Beer Growth Brands


Beverage Dynamics identifies the fastest-growing beer brands in the U.S. market.

BY JACK ROBERTIELLO

0510gbr1It’s been an interesting year for beer.

While the category overall had seen consistently modest growth for several years in the late 1990s to early 2000s, total beer consumption sagged to 2,818 million cases in 2003. Last year, however, brought a modicum of good news to the business, with a slight overall volume increase to 2,838 million 2.25-gallon cases. AdamsGrowthBrands'05

According to the Adams Beer Handbook 2005, the slight overall volume growth included a 0.5% increase in domestic beer volume and a 1.8% increase in imported beer volume. This is an improvement over 2003’s weak showing, but still short of 2002 growth, when domestics were up 0.7% and imported beer gained 6.0%.

Still, beer sales were up, which must be a relief to the industry, which has watched as spirit and wine dollars and volume shot through the roof. Total beer dollar volume increased by about 5.0% in 2004 to approximately $82 billion nationwide. This suggests that most brewers successfully held the line on pricing. But that line may have gotten weaker of late; recent news about stalled profits and price-cutting, including Anheuser-Busch’s recent report that a 10% quarterly profit plunge resulted from volume drops and cost increases, and predictions that the newly merged Molson Coors will reveal similar problems soon, have put a pall over the business. A-B has even said that it expects their profits to continue to fall for the rest of the year.

Three stories emerged in the domestic beer scene: the continuing fall of premium brands in favor of light beers, the growth of low-carb brews and the churn of the flavored malt beverage category.

Low-carb continued as a marketing scheme last year, with modest successes. Michelob Ultra followed its successful debut in late 2002 and its 41 million case peak in 2003 with 58 million cases last year, the largest percentage increase, 39.8%, among leading brands. Labatt’s Rock Green Light and Molson Coors’ Aspen Edge showed strength and joined Michelob Ultra as a Rising Star.

The malternative revolution of the past few years hit the wall in 2004, with some of the original successful brands taking major hits. For example, only Smirnoff Twisted V Ice (12.1 million cases) and Seagram’s Smooth (800,000 cases) of all malternatives made our growth list in 2004. Smirnoff Ice Triple Black, Bacardi Silver O3 and Bacardi Silver Raz, stars in 2003, all stalled or fell last year. But among craft brewers, Fat Tire Amber, Yuengling and Sierra Nevada all showed strong growth.

Among leading domestic premium brews, it was a story of the continued takeover by light beers. Anheuser-Busch’s Budweiser continued to lose ground, down 4.5%, while stable mate Bud Light, the best selling beer in America, grew 3.7% to 536 million cases. Miller Lite grew 11.1%, but all other leading non-light beers, and one light beer — Coors Light — sagged during 2004.

Among imported beers, Mexican beers continued to lead the charge, although the long-term boom of Corona slowed to a more stately pace, growing by 1.9% last year. Modelo (up 18.2%), Dos Equis (up 9.9%), Tecate (up 8.2%), Corona Light (up 6.9%) and Pacifico (up 5%) rounded out the Mexican juggernaut.

Overall, though, beer industry trends have maintained the same course for a number of years. The light beer category continues to do the industry’s heavy lifting, comprising nearly 50% of all beers consumed in the U.S. Sales of superpremium, craft and specialty beers as a group slowed again last year, but that seemed primarily due to the fast-fading FMBs, not the more hearty craft brews, which gained sales overall. Meanwhile, the premium, popular, malt liquor and ice beer segments continued to see their market shares decline. In other words, only light beers grew among the domestic categories last year.

BRAND POWER

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 results to highlight those brands that have demonstrated noteworthy increases over the past few years.

FAST TRACK BRANDS

Domestic Brands must have exceeded 9 million 2.25-gallon cases in 2004, and imported brands/microbrews must have exceeded 1.5 million 2.25-gallon cases in 2004, with double-digit growth over each of the past four years.

(000 2.25-Gallon cases)
Brand Supplier 2000 2001 2002 2003 2004 ’03/’04
% Chg
’00/’04
ACGR
Modelo Especial Barton Beers/ Gambrinus 5,248 6,657 7,759 9,268 10,951 18.2% 20.2%
Newcastle Brown Ale Scottish & Newcastle
Importers
3,475 3,953 4,391 5,093 5,600 10.0% 12.7%
Stella Artois InBev USA 232 490 981 1,568 2,359 50.4% 78.6%

ACGR Annual Compound Growth Rate

There are four categories of Growth Brands and the 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 2004 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 threshold of 1.50 million 2.25-gallon cases in 2004. All Fast Track Brands must have at least a five-year history.

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.

RISING STARS

Brands less than five full years of age that have exhibited substantial growth over the past few years.

(000 2.25-Gallon cases)
Brand Supplier 2002 2003 2004 ’03/’04
% Chg
Michelob Ultra Anheuser-Busch 5,900 41,500 58,000 39.8%
Smirnoff Twisted V Diageo-Guinness – – 1,288 12,075 ++
Aspen Edge Molson-Coors – – – – 4,500
Rock Green Light InBev USA – – 523 3,083 ++
Seagram’s Smooth United States Beverage – – 600 800 33.3%
Smithwick’s Diageo-Guinness – – 8 465 ++
Shiner Bock Light Gambrinus – – 95 239 ++

++ Greater than 100%.

In addition, 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. As in the Fast Track category, there is a threshold difference between domestic beers and import/craft brews.

ESTABLISHED GROWTH BRANDS

Top-selling growth brands that have grown moderately or substantially over the past four years. Brands must have exceeded 3 million 2.25-gallon cases in 2004.

(000 2.25-Gallon cases)
Brand Supplier 2000 2001 2002 2003 2004 ’03/’04
% Chg
’00/’04
ACGR
Bud Light Anheuser-Busch 436,000 469,500 505,000 517,000 536,000 3.7% 5.3%
Natural Light Anheuser-Busch 110,500 113,000 113,500 115,000 115,800 0.7% 1.2%
Corona Extra Barton Beers/
Gambrinus
74,000 85,119 91,224 96,105 97,930 1.9% 7.3%
Busch Light Anheuser-Busch 72,500 75,500 78,300 80,500 81,500 1.2% 3.0%
Heineken Heineken USA 54,000 56,800 62,400 62,500 63,125 1.0% 4.0%
Keystone Light Molson Coors 31,480 33,100 35,820 39,800 40,400 1.5% 6.4%
Natural Ice Anheuser-Busch 29,500 30,900 32,500 33,500 35,500 6.0% 4.7%
Yuengling
Traditional Lager
Yuengling
Brewery
9,000 13,860 16,336 17,859 18,594 4.1% 19.9%
Tecate InBev USA 11,024 12,019 13,109 13,464 14,569 8.2% 7.2%
Guinness Stout Diageo-Guinness 10,035 10,684 10,715 11,037 11,390 3.2% 3.2%
Amstel Light Heineken USA 7,100 8,500 9,770 9,980 10,400 4.2% 10.0%
Corona Light Barton Beers/
Gambrinus
4,626 5,823 6,979 8,142 8,705 6.9% 17.1%
Miller High Life Light Miller Brewing 3,900 4,300 4,900 6,200 7,500 21.0% 17.8%
Sierra Nevada
Pale Ale
Sierra Nevada
Brewing
6,032 6,626 7,106 7,165 7,314 2.1% 4.9%
Michelob
Amber Bock
Anheuser-Busch 4,000 4,500 5,570 6,300 6,800 7.9% 14.2%
Dos Equis InBev USA 4,424 4,861 4,997 5,337 5,865 9.9% 7.3%
Labatt Blue Light InBev USA 3,260 4,160 5,067 5,482 5,627 2.6% 14.6%
Pacifico Barton Beers/
Gambrinus
2,797 3,323 3,414 3,849 4,093 6.3% 10.0%
Fat Tire Amber Ale New Belgium Brewing 1,947 2,658 2,979 3,233 3,710 14.8% 17.5%

ACGR Annual Compound Growth Rate

Finally, there are brands that we have termed Comeback Brands, which are traced back only three years. This means that a Comeback Brand must have experienced a sales decline in 2003 (compared to 2002) but will have rebounded in 2004. Importantly, the 2004 sales rebound must at least equal (or better) the sales levels in 2002 from which the brand had declined. *

COMEBACK BRANDS

Brands that have rebounded in sales to at least the previous level after a recent decline.

(000 2.25-Gallon cases)
Brand Supplier

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