By the 1980s, a new category had appeared, “microbrewed.” Overall and on-premise, sales were still dominated by the “domestic” category, featuring brands brewed by Anheuser-Busch, Miller and Coors. But as the 1980s bled into the 1990s, these stalwarts began to give way to new arrivals, not just craft beers but imports, too. The latter group really hit its stride in the new millennium with impressive growth in most years, according to statistics from the Beverage Information Group (BIG), Cheers’ parent company. The apex of this trend was achieved in 2007, according to BIG numbers, when the year-to-year growth of the category hit 13.9 percent.
Then arrived our currently challenging economic times and, perhaps inevitably, sales of imported beer first slowed, then fell, both overall and on-premise, as beer drinkers began to shy away from the familiar but more expensive imported brands. After years of growth, sales of imported beer were down 9.9 percent in 2009, according to BIG, and the import picture is less than rosy.
Or is it? Given the remarkable growth the category experienced through the first three-quarters of the last decade, recent declines may not be as bad as they seem. In some cases it could be argued that the recent slowing of sales is more a market adjustment than a decimation of the segment.
Modest Sales and StandOut Brands
One of the hardest hit brands in 2009, for example, was Heineken, with sales down 9 percent from the previous year. However, when compared to a pre-boom year such as 2003, sales of Heineken in 2009 slipped only 5 percent. And when one factors in sales of Heineken Light, introduced in 2006, the Heineken family actually is up 8.5 percent over 2003, according to figures supplied by BIG.
Some imported brands are doing well. Modelo Especial was up 7.8 percent according to BIG, Corona Light climbed 4.9 percent and Stella Artois grew by 10 percent, and the “Most Interesting Man in the World” advertising campaign for Dos Equis has stimulated sales, leading to 15 percent growth in 2009.
What is more, strong anecdotal evidence suggests that other, much smaller imported brands also are up, in some cases quite a bit.
David Farnworth, owner of the two Los Angeles area locations of Lucky Baldwins British Pub & Cafe, for instance, hasn’t noticed any significant decline in his imported beer sales. If anything, he says, there’s a blurring of the line between domestic and import to the point that it hardly matters any longer.
“The imports we have are still selling really well,” says Farnworth of a draft selection that includes Stella Artois, priced at $5 for a pint and the Belgian St. Feuillien Saison, at $9 a glass, and Belhaven Scottish Stout, priced at $6 a pint. “I don’t think that people even consider whether it’s imported or not. It’s more about the mood that they’re in and knowing what they want.”
With the exception of the better-known Stella Artois, Farnworth’s top sellers are principally brands that might best be described as craft-brewed imports from relatively small breweries able to capitalize on the popularity of the domestic craft category, the only on-premise segment that still showed growth in 2009, growing on-premise by 6.6 percent, according to BIG. This would seem to indicate that the lines of beer categorization may once again be shifting more to taste, style and overall character than product origin.
Keith Schlabs, food and beverage manager for the 14-unit, Dallas-based Flying Saucer chain of beer bars, thinks this might well be the case.
“Our customers are divided between those who like their pale ales and IPAs and such, and others…who are after the next, newest thing,” says Schlabs. He adds that some in the former class have grown more price sensitive of late, and that’s not necessarily true of the latter group.
“Beers coming from across the pond are getting more expensive,” says Schlabs, “but we still have a lot of imports moving in good volumes, especially those that don’t necessarily have a [domestic] craft brewed equivalent in their style.”
Schalbs points to the popular wheat beer segment, principally populated by Belgian wheat beers such as Anheuser-Busch InBev’s Hoegaarden and their domestically brewed equivalents, which include MillerCoors’s Blue Moon. The German version of the wheat beer is less common, and with the category still largely to themselves, German brands such as Franziskaner, priced at $4.75 pint at Flying Saucer and Schneider Weiss, which sells for $9 to $10 for a 500-ml bottle, depending on store location, continue to perform admirably.
Delving into Diverse Offerings
Tapping into the uniqueness of the imported beer field also is on the mind of Weston Spiegl, manager of standards and beverage for the seven-outlet, Disney-owned chain of ESPN Zone sports bars.
“The majority of lost import sales are coming simply because there is so much good beer being brewed domestically,” says Spiegl. The way to counter that is to offer new imports, like Modelo Especial, which he is testing in his Anaheim location.
“What we’re seeing on the West Coast, at least, is that people are really into discovering new brands, especially those from Mexico,” Spiegl says. He notes that Modelo is performing well but it underrepresented on-premise. For ESPN customers, then, the brand is familiar and, as a draft beer, new and unusual.
Tapping into that curiosity factor may prove to be the saving grace of the import segment. For as consumers continue to explore the new world of beer, and the distinctions between “craft,” “import” and “domestic” continue to blur, keeping your beer program fresh and vibrant will be increasingly vital to continued success.
