The beer industry continues its march forward in the U.S. Beer sales have seen consistent incremental growth for a number of years, with consumption increasing modestly from 2,621 million 2.25 gallon cases in 1996 to 2,825 million 2.25 gallon cases in 2002, according to the Adams Beer Handbook 2003.
Last year, total beer consumption increased 1.3% compared to 2001, with imported beers gaining 6.0% to 321 million cases, and domestic brews upping sales by a more modest 0.7%, to 2.5 billion cases. Interestingly, total beer retail dollar sales grew at a faster pace than volume sales — up 6.4% to $74.4 billion — suggesting that brewers are engaging in less price promotion, as well as underlining the growth of the higher-priced imports and so-called “malternative” beverages.
With the exception of the introduction of these new malternatives, beer industry trends have maintained their direction for the past several years. The light beer segment continues to grab market share, with sales of light beer now representing approximately 46.4% all beers sold in the U.S. This assault is still being led by Bud Light, the top-selling beer in the country.
Superpremium and micro/specialty beers have resumed stunning growth, last year gaining an estimated 14.9%, though from a much smaller base than the light category. Meanwhile, the premium, popular, malt liquor and ice beer segments have all seen their market shares decline.
While identifying general trends is an important element in evaluating the health of an industry, brand equity remains the cornerstone of the beverage industry. Through economic uncertainty and industry consolidation, as well as fluctuating consumer tastes, specific brands of beer have grown more than others. A melding of resources, creativity, perseverance and just plain luck often go into developing a successful brand, and still, it remains somewhat of a mystery.
Indeed, there are beers in every category and at every price point that, for a variety of reasons, have either fallen behind or outpaced their competitors. And although identifying category consumption trends is helpful, actual brand activity is what generates profits. Thus, the rationale behind “Beer Growth Brands,” which uses the latest industry data to highlight brands that have demonstrated noteworthy increases.
There are four categories of Growth Brands; Fast Track represents the most demanding set of criteria. Domestic beers included in the Fast Track must have exceeded 9 million 2.25 gallon cases in 2002 with double-digit percentage growth over each of the past four years. Imported (and micro/specialty) beers included in the Fast Track met the same criteria, with their sales having exceeded a lower 1.75 million 2.25 gallon cases in 2002. All Fast Track Brands must have at least a five-year history.
In order to highlight traditionally top-selling beers that have consistently grown over the past four years, we’ve created an Established Growth Brands category. Because many of these brands are already operating from huge sales bases, their percentage gains are often modest relative to their overall case volume, even though these brands have had substantial sales increases and are often leaders in their respective segments.
Other brands that have shown significant growth over the past few years, but have not yet been on the market for a full five years, have been designated as Rising Stars.
Finally, there are Comeback Brands, and we have made the parameters for this Growth Brand category stricter this year. Comeback Brands will now be traced back only three years. This means that a Comeback Brand must have experienced a sales decline in 2001 (compared to 2000) but will have rebounded in 2002. Importantly, the 2002 sales rebound must at least equal (or better) the sales levels in 2000 from which the brand had declined.
Nine beer brands qualified for Fast Track, one more than last year. Six imports and three domestic brands are included, with domestics including two specialty/micro brews and a resurgent regional beer. Generally speaking, year-over-year sales figures for mainstream domestic beers begin from a much larger base than imports, making it considerably more difficult for them to qualify for the Fast Track.
Yuengling Brewing made its first appearance in recent memory on our lists, bursting to the head of Fast Track with Yuengling Traditional Lager. The beer, with a cult following in the Mid-Atlantic States, has combined its beer geek and brew pub credentials with substantial supermarket placements to grow to nearly 18 million cases last year, up nearly 18% in one year, while boasting a four-year annual compound growth rate (ACGR) of 34.4%. Yuengling, available only in PA, NY, NJ, DE, VA, MD, FL, NC and AL, is the oldest established brewery in America, and has grown in leaps and bounds since the 1999 purchase of the old Stroh’s brewery in Tampa, FL, the opening of a new facility in Pennsylvania and the reopening of the New York market in 2001.
Amstel Light has had an impressive run since 1998, demonstrating that “light” and “imported” is not an oxymoron. The brand increased 14.9% in 2002 to just under 10 million cases, and has a four-year ACGR of 17.1%. Indeed, two additional imported light beers returned to the Fast Track this year: Corona Light and Labatt Blue Light. Corona Light, imported from Mexico by Barton Beers and The Gambrinus Company, continues to make strides. The Mexican light beer gained almost 20% last year to just under 7 million cases, and has a four-year ACGR of 24.1%. For its part, Labatt Blue Light gained a hefty 21.8% in 2002, with sales of more than 5.1 million cases, while its four-year ACGR hit almost 33%.
Another Mexican beer from Barton and Gambrinus, Modelo Especial, also returned to the Fast Track. This year, the brand grew by 16.6%, to more than 7.75 million cases (a 23.1% ACGR).
At the height of the microbrew craze, Anheuser-Busch launched a line of craft beers, and Michelob Amber Bock appears to be the only one that consumers readily accepted. In its first year making the fast Track, Michelob Amber Bock gained an impressive 23.8% to 5.57 million cases, and notched a 29.2% four-year ACGR.
Both Newcastle Brown Ale (the British effort imported by Scottish & Newcastle) and Fat Tire Amber Ale (from New Belgium Brewing) made the Fast Track for the second year in a row. Newcastle grew 11.1% in 2002 to almost 4.4 million cases while Fat Tire, out of Fort Collins, CO, sold more than 3 million cases, with a four-year ACGR of 24.7%. Finally, Warsteiner, imported from Germany, had broken into the ranks of the Fast Track with 2002 sales of just over 1.75 million cases and a four-year ACGR of 12.0%.
The up-and-coming malternative sub-genre of beverages is no longer news. Though several brands have not done well, several have and they are included in our Rising Star category. Indeed, Michelob Ultra, from Anheuser-Busch, is the only traditional beer in the group. The new low-carb line extension benefited from its unique positioning as well as a heavy ad campaign focusing on personal sports activities to reach 2002 sales of 5.8 million cases.
Leading the pack is Smirnoff Ice, which gained another 10.1% in 2002 to more than 23.1 million cases. Recently, the brand created even more interest by launching a line extension, Smirnoff Ice Triple Black. Mike’s Hard Lemonade, which features a variety of flavors, has had good success in supermarkets and has grown dramatically over the past few years, with 2002 sales reaching 12.6 million cases. The two other major malternative players, Bacardi Silver and Skyy Blue, also had successful launch years, with Silver hitting 7.55 million cases and Blue reaching 6.9 million.
ESTABLISHED GROWTH BRANDS
Many of these beers are large-volume brands, leaders in their respective segments, which, in several instances, have been cited as Established Growth Brands before.
This year 20 beers qualified to be Established Growth brands. Once again, Bud Light leads the group, and continues to make strides as the best-selling beer in the U.S. at 505 million 2.25-gallon cases. The brand registered a 7.6% increase last year. Coors Light bumped its sales by 0.6% last year to 232.5 million 2.25-gallon cases, while Anheuser-Busch’s Natural Light and Busch Light upped sales to 113.5 million cases and 78.3 million cases respectively. As the top-selling imported beer and seventh best-selling beer overall, Corona Extra continued its growth with an impressive 7.2% gain to more than 91 million cases.
The second-best-selling import, Heineken, notched sales of 62.4 million cases, a 9.9% increase. Michelob Light added 1.0% to 40.4 million cases, and Keystone Light (Coors) generated sales of 35.8 million cases, a hefty 8.2% gain. A-B’s Natural Ice grew to 32.5 million cases, while Labatt Blue (Labatt USA) surged another 2.3% to more than 15.7 million cases. Imported from Mexico, Tecate, another Labatt USA brand, reported sales of more than 13.1 million cases (a 9.0% increase). Two brands from Diageo-Guinness USA showed continued growth: Guinness Stout notched more than the 10.7 million cases, and Bass Ale gained to just under 7.8 million cases.
Foster’s Lager (Miller Brewing) had another respectable year, garnering sales of more than 9.5 million cases, while Sierra Nevada Pale Ale continued its strong showing, gaining 7.2% to more than 7.1 million cases. Two more Mexican beers also made the list: Dos Equis (Labatt USA), with sales of just under 5 million cases (a 2.8% increase), and Pacifico (Barton Beers/Gambrinus), which jumped to sales of more than 3.4 million cases. Miller High Life Light posted a respectable 4.9 million cases (up 14.0%), while Widmer craft beer broke into the ranks with sales of more than 1.9 million cases, a 10.8% gain. Finally, Sapporo Black Label eclipsed 1.9 million cases, a sales increase of 3.8%
This final category recognizes those major brands that experienced a sales decline in 2001 and reversed that decline in 2002, showing positive sales that at least equaled the brand’s 2000 sales total. This year, the only beer that qualified as a Comeback Brand is Molson Canadian, from Molson USA. With a refocused marketing campaign and an effective distribution partnership with Coors, the brand powered ahead in 2002 by 34.3%, to more than 3.3 million cases.