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.
Issue link: https://read.dmtmag.com/i/379477
www.beveragedynamics.com September/October 2014 • Beverage Dynamics 33 Beer: State-of-the-Industry Report brands over similarly-styled domestics. Of the ten top-selling imported beers, seven are mainstream lager styles, two are light beers, and only one—Guinness Stout—offers a stylistic alternative. No brand has capitalized on this aura of so- phistication as effectively as Dos Equis, whose Most Interesting Man in the World character manages to embody the essence of cool. Now in its sixth year, the ad campaign is largely credited with the Mexican pale lager's hand- some growth: 18% in 2013. Heineken USA, the brand's import house, had less luck with its fl agship Heineken brand. Despite a loss of 4%, Heineken, once the country's leading import, holds the second position in sales. Crown Imports, the leading beer import company and home to number one import Corona and the other Modelo brands, is now re-christened Constellation Brands Beer Di- vision following consolidations in 2012. Bill Hackett, president of Crown and now of the Constellation division, describes the beer ac- quisition as "the most transformational event in Constellation's almost 70 year history," es- tablishing Constellation Brands as the number three beer company in the United States. As brewer, importer and marketer, the Beer Division has an unusual role in the U.S. industry. Hackett described the change: "Throughout the transition, we had to re- main focused on maintaining our industry leading momentum and couldn't allow the commercial side of the business to become distracted. At the same time we had to quickly build out the operational side of the business." This included a doubling of the Piedras Negras Brewery in Mexico to supply the U.S. market. Constellation is entirely focused on Mex- ican beers, with the exception of Tsingtao from China. The company balances the ap- peal of its brands to the American Hispanic drinker with the Millennial drinker that is every producer's holy grail. Hackett explains "Our insights show that consumers' tastes are evolving. Today's beer drinker is more willing to trade-up as they are introduced to imports and crafts with more taste. This is important to note because Corona Light has two times the IBU's (International Bitterness Units) as the average domestic light, giving the brand a true taste advantage in the category." With the consolidation in 2012 of the Modelo imports under Constellation, An- heuser-Busch was out of the Mexican beer market in the United States. This summer, AB has introduced Montejo, a golden lager that is its fi rst import from Mexico. CRAFT AND ITS IMITATORS Strategists observing beer consumers see fatigue with established brands and a quest among Millennials for something new. The solution often mashes together cocktails, nov- elty beverages and craft beer. While this may capture a restless young audience, craft beer supporters will resent being asked to join that particular marketing club. Craft beer protects its exclusivity. As a David among Goliaths, sometimes exclu- sivity was all that the category had. The steady growth of the craft beer category over the past decade or so has spawned a few problems, but problems that any indus- try should be happy to have: that of imi- tation and challenges to authenticity that come with enviable success. That success means that in a survey like this one, crafty, craft-like, and craft-inspired beers have to be considered alongside the BA-sanctioned genuine article, because many consumers make no distinction. Bart Watson is the chief economist with the Brewers Association, which is devoted to the defi nition and interests of craft brew- eries. According to Watson, craft brew grew by 18% in 2013; what's more, "not only was it strong, it was coming from an increasing number of players, which in the long run makes it more sustainable." By end of last year, 2,822 breweries were operating in the U.S., with 2,768 considered craft by the BA. Eleven years ago, then-BA president Kim (000 2.25-Gallon Cases) 2012 2013 '12/13' Category Cases Share (%) Cases Share (%) % Change Domestic Beer Craft 185,220 6.5% 211,150 7.5% 14.0% Flavored Malt Beverages 80,020 2.8 82,150 2.9 2.7 Super Premium & Premium 403,630 14.1 394,750 14.0 -2.2 Light 1,442,120 50.4 1,382,990 49.1 -4.1 Popular 213,690 7.5 207,920 7.4 -2.7 Malt Liquor 66,550 2.3 64,420 2.3 -3.2 Ice 101,280 3.5 102,290 3.6 1.0 Total Domestic Beer 2,492,510 87.0% 2,445,670 86.8% -1.9% Total Imported Beer 371,220 13.0% 372,800 13.2% 0.4% Total Beer 2,863,730 100.0% 2,818,470 100.0% -1.6% CONSUMPTION OF BEER BY CATEGORY (000 2.25-Gallon Cases) 2012 2013 Supplier Cases Share Cases Share % Change AB InBev 1,343,400 46.9% 1,304,441 46.3% -2.9% MillerCoors Brewing 816,150 28.5% 791,666 28.1% -3.0% Crown Imports 167,855 5.9% 178,094 6.3% 6.1% Heineken USA 115,540 4.0% 114,847 4.1% -0.6% Pabst Brewing 78,255 2.7% 75,986 2.7% -2.9% Yuengling Brewery 38,400 1.3% 37,555 1.3% -2.2% N.A. Breweries 37,500 1.3% 35,813 1.3% -4.5% Boston Beer 36,920 1.3% 45,412 1.6% 23.0% Diageo-Guinness USA 32,840 1.1% 30,180 1.1% -8.1% Mike's Hard Beverage 18,550 0.6% 19,570 0.7% 5.5% Total Leading Suppliers 2,685,410 93.8% 2,633,564 93.4% -1.9% Others 137,061 4.8% 137,061 4.9% 0.0% Total Beer 2,863,730 100.0% 2,818,470 100.0% -1.6% BEER MARKET SHIPMENTS BY SUPPLIER