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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American Whiskeys & Beer www.beveragedynamics.com September/October 2015• Beverage Dynamics 51 BY JULIE JOHNSON Whether the American beer market looks basically healthy or in decline depends very much on your vantage point. If you lead an international brewing corporation with multiple brands and markets, the global potential of American beers seems positive. If your focus is the U.S. market, you worry that traditional brands are fl abby, and the strategic diversifi cation of the brewing portfolio is an appealing fi x. If you are on the brand team watch- ing one of the individual fl agship brands lose ground, buttressing its support among traditional drinkers feels urgent. But if you are selling beer locally, faced with changing tastes and demograph- ics, your task is to build the right brand mix to keep consumers coming back. Whatever you perspective, the beer market is still dominated by a relatively small number of large-selling, well-established brands whose volume dwarfs everything else. The ten top-sell- ing American beers on the market are all variants on the pale lager/light lager style; almost all have recently experienced one soft-to-bad year after another. Mainstream beer experienced a similar slump in the 1980s and recovered. The question now is whether the current slump is cyclical or fundamentally transformative. BIG BREWERS ON TOP Six of the ten top-selling beers are produced by Anheuser-Busch InBev. Of these, four have lost market share, some modestly (Busch Light, down 0.1%, and top-seller Bud Light, down 1.7%) and others more dramati- cally (Budweiser, down 4.6% and Natural Light, down 6.8%). The only beers to have grown in vol- ume are two that would seem to be at opposite ends of the AB spectrum: value brand Busch (up 2%) and prestige brand Michelob Ultra (up 2.3%). All numbers are from The Beverage Information & In- sight Group's Handbook Advance 2015. The remaining beers in the top ten, all produced by the other mega brewer, MillerCoors, faired worse, with the once-buoyant Coors Light retaining its number-two sales po- sition over Budweiser, partly because its loss of 3.5% was less than Bud's drop. Miller Light suffered moderate losses (1.6%), while Keystone Light and Miller High Life, at numbers nine and ten, sagged by 8% and 6% respectively. Looking at a broader fi eld of 25 top-sellers, the story contin- ues of fl at-to-discouraging numbers for many mainstream pale lagers and light lagers. Bucking the trend, Yuengling, which has been redefi ned into the craft beer club by the Brewers' Association, saw healthy growth of 6.4% for its lager; whereas Samuel Adams, which itself defi nes the upper reaches of the craft beer club, watched its fl agship Boston Lager slip 1.2%. Once again this year, we look at the biggest-selling brands in the country and the message seems to be that mainstream lager may outsell every other style of beer—by a lot—and yet the wind continues to go out of the sails. But it's worth asking: If you brew hundreds of millions of cases of beer in a year, does it matter if sales are a point or two lower than they were last year? At MillerCoors, it mattered enough to warrant a big shake-up at the top of the company. According to Marty Maloney, media relations, "Interim CEO Gavin Hattersley has made it clear neither he nor the company's board has been satis- fi ed with volume performance for some time, and as such, appointed a new chief marketing offi cer (David Kroll) and pres- ident of sales and distributor operations (Kevin Doyle)." Although both Coors Light and Miller Lite have grown relative to similar brands in their segment, Maloney adds, "The company is working hard to achieve both share and volume growth, and as such, plans to signifi cantly increase invest- ments in the second half of this year behind our Premium Light brands." In the fall, the company plans to bring back the 1975 Miller Steinie bottle. At the same time, "Coors Light will launch its The beer market is still dominated by a relatively small number of large-selling, well-established brands whose volume dwarfs everything else. TEMPORARY DECLINE OR GENERATIONAL SHIFT? AMERICAN BEER BRANDS CONFRONT A CHANGED MARKETPLACE