Beer Marketer's Insights
AB Has Different Numbers
than those stated by competitive execs in last issue of INSIGHTS. AB sharply differs with Heineken's view that it's mkt leader in Manhattan. Bud has over 2x the share of Heineken in Manhattan, said AB source. AB data on Hispanic and African-American consumption also vastly different from Coors'. Hispanics and African-Americans were 22% of population, AB sez, but just 19% of consumption in 2002. Expects jump to 25% of population and 22% of consumption by 2012. Coors had projected 40% of consumption from those groups by 2012. That's a big difference. Finally, Coors Light ad awareness spiked in late 02, but has since dipped, according to AB's internal tracking.
While many of largest wine and liquor distribs sell some beer, a number have long coveted getting bigger in malt bevs. Some significant steps in that direction early in 2003. Glazer
When Labatt USA takes over US rights from Guinness to 7.5-mil-case Bass brand, LUSA will jump to just about 5 mil bbls on annual basis. That
1st Qtr Blues: Worst Industry Start in 10 Yrs; Shipments Down Over 3%; Retail Not As Soft
Industry shipments picture sure is ugly: taxpaid shipments down estimated 1.5 mil bbls, 3.4% Jan-Mar. That includes 800,000-bbl, 5.2% drop in Mar, estimates Matt Hein of Beer Inst. Last time 1st-qtr shipments down 3% was 93, tho Matt reminds that industry ended that yr up. Gotta note too, looks like more-important sales-to-retail trend in 1st qtr down only slightly. For 12 mos thru Mar 2003, taxpaid shipments down nearly 1 mil bbls, 0.5%. AB is only big domestic brewer up, and even import gain slowed to just 3-4% for 12 mos, we estimate. At presstime Coors and SABMiller hadn
Latest fed court decision in long-running challenge to state bans of direct shipments came up mixed for distribs, 3-tier defenders. US Appeals Ct in 4th Circuit ruled that because NC laws ban out-of-state vintners from shipping direct but at same time allow in-state vintners to do so, there
When story broke that 7-Eleven will sell private label beer called Santiago, created lotsa controversy surrounding SABMiller involvement and questions of how it will be distributed. Priced at $5.99, Santiago is an import, brewed by La Constancia in El Salvador, imported by Latin Brews (a wholly-owned US subsidiary of La Constancia). Latin Brews already sells private label beers to several leading chains. Two elements of confusion in early reports revolved around whether this brand would be sold thru 3-tiers and whether SABMiller part-owned it. The answers appear to be yes and no, tho private label import still raises potentially troubling questions.
The largest convenience chain, 7-Eleven, initially said that Santiago would be distributed by Miller wholesalers and its own delivery network. Turns out it will be thru Miller distribs only. "We have explored a number of different distribution options," 7-Eleven bev category mgr told INSIGHTS. "At this time we are going through the Miller network." Not exactly an iron-clad commitment. In addition, the words "joint venture," erroneously used in early reports, implied SABMiller partly-owned venture. But both Miller and 7-Eleven say it's a straight contract brew agreement. Joint venture is between La Constancia and SABMiller. "Getting 7-Eleven a proprietary beer has been a pet project" of 7-Eleven ceo Jim Keyes, reported Dallas Morning News. Why? To "differentiate," 7-Eleven bev mgr said. Project in development for 2 yrs; talks with Latin Brews preceded SABMiller deal, she added. Beer and wine are 11% of 7-Eleven's sales (beer sold in 80% of stores). While total convenience store beer sales down slightly in 1st qtr, 7-Eleven beer sales up mid-single digits. Santiago will appear in 7-Eleven stores this spring, but will receive only in-store merchandising.
7-Eleven has previously shown a tendency to test limits of 3-tier. Recall that in 96-97, AB and 7-Eleven engaged in modified cross-docking test in Utah and Fla. But experiment didn't really work and was dropped. Here, Miller apparently didn't know about Santiago until 11th hour, and then went to some lengths to reassure distribs that it wouldn
AB Rev Per Bbl Up Near 3%, Promotions Down 5% in 1st Qtr; No Step Up In Discounting So Far
Strong pricing, moderate cost hikes led AB to 12% earnings gain, despite just 1% shipments gain. AB rev per bbl up 2.8% in 1st qtr, its 18th qtr in a row of over 2% pricing, cfo Randy Baker told analysts. This was "especially strong" given "difficult" comparison. In 1st qtr 02, AB rev per bbl had been up 3.8%, with almost 1 full point coming from Bacardi Silver intro. AB nudged its full yr guidance on rev per bbl up to 2.2-2.5%. That
While industry shipments fell into hole in 1st qtr, AB stayed pretty much on track. Shipments up 325,000 bbls, 1.3%, well ahead of 0.3% STR gain suggesting AB loaded a bit, but lots better than any other major supplier. In fact, AB grabbed 52 share of shipments, 1st time it passed 50 for a full qtr, by INSIGHTS
Beer biz in convenience stores down 0.6% thru March 22, according to ACNielsen, as $$ sales up 1.7%. Implies avg price paid for a case up more than 2%. Each of top 3 brewers
1st Qtr Blues: Worst Industry Start in 10 Yrs; Shipments Down Over 3%; Retail Not As Soft
Industry shipments picture sure is ugly: taxpaid shipments down estimated 1.5 mil bbls, 3.4% Jan-Mar. That includes 800,000-bbl, 5.2% drop in Mar, estimates Matt Hein of Beer Inst. Last time 1st-qtr shipments down 3% was 93, tho Matt reminds that industry ended that yr up. Gotta note too, looks like more-important sales-to-retail trend in 1st qtr down only slightly. For 12 mos thru Mar 2003, taxpaid shipments down nearly 1 mil bbls, 0.5%. AB is only big domestic brewer up, and even import gain slowed to just 3-4% for 12 mos, we estimate. At presstime Coors and SABMiller hadn