BEER BUSINESS

Cerveza Es Muy Caliente

In Mexico, cerveza fria means cold beer. And cold Mexican beer is one of the hottest commodities in the beverage alcohol business these days. All imported beers have been on a roll in recent years, but imports from our southern neighbor have dramatically outperformed the category. Last year, according to Adams Handbook Advance 2004, the total volume of imported beer consumed in the U.S. increased by 3.1% while domestic beer consumption declined by slightly more than 1%.

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An example of Corona Light’s recent new outdoor advertising campaign.

As it has been for more than a decade, Corona has been a brand on fire. In 1993, the brand was the number two import with 14 million 2.25 gallon cases sold and less than half the volume of Heineken. By the end of 2003, that figure had grown to 96 million cases, making Corona Extra the sixth largest brand in the U.S. market and giving it a 29% share of the entire imported beer market.

As amazing as the rise of Corona Extra has been, the performance of its sibling brand, Corona Light, has been even more impressive on a relative basis. Since 1993, the brand’s volume has increased more than eightfold, to 8.1 million cases last year. The success of both Corona Extra and Corona Light can be attributed to a number of things. First and foremost, in color and flavor profile they are very similar to the most popular domestic beers. They come in long-neck bottles with painted-on labels, which many consumers subtly associate with heritage and authenticity. And lastly, they carry the cachet of imported beer without any pretensions. The brand has also worked to associate itself with the laid-back lifestyle of a tropical vacation in its marketing and advertising. Corona Light recently announced the debut of a new outdoor campaign set to hit 25 key markets this month.

But it wasn’t only the Corona brands, imported jointly by Barton Beers and Gambrinus, that did well last year. Other brands produced in Mexico by Cerveceria Modelo have also been rolling up sales in the last few years. The fuller-bodied tawny gold Modelo Especial (+19.5%) and dark Negra Modelo (+8.6%) had growth figures to rival just about any in the industry. Pacifico, another lager in the Corona mold imported by Barton and Gambrinus, has created some excitement of its own. It enjoyed double-digit growth last year to a level of more than 3.6 million cases, a significant gain from the fewer than half a million cases it sold 10 years ago.

The other big importer of Mexican beers is Labatt USA, whose portfolio includes Tecate, Dos Equis (Amber and Special Lager), Sol, Carta Blanca and Bohemia. Growth among these brands has also been significant, but not to the same degree as the various Modelo brands. Tecate, the second-largest Mexican import, added a few hundred thousand cases to its total last year, bringing volume to 13.5 million, a fourfold increase from the 3.4 million cases it sold 10 years ago.

Tecate has taken a different tack than most of its competitors. Going against the traditional import bottled beer imagery, the brand proudly claims to be “the number one imported beer in a can in the U.S.” It also attempts to take advantage of its heritage and to build an emotional connection with Mexican-Americans. Toward that end, Labatt USA recently announced the launch of cervezatecate.com, an interactive and bilingual website. “We know there is a tremendous growth of Hispanics online, and an online community is a very effective method to establish a personal connection with consumers on a one-on-one basis — a good complement to our integrated marketing approach,” said Andrés Siefkin, senior brand manager for Tecate at Labatt USA, in announcing the new initiative. The site, which is accessible to consumers in either English or Spanish, showcases the brand’s personality and ongoing promotional activity.

The continued growth of the Spanish-speaking population in the U.S. has been a boon to the Mexican beer segment and is likely to continue contributing to its strong growth. According to federal government statistics, between the 1990 and 2000 censuses, the number of respondents claiming to be Hispanic increased more than 50% and surpassed the total population of African-Americans. The combined growth of this demographic, in conjunction with America’s love of imported beers and Mexican food, suggests that the heat around the Mexican beer segment can only intensify. — Robert Keane

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