The past 12 months have been rough, both for beverage pros and the world beyond. We’ve had a solid year of bad economic news—possibly the worst since the Great Depression—with banks and major corporations failing, credit drying up, unemployment in the double digits, consumers slashing their spending and investments of all types taking a beating. It is enough to drive you to drink, and it has: Beer’s up.
Beer sales are one of the few bright spots in the current economy; beer is up half a percent overall, according to the Beer Handbook 2009, recently published by Cheers parent The Beverage Information Group. Overall, beer sales reached 2,940,300 cases in 2008.
Traditionally, beer has been recession-proof, although the cautious term this year is “recession-resistant.” The caution certainly applies to imports, at least, which haven’t done as well as the beer market overall due to trading down by price-conscious consumers; the category lost 5.4 percent last year.
“Imports are still having a very difficult time in 2009,” confirms Eric Schmidt, manager of information services at the Beverage Information Group. “Year-to-date sales through May are down 11.1 percent [based on numbers] from the Beer Institute, with continued declines by leading imported brands Corona and Heineken.” There still were quite a few bright spots in the imported beer category, however, as we’ll see below.
Light beer, the largest category, was a mixed bag. Most continued to perform strongly, including bargain brands such as Natural Light and Keystone Light. But Miller Lite and Heineken Premium Light both declined in sales.
“Miller Lite has had a difficult time,” says Schmidt. “Increased competition from Bud Light Lime and the introduction of MGD 64 has been taking some volume away.” He notes that Coors Light continues to do well, though.
Craft beer also has been selling well. Although Sierra Nevada Pale Ale lost 2.3 percent, the craft-like Blue Moon continued its incredible growth last year, increasing by 30 percent.
The 2009 Beer Growth Brands identifies beer brands that achieved notable growth for the year 2008. To determine which brands qualify as Beer Growth Brands, The Beverage Information Group’s research division examines annual sales data to identify the brands experiencing growth in recent years, segmenting them into four categories: Rising Stars, Fast Track Brands, Established Growth Brands and Comeback Brands. These are the beer brands driving the trends and growth in the overall beer market; they are worth examining by on-premise operators eager to capitalize on what consumers are buying today.
Keep Your Eyes on the Fast Track
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The volume leader is Modelo Especial, the value brand stablemate of Corona. Modelo racked up 12.2 percent growth last year with a solid volume of nearly 25.2 million cases. Stella Artois, continuing to benefit from Anheuser-Busch’s huge distribution network, was up 26.7 percent.
“We have a huge success with Stella,” says Cindy Busi, worldwide director of beverage for the Orlando-based, 42-unit Hard Rock International, “especially with our European connection. We continue to see this beer grow in sales each year as more people become aware of it.”
While Stella is selling well, the brew with the strongest growth the past five years has been Blue Moon, which has an annual compound growth rate of 60.2 percent since 2004. It racked up another 30 percent gain in 2008.
“We have had huge success with Blue Moon,” says Patrick Kirk, marketing and brand manager for Minneapolis-based Buffalo Wild Wings, which has 601 restaurants nationwide. “The Blue Moon brand resonates with our core demographic, and draft wheat beers in general are very popular at Buffalo Wild Wings.”
Kirk also is bullish on the new member of the Fast Track group, Dos Equis. “They have a great ad campaign behind the brand with ‘The Most Interesting Man in The World,’” he says. Something’s working: Dos Equis surged from the Established Growth pack to become a Fast Track brand with its 12.6 percent sales increase in 2008.
Diageo’s Smithwick’s rounds out the group. The red Irish ale continues to gain friends, posting 11.3 percent growth last year to stay on our Fast Track list.
Rising Stars Shake the Firmament
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Rising Stars represent the newest brands and some of the hottest trends; our list includes brands less than five years old that exhibit notable growth. Three of this year’s crop track the new flavored beer trend. Two others try to expand the light beer category, and two represent Anheuser-Busch InBev’s latest attempts at capturing some of the craft beer magic.
Mainstream beer rules by delivering light, crisp refreshment without a lot of heavy flavors. But craft brewers have been adding flavor for years—and consumers are drinking it up. Mothership Wit, a Rising Star this year, is one example. It grew 52.5 percent to reach 154,000 cases last year. But now the big brewers have found that the right flavor, marketed the right way, can bring a nice payday.
One of them is the biggest of this year’s Rising Stars, Bud Light Lime, which burst on the scene in May, 2008 and sold the equivalent of 30 million cases, more than any other Rising Star or Fast Track brand. Compare this with other recent success stories: Miller Chill debuted at 7 million cases in 2007, according to numbers by The Beverage Information Group, and Michelob Ultra rung up 5.9 million cases in its first year, reaching sales of 41.5 million cases in year two. Bud Light Lime had a very good first year indeed.
Another success for A-B InBev has been the combined sales of their Chelada beers—Budweiser and Bud Light blended with Clamato and spices. The beers largely are marketed to a Latino audience that already was mixing its beer with Clamato. A-B InBev decided to pre-mix for convenience, and it has been working; Chelada sales doubled from 2 million cases in 2007 to 4 million last year.
The question is whether these beers will last. Miller Chill, another light beer with a taste of lime, was down to 5 million cases in 2008. Schmidt also notes that Bud Select’s 2005 launch netted 32.4 million cases and now is under 20 million cases per year. Any flavor can fall out of favor.
A more reliable segment is light beer. Rising Star MGD 64, with its 64 calories in 12 ounces, had a good initial outing, selling 750,000 cases. The other light beer on the list is Tecate Light from the Heineken USA stable. Tecate Light looks likely to catch some of the same wind that has filled Corona Light’s sails so handily, and with a 50 percent growth last year to reach 1.2 million cases, it’s doing well.
Landshark Lager also crashed the party last year with A-B InBev distribution muscle and a cachet of beach vacation fun. It still is cruising, exhibiting sales of 4 million cases and a growth rate of 60 percent last year. Budweiser American Ale is another success for A-B InBev, moving one million cases in its first year.
Established Growth Brands Keep Sales Coming
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Corona Light bucked the bad news that’s dogged Corona, which was down 5 percent last year, by increasing sales a solid 5.1 percent, bringing its total to 12.8 million cases and an annual compound growth rate of 10.1 percent since 2004. Tecate also did well, growing 8.3 percent to nearly reach sales of 21 million cases.
Not just big breweries have become established Growth Brands. Yuengling Traditional Lager made the list with 6.4 percent growth last year, giving it sales of almost 25 million cases. Samuel Adams Boston Lager was up 6.5 percent on volume of 13.2 million cases, too, as were several other smaller brands such as Fat Tire Amber Ale and Widmer Hefeweizen. Shiner Bock continues to grow incrementally, inching up 5.6 percent to reach nearly 4.6 million cases in 2008.
“We have for many years mandated Sam Adams,” says Hard Rock’s Busi, affirming its place at the bar. “It continues to outperform most of the other craft beers.”
The two outliers in this category have singular constituencies that represent opportunity for the right venue. Sparks is the only flavored beer on the list, and it continues to grow under new owner MillerCoors (despite losing its “energy” in a deal with several state attorneys general): 14.7 percent growth took it to 8.6 million cases and an astounding compound annual growth rate of 53.5 percent, second-highest of all this year’s brands. MillerCoors also continues to find success with the hi-test Steel Reserve, which smoothly moved up 3.1 percent.
Don’t Count Out Comeback Brands
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Last year, four MillerCoors brands regained their previous glory. This year, with the economy so tight, only Crown Import’s Pacifico was able to stage a comeback. The brown-bottle stablemate to Corona eked out a 1.4 percent gain after the previous year’s fall. Welcome back.