FOREIGN LEGIONS

498fl

Though consumers — and retailers — would hardly consider imported beer a hostile enemy, in the last few years the segment has made significant incursions into the U.S. beer market, mostly at the expense of domestic brews. Indeed, imported beer category sales grew 13.5% last year to more than 195 million 2.25-gallon cases, according to the Adams Handbook Advance 1998.

A number of factors are fueling the red-hot growth. Perhaps first and foremost is the healthy economy. High-end beers, including imports, are an affordable luxury. The surge in the number of micro and craft beers on the market in the past five years also has conditioned consumers to pay higher prices for what they perceive to be high-quality products, like imports. As long as the economy is strong, paying those prices is relatively easy for many consumers. In fact, the last time imported beers suffered a decline was during the recession of 1990 and 1991, when they were also hit with higher excise taxes.

“The industry is characterized by a parallel with the economy,” said Ron Christesson, vice president of marketing at Gambrinus, one of Corona’s two U.S. importers. “The aging population is drinking less but is able to drink better. It’s happening in a lot of product categories. Quality over quantity becomes key. Consumers look for something with intrinsic value. Starbucks is a good example — because of its quality, image and value, people will spend $1.50 for a cup of coffee that would otherwise cost 50 cents.”

While the strong economy has spurred growth of the whole specialty beer category, imports have benefited most. They have something that most domestic micros or craft beers don’t — credentials.

“There’s been an explosion in the above-premium, craft segment,” said Tom Cardella, vice president of marketing at Labatt USA. “As that segment has slowed, people are going back to imports because they offer a lot of variety, but more heritage and staying power.”

“Last year the segment benefited in part from the beginning of the fallout in the craft segment,” agreed Rich Lalley, director of allied brands at Miller Brewing. “Consumers are still looking for new and varied experiences, but from brands they’re familiar with and with brands that are more middle of the road from a taste standpoint.”

Import brand growth, in many cases, also has been self-perpetuating. The more brands have grown, the more money marketers have been able to plow back into them, building distribution and awareness among consumers. This year is no exception, as importers reported plenty of activity planned for their brands.

Import category growth was led by Mexican beers. Most south-of-the-border brands grew at a healthy pace last year, with Corona leading the pack.

“The biggest story in imports is the continued success of Corona,” said Bill Hackett, president of Barton Beers, Ltd., Corona’s importer for the western U.S. Nationally, sales of Corona Extra were up more than 35% last year, to more than 38 million 2.25 gallon cases. [When Corona Light’s 1997 sales of 1.85 million cases are added to Corona Extra’s figures, the Corona brand actually outdistances Heineken as the leading import brand, a new first.] Hackett attributes the brand’s success to consistent marketing over the years. “People say we’re lucky, but we have stayed the course and worked hard.”Corona’s fun-in-the-sun attitude has made it an extremely popular brand with consumers. As the brand has added new markets and reinvested in existing markets, that message has continued to build the franchise.

“There’s a lot of marketing behind the brand, but nothing extraordinary that has acted as a catalyst,” said Gambrinus’ Christesson. “We do pretty much the same thing every year but do it a little better each year.”

The brand’s upcoming Cinco de Mayo promotion is an example of the kind of successful program the brand has offered year after year. Merchandising materials like this year’s party kits have helped establish the holiday and associate it with Corona in consumers’ minds, even if they don’t know what Cinco de Mayo celebrates.

To help retailers create a party atmosphere anytime, the brand offers “Corona Zona” merchandising materials that can be used throughout the year. And, the brand’s 12-year association with Jimmy Buffet adds additional emphasis to Corona’s laid-back attitude on top of everything else. “Buffet doesn’t hit every market,” Christesson said, “but where he does, relationship marketing definitely helps sell more beer.”

Though Corona Extra is the most visible of the Grupo Modelo brands, every brand in the Modelo family outgrew the import category last year. Modelo Especial will join Corona Extra and Corona Light in a summer Corona Cabana promotion, as well as offering soccer-themed p-o-s . Negra Modelo is tying into cigars again this year. And Pacifico is in the middle of a “Road to Mazatlan” sweepstakes that offers lucky consumers a chance to win a Mexican getaway vacation.

Another reason Mexican beers have performed so well is their increasing appeal in Hispanic communities. Tecate, brewed by Femsa and imported by Labatt USA, has a very strong following among Hispanic males, for example. “It’s directed and targeted to Mexican-American markets,” said Cardella. “A new ad campaign this year will reveal a heritage message to those communities on Hispanic television, radio and outdoor.”

Labatt’s other Femsa brand, Dos Equis, is getting new positioning this year. New packaging and advertising are designed to make consumers think more often of picking up Dos Equis outside Mexican restaurant settings. The brand also has a Cinco de Mayo tie-in with Jose Cuervo planned.

Leading Imported Beer Brands

(Thousands of 2.25-Gallon Cases)

Brand

Brewer/Supplier

Origin

1996

1997

% Change ’96/’97

Corona (*)

Barton/Gambrinus

Mexico

29,700

39,950

34.5%

Heineken (**)

Heineken USA

Netherlands

37,035

39,600

6.9%

Molson Ice

Molson USA

Canada

11,900

11,500

-3.4%

Labatt Blue

Labatt USA

Canada

7,371

9,300

26.2%

Beck’s

Beck’s North America

Germany

6,582

7,396

12.4%

Guinness Stout

Guinness Import Co

Ireland

5,669

6,500

14.7%

Tecate

Labatt USA

Mexico

4,919

6,048

23.0%

Molson Golden

Molson USA

Canada

5,900

5,900

0.0%

Bass Ale

Guinness Import Co

UK

5,074

5,700

12.3%

Foster’s Lager

Molson USA

Canada

5,450

5,500

0.9%

Total Leading Brands

119,600

137,394

14.9%

Others

53,761

62,161

15.6%

Total Imported Beer

171,839

195,105

13.5%

(*) Includes Corona Extra and Corona Light.
(**) Includes Heineken and Heineken Dark.
Source: Adams Handbook Advance 1998

Labatt also is putting more muscle behind Sol, its challenger to Corona. Packaged in clear longnecks with the sun and its rays painted on the label, Sol is now being targeted at young adults with the tag “use your cabeza (head).”

Even smaller brands from the Caribbean and Latin America are gaining ground with both Hispanic and Anglo audiences in the U.S. Anheuser-Busch’s two entries, Rio Cristal from Brazil and Azteca from Mexico, are faring well in limited markets. Miller Brewing’s Presidente, from the Dominican Republic, has experienced explosive growth with Dominicans in New York and is being expanded up and down the East Coast.

NEW WORLD Alliances

As the beer business continues to become more global, big brewers jockey for position, strategically trading brands like players in a real-life game of Monopoly.

Anheuser-Busch shed Carlsberg, which wasn’t providing it with much volume and increased its stake in Grupo Modelo, brewer of Corona. Guinness Import Co. has divested itself of several Mexican brands as well as Moosehead in the past few years to concentrate on the select few in its portfolio. What will happen next?

“With the type of growth we’ve had, we’ve been flooded with requests to represent new brands,” said GIC’s Reggie Fils-Aimé. “But we want only world-class brands, and we have the luxury of picking and choosing. We’ll probably expand our portfolio, but we have no specific plans.”

The winner in all this latest brand shuffling appears to be Labatt USA. The importer picked up Dos Equis, Sol, and Carlsberg, in addition to its existing Canadian and Belgian brands, giving it one of the most diverse portfolios out there.

The real winners, however, may be retailers and consumers. Every time the deck gets reshuffled, brands usually get new attention and support.

British/Irish Invasion

A large number of the domestic micros and craft beers that have popped up in the past decade were styled after English and Irish ales, porters and stouts. Consumers are turning in increasing numbers to the brands that originated styles like India pale ale, extra special bitter, brown ale and stout. This impulse has helped propel Guinness to new heights in the U.S., as well as provide a solid consumer base for brands like Harp, Murphy’s and Beamish.

“Our brands obviously are doing very well,” said Reggie Fils-Aimé, vice president of marketing for Guinness Import Co. “Our total portfolio did somewhere north of 20% last year.”

This summer, Guinness will take its “Fleadh” program to more markets — such as Chicago and San Francisco — to give the Irish music festival more of a national feel. Last year’s inaugural event was limited to New York. Harp also will get more of a boost from the promotion, since GIC will be pushing “Half & Half” — half Guinness and half Harp — throughout the summer. Guinness also has tripled its television ad budget this year, which should give the brand even more exposure.

Bass gets its own slightly eccentric program this year. Ads have gone to the brink of kinky with a playful S&M theme in the spirit of English humor. This year’s summer promotion brings the brand back to its roots, so to speak, by offering consumers a chance to win thousands of items collected by Britain’s Lord Trent.

Murphy’s Irish Stout and Irish Amber also saw tremendous growth last year and continue to build distribution this year.

Euro-Smash

While the more mainstream Europeans beers didn’t grow as fast as hot Mexican and UK brews, most posted respectable gains last year. Perennial import leader Heineken saw sales grow 7% last year to more than 39 million 2.25-gallon cases.

The brand has an aggressive promotion schedule this year. To celebrate its 125th anniversary, Heineken developed a global program called “Seek A True Adventure.” In keeping with its international image as one the world’s most renowned trademarks, Heineken is giving away thousands of trips to destinations all over the globe to consumers in many of the 170 countries where it’s sold.

Amstel Light also is aggressively pushing its “Open for Anything” campaign this summer to get the brand back on a faster growth track. Along with the launch of full-calorie brands Amstel Bier and Amstel 1870 last year, Amstel Light used a dual campaign strategy to build consumer awareness.

Amstel and Amstel 1870 probably won’t roll out beyond their initial launch markets this year, according to brand manager Yuri Schwalbe. Last year’s campaign built brand awareness, Schwalbe said, but this year’s programs are intended to build more sales.

German beers, which have languished for several years, are making a comeback with consumers. Beck’s has changed strategies under new Beck’s North America president Bill Yetman. Sales last year were up more than 12%, the brand’s strongest performance in several years. The brand has consolidated its marketing dollars in two areas: permanent point-of-sale and media.

St. Pauli Girl reversed several years of sales declines last year, posting gains of more than 2%, according to A.C. Nielsen statistics. “The numbers give us some optimism,” said Barton’s Hackett. “It hasn’t been easy, but we’re starting to make some progress.” The brand is reworking the look of its package to make it more contemporary and is revising its creative approach to appeal more strongly to younger adults. St. Pauli Girl will get outdoor and radio support in key markets.

Coming From Canadian

Perhaps the only brands to really put the brakes on the imported beer category’s performance lately have been ice beers from Canada. But Canadian brewers’ other products have been doing fairly well. Labatt Blue has actually kept pace with some of the higher flyers in the category.

Both Labatt and Molson are pursuing a strategy of getting closer to their roots in an effort to distinguish their beers as clearly Canadian.

“Labatt has a real strong positive perception among consumers,” said Cardella. “We’ve done a better job of staying true to our core equities of Canadian heritage.”

A lot of that support will revolve around hockey, which works during a major portion of the year. During the summer, the brand will reprise its Canadian Outfitters program, offering consumers a chance to get all sorts of hiking and camping gear.

Labatt’s packaging was redesigned last year to give it more of a family look, and this year Labatt 50 was restaged as Canadian Ale with the new look.

Molson has been working on burnishing its own Canadian image to try to match Labatt Blue’s growth rate. New package graphics on Golden and Light introduced in February give prominence to Canada’s red maple leaf and provide a family look to the brands.

“The challenges we face on Molson are because of the unbelievable success of Molson Ice,” Lalley said. “It tripled the Molson brand in the US, but now it’s reverting back to more normal import levels. Now we’re working on the growth of Molson Golden and Molson Canadian.”

From now through May, Molson is pushing its Hockey Hall of Fame promotion, giving consumers a chance to be inducted into a “Hall of Fans.”

Moosehead also gets some attention from new importer Gambrinus. “Consumers have no negative baggage about Moosehead beer,” said Christesson. “Lack of awareness and availability are why consumers haven’t bought the brand. We’ve repositioned it at a new price in line with other imports with no discounting.”

Asian Invasion

Growth rates of Asian beers have lagged behind those of other imports somewhat, but importers see tremendous opportunities for their brands. Beers like Japan’s Kirin and Asahi, Thailand’s Singha, and China’s Tsingtao tend to be consumed primarily in Japanese, Thai or Chinese restaurants respectively.

“We own the Chinese restaurant segment,” Hackett said of Tsingtao, ” but we need to capitalize on the growing pan-Asian restaurant category. There’s a real opportunity to grow the brand.”

MAKE THE MOST OF Imports

  • Create distinctive shelf sets. Arrange brands by country and keep brand families together to create more impact on the shelf.
  • Use colorful and interesting signage to set your import section apart. Hang flags of different countries over each section.
  • Educate your customers about the imported beers you carry. Use case cards or shelf talkers to describe each beer or beer style. Post reviews from magazines to let customers know what the products taste like.
  • Make it easy for customers to find the style of beer they like. Color code your stock from the palest lagers and ales to the darkest stouts and doppelbocks.
  • Give customers an incentive to try different imports. Let them mix and match six-packs or purchase individual 12-ounce bottles. Offer “international” 12-packs at a special promotional price.
  • Cross-merchandise imported beers with other products in your store. For example, display imported beers with food or German beers with German wines.
  • Start an Around-The-World Beer Club. Award customers special prizes, such as T-shirts or glassware when they purchase a certain number of the brands you carry.
  • Communicate with customers by newsletter. Tell them about new items in stock, tastings and other promotions.

To broaden Tsingtao’s appeal beyond just occasion-based consumption in Chinese restaurants, Barton Beers is running a new outdoor campaign starting this month in San Francisco and New York. Capitalizing on the Chinese calendar’s year of the tiger, the ads tell consumers to “get in touch with your feline side.”

Probably the best-known Pacific Rim beer is Foster’s, although the Foster’s beer U.S. consumers purchase is produced in Canada these days. This year, Foster’s national ads are extended into several retail campaigns. The brand’s big summer promotion is the “Ultimate Aussie Adventure” sweepstakes. The promotion offers consumers a chance to win one of three Australian adventures, including a search for great white sharks and a trip into the outback.

Ultimately, whatever country they’re from, imported beers offer retailers tremendous profit opportunities. And as long as importers find ways to communicate their products’ heritage in a way that attracts the interest of young consumers coming into the category, imports will continue to grow. *

Leave a Reply

Your email address will not be published. Required fields are marked *