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/446939
24 Beverage Dynamics • January/February 2015 www.beveragedynamics.com I mported beer has enjoyed cachet in America since our earliest days. Bass Ale reached America from England in 1779. George Washington was especially fond of porter, the English style that grew to great popularity in 18th century London, only dropping his English sources out of loyalty to the new country. In the 19th century, new-style Bohemian pilsner beers set a standard that America's beer barons sought to match, eventually giving rise to distinctively American pale lagers. Following the consolidation of American brewing companies in the 20th century, imported beers became the best opportunity con- sumers had to sample styles beyond the dominant domestic beer style. To some American drinkers, the "imported" tag represented quality, sophistication and variety not associated with domestically-brewed beers. And yet, even as the number and volume of imported beers has grown, the "imported" label has lost much of its utility. Certainly, all imported beers share the fact that they originate outside the United States. But these days, to observe that a consumer prefers "imported beer" tells us about as much about his drinking habits as his ownership of an imported car tells us about what's parked in his garage. The import category makes up about 15 percent of the American beer market. Beyond sales fi gures for the top fi fty or so brands, numbers may be too small to permit rigorous anal- ysis of the sort we see applied to beers of domestic origin, which can be parsed into premium, sub-premium, super-premium, fl avored malt beverages, craft and the like. But conversations with importers, marketers and retailers suggest that a world of variety exists for both beers brands and beer drinkers within the monolithic category "import." I BY JULIE JOHNSON MEXICAN DOMINANCE The growth of the imported beer category is, more accurately, the growth of Mexican beer. Of the top-ten brands, half are from Mexico (All fi gures come from The Bever- age Information & Insights Group). More tellingly, across the 50 top-selling beers, Mexican brands grew by 5.5% in volume in 2013, while over the same period, Euro- pean imports and Canadian imports each fell by 3.7%. The leader in this successful category- within-a category is the former Crown Im- ports of Chicago, now the Beer Division of Constellation Brands. A 2013 deal saw Anheuser-Busch InBev purchasing the re- maining half of Mexican Grupo Modelo, and Constellation acquiring the Grupo Modelo brands for exclusive distribution in the United States—in the process becoming this country's third-largest beer company. Constellation's portfolio is made up entirely of Mexican beers (with the excep- tion of Tsingtao from China), and includes Corona, the number one-selling import, and Modelo Especial, the fastest growing Mexican brand, at 15.6% volume growth. According to Constellation, two im- portant demographic trends lie behind the appeal of Mexican beer: the growth of the Hispanic population in the U.S. and the coming of age of the Millennials, with some overlap among so-called "multiculturals"— generally Millennial-aged non-whites. Jim Sabia, Chief Marketing Offi cer of Constellation Brands Beer Division, noted that soon two out of fi ve new legal-age drinkers will be Hispanic. Despite the pos- sibility that other Latin American beers might appeal to this audience, Mexican brands enjoy the advantage of a long history in the United States. "As this group grows, we can gather these consumers into our franchise," Sabia says. "This isn't a new phenomenon for us. Modelo Especial has been growing by double digits for the last 20 years." The marketing challenge for Constel- lation is to differentiate its brands—which include four pale lagers and one low-calorie pale lager—both from one another and from the stylistically similar leading American brands, such as Budweiser or Coors. "We position our brands; some are emo- tionally positioned and some are rationally Is the term "import" still relevant in the retail marketplace? DISSECTING IMPORTED BEER