from the merger" and "challenging market conditions" in UK, AB InBev plans to close centuries-old Stag brewery in Mortlake West London in 2010, after "full consultation" with employees, who "will be treated with respect throughout," InBev promised. Also in UK, InBev just decided to pull Tennent's 1885 brand it intro'd just last April, reports The Sun. Brewery staff complained that InBev pulled plug too early and didn't support brand properly, Sun sez, but InBev spokesperson said co decided to "focus on our main brand Tennent's Lager." Other recent signs that AB InBev not wasting time in making changes to reduce costs include: big St Lou layoffs (natch), ending policy of free beer sampling at theme parks (plus policy of free beer for theme park employees), closing of Russian brewery, talk of merging AB and InBev operations in small-but-promising Indian beer mkt.