Beverage Dynamics

Beverage Dynamics May-June 2014

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

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28 Beverage Dynamics • May/June 2014 www.beveragedynamics.com The U.S. imported beer market is growing and diversifying as it taps into the needs of different consumer sets. I mports are growing in the U.S. beer market, even while overall sales are down, but im- port growth is uneven. Some players are strong, others losing share. Indeed, many see the import market as segmented into different opportunities, depending upon the type of beer and origins. Innovative new products and packs have enlivened the category. No one can ignore the infl uential American craft movement and the forces that are driving it, specif- ically, a craving for diverse offerings and experimentation, especially among the Millennials. Imports enjoyed decent sales in 2013, despite a generally moribund U.S. beer market; overall domestic beer volume was down 1.9%, according to Boulder, CO-based Brewers Association. However, the top 10 leading import brands were up 4.2% in 2013, according to Beverage Information Group's Handbook Advance 2014. But a few strong players carried the category. Overall, the imported beer category increased a modest 0.4%. "There was some mixed performance in imports in general," notes Ryan Verschoor, Tenth and Blake's director of imports and cider. "In the mainstream category, some of the big brands are in decline and others in growth." Five of the top 10 brands enjoyed positive growth, three up in double digits, according to Beverage Information Group research. The key player is Crown Imports, with three of those leading labels, all Mexican imports: Corona Extra (up 2.2%), Modelo Especial (rocketing 18%) and Corona Light (3.0%). "We have had some signifi cant success this past year, across our Mexican portfolio," notes Bill Hackett, president of Crown Imports. Last June, Victor, N.Y.-based Constellation Brands I BY THOMAS HENRY STRENK acquired ownership of Grupo Modelo's U.S. beer business from Anheuser-Busch InBev for some $4.75 billion. That trans- action included full ownership of Crown Imports, the brewery in Nava, Mexico, and license to import, market and sell Corona and the Modelo brands. "Across the cate- gory we have fi ve of the top 15 imported brands," says Hackett. Besides those three brands, the Crown portfolio includes Pacifi co and Victoria, also from Mexico, and Tsingtao from China. DIFFERENT WORLDS Like the U.S. beer business as a whole, the import market is hardly homogenous; it is segmented into several classes, and plays to different consumer sets and drinking occasions. "There is a dichotomy happening in the U.S. beer market industry: the high end, which includes imported and craft beers that seem to be gaining favor across con- sumers, while the premium domestic and subpremium seem to be losing favor," notes Hackett. He adds, "There is a changing dy- namic within the import category." "There is a defi nite split in imports," concurs Jeffrey H. Coleman, president and CEO of Paulaner HP USA. "Almost half of the import category is from Mexico, beers that have more in common with premium domestics, than they have with British ales, Belgian lambics or German lagers. Key brands for Paulaner HP USA are German producers Paulaner and Hacker-Pschorr, the British Fuller's Ales and O'Hara's, the Belgian Fruli and the Italian Birra Dolomiti. "The Mexican segment is really driving the import business as a whole." — Bill Hackett, President, Crown Imports BY THOMAS HENRY STRENK International Affairs

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