Beer Marketer's Insights

Beer Marketer's Insights

It's been a long time comin' but it will be here in Jan, "The Launch of the New Heineken Campaign" as an excited Chris Steffanci proclaimed in letter to distribs today. "Coming right out of the holiday, we're bringing an unprecedented total $7.2 million in incremental TV support for the Heineken equity," said Chris. New campaign will break the week of Jan 12, advertise on NFC championship game, etc. "At a time when many advertisers are dialing back media dollars, we'll come out swinging with new work that will reposition and drive equity in our flagship brand for the future." Distribs eager for new work on brand, which has weakened in recent mos. Heineken brand off 7.6% in c-stores and 4.4% in supers for 13 weeks thru Nov 30, according to IRI. "Entire" HUSA sales org "prepared to be in trade in force" in Jan, said Chris, including whole sales org "in retail" at a minimum "on Tuesdays & Thursdays." HUSA hopes to start 2009 "with a bang."

For some time, IRI has been building "All Scan" data base that scans over 11,500 c-stores nationwide, including biggest, most important chains. Now there's enuf back data that this new service provides richly detailed view of trends. Total c-store volume dropped 1.4% for 4 weeks thru Nov 30, (food store channel up 2.4%). C-store volume up 1.2% for 13 weeks. Interestingly, subpremiums gaining share at accelerated pace in c-stores. Up 1.9% for 4 weeks and gained 0.9 share of volume. Up 3.2% and gained 0.6 share for 13 weeks. That's even as avg price paid for subpremium beers up 7% for 4 weeks and over 5% for 13 weeks. So subpremium $$ sales up 9%+ in each period. A worrisome trend.

In all, AB has 61 share in c-stores. Its volume up 1.7% for 13 weeks and gained 0.3 share. But it dropped 1.5% and lost 0.1 share for 4 weeks. MillerCoors flat for 13 weeks and lost 0.4 share to 28 in c-stores. But relative performance improving; down 1.3 and held share for 4 weeks. So top 2 at 89 share of c-store volume. Top 2 importers another 6 share or so, but each down. Crown volume down 1.4% for 13 weeks (1.9% for 4 weeks) and Heineken USA down 1.7% for 13 weeks (5.1% for 4 weeks). Total import volume down 2.5% in Nov, 0.5% for 13 weeks. Even craft down 1% in c-stores for 4 weeks, tho still up 8% for 13 weeks. More info in BMI.

"After 16 years, Corona is leaving the beach-everywhere but in the US," began Ad Age article titled "Corona Ads Wander Away from the Beach." Sure enuf, Corona undergoing a "global repositioning" visible at its relaunched Corona.com website. Now emphasizes "refreshing moments." New brand position "handed down by Corona itself," Atmosphere BBDO (agency) creative director told Ad Age. But in US: "We're planning to staying on the beach," said Crown spokesman. "That's not going to change." Recently departed top Crown mktg exec Tom McNichols "a key advocate and defender of the beachfront strategy," wrote Ad Age.

These days some distribs are buying up smaller distribs in bunches. Crown Dist of Salina, Kans "finalized" purchases of Heartland Bev of Manhattan, Capital Dist of Topeka and MarKan Sales of Marysville, reported Salina Jnl. All 3 are Miller distribs, Crown previously sold only Coors. It had also bought 2 Coors distribs about 18 mos ago. Even with these 5 acquisitions, Crown will total about 2.7 mil cases. But that's up from about 600,000 cases Crown sold just 3 yrs ago. And Crown will now be 3d biggest distrib in Kans, prexy Mark Ritter told Jnl. Miller deals "had opportunity written all over them," Mark told INSIGHTS. Mark's adding some expense, but in effect, territory now being served by 5 warehouses will ultimately be served by Crown's current 2, and with fewer people. Deals leave MillerCoors with 6 distribs in state and MC consolidation ain't over yet. AB has a dozen distribs; Mark alone competes against 8. That delivery efficiency is a key competitive advantage, Mark sez, tho it also "creates some parity discrepancies" in pricing from time to time. Kans is one-FOB state, so all customers served out of given warehouse get same price.

Boston Beer ceo Jim Koch told both NY Times and US News and World Report recently that beer remains an "affordable luxury" and beer biz "recession-resistant," tho no biz "recession-proof." So far, Jim hasn't seen consumers cutting back on beer, but added "we're looking week by week at whether the economic situation is going to affect our drinkers." Told NY Times of recent encounter in Philly bar where server said high-end liquors takin' a hit. On another topic, Jim used same line in both papers when asked about now being America's largest independent brewer: "To me, this is like your kid's Little League team winning the World Series because nobody else showed up."

AB InBev "looks set to cull hundreds of jobs in the UK," yesterday's Independent reported. (AB InBev has 2,830 employees in UK, WSJ reported.) Mgt planned "to carry out restructures within a number of areas across the business," memo to employees said. Areas where cuts comin': previous AB sales and support staff, on- and off-premise InBev staff, plus employees in operations, finance and corp affairs, Independent sez. Meanwhile, AB prexy Dave Peacock granted 723,000 stock options just before Thanksgiving. Two plans allow him to exercise options between Jan 2014 and Nov 2018, and Jan 2019 and Nov 2023. Strike price is 10.5 euros. At presstime, AB InBev trading at 13.5 euros. Other execs, including planning veep Dave Almeida, also got options.

In "necessary but difficult move," AB prexy Dave Peacock announced today AB InBev will cut 1400 salaried positions in US, will not fill 250 positions currently open and eliminate 415 contractor positions. 75% of the 1400 will be in St Loo, and "most of the reductions will occur by the end of the year." These 2000+ in addition to the over-1000 who took retirement package by Nov 14, and part of planned $1.5 bil in synergies "identified by InBev" when it did deal. (When AB's own Blue Ocean project originally announced, AB talked about reducing workforce by 10-15% of 8600, or about 1300.) AB "pleased with US beer sales," said Dave, and will continue to invest in brands and increase efficiency. Job cuts "never easy," he added, "but will ensure the long-term success for AB and our employees." AB InBev anticipates cash expenditures of $213 mil associated with cuts, pre-tax expenses of $197 mil.

As we head into our 40th year, our flagship publication, authoritative newsletter Beer Marketer's INSIGHTS, will join Insights Express and be offered electronically for those readers who wish to receive it that way. You can still get it in the mail on orange paper or you can get it Monday morning via e-mail in HTML format. Your choice. Just let us know at This email address is being protected from spambots. You need JavaScript enabled to view it. if you'd like to make the switch.

"Beer seems to be the trendy drink among young people." So concluded Mark Hofmans, managing director of mkt research co GfK after extensive survey of 17,000 folks in 13 Euro Union countries, US, Russia, Turkey and Switzerland. Results reported in lengthy WSJ article today. Shift to beer most pronounced in traditionally wine-drinking countries like Italy and France. In Italy, 88% of those over age 50 prefer wine. But among 14-29 yr olds, 43% say beer is their favorite drink vs. just 29% who prefer wine. Similarly, in France, younger drinkers now prefer beer to wine 29% to 24%. "On the one hand," Hofmans said, "you might have some savvy marketing to young people, but there might also be a desire to defy traditions." Indeed, pendulum has swung the other way in UK, Belgium and Netherlands, traditional beer lands where wine is taking over. One surprising result: tho Western Europe generally considered a wetter culture than US, survey found 35% of respondents there don't drink at all. That's virtually the same as in latest Gallup poll in US. More disturbing: signs that "while young people in most European countries are drinking less frequently than their parents and grandparents, they are consuming more alcohol each time they drink." Some college surveys in US have suggested similar trends here.

NBWA's decision to reach out to public health advocates has paid a dividend. Long-time industry critic Marin Institute wrote a Nov 25 letter to Mich House of Reps to support law banning all retailers from shipping alc bevs direct to Mich consumers. That bill passed Mich house yesterday 97-9. Recall that recent fed court decision found Michigan discriminated against out-of-state retailers since it allowed only in-state retailers to ship direct. Rather than open up practice to all, legislature, with the support of the state wholesalers assn, passed law barring all direct retailer shipments. Marin supported law as "most effective solution" to the problem of minors' access to alcohol via the Internet "because there is already ample evidence that certain controls, such as labeling boxes and requiring ID upon delivery, are inadequate to protect youth." (Sound familiar?) Earlier this yr, NBWA prexy Craig Purser told INSIGHTS the assn ready and willing to "dialogue" with Marin and others in public health when interests align, including around "reasonable" state laws and regs. That dialogue continued recently when Marin's research and policy director Michele Simon made presentation at NBWA-sponsored legal symposium in Oct.