Exclusive news and research on the wine, spirits and beer business

Special Report: With Top Brands Sagging, Big Brewers Fill Pipeline With New Products

October 17, 2014

The U.S. beer market continues a paradigm shift whereby full-flavored craft beers are providing dynamic growth from a small but rapidly rising base. Despite challenging economic times, craft—or specialty—beers have been growing at steady double-digit rates for years, while imports have been posting solid low single-digit gains.

The U.S. market’s top four beer brands—Bud Light, Coors Light, Budweiser and Miller Lite—remain powerhouses, still accounting for more than 40% of total market volume. Still, all declined in 2013, according to Impact Databank. Although light beer remains the dominant force in the U.S. beer market, the segment has become over-saturated and brewers are competing for market share. After 30 years of consecutive growth, light beer began decreasing in the U.S. in 2009. The light segment and total beer category increased in 2012 because of the launch of Bud Light Platinum, which surged to 1.7 million barrels, but the higher-alcohol extension declined in 2013. Bud Light Lime Straw-Ber-Rita and Lime-A-Rita, though, have been contributing growth, supported with a “Fiesta Forever” campaign launched in June. Seasonal offering Bud Light Apple-Ahhh-Rita, meanwhile, is being introduced this fall.

Establishing itself as a global brand, Budweiser—which has not grown in the U.S. market in many years—posted a 6.4% gain to 42.5 million hectoliters worldwide last year, driven by growth in international markets like China. Budweiser, which sponsors NASCAR in the U.S., has benefited recently from successful FIFA World Cup campaigns, including Budweiser parties, social media, traditional television commercials and promotions at the retail tier.

Stateside, leading brewers have been capitalizing on the craft or specialty segment with product launches and line extensions focused on the flavor craze. AB InBev’s pace of new craft-style beer offerings has accelerated in recent years, including line extensions Shock Top Wheat IPA, Shock Top Lemon Shandy Wheat, Shock Top Honey Crisp Apple Wheat and Shock Top Chocolate Wheat; Budweiser Chelada Picante; Goose Island Madame Rose and Goose Island Lolita Belgian Ale. MillerCoors also launched specialty line extensions last year—three for Leinenkugel’s and one for Redd’s Apple Ale.

The seventh-ranked brewer worldwide, Golden, Colorado-based Molson Coors Brewing Co. is the only producer among the world’s top 15 to have its headquarters in the U.S. Molson Coors’ global volume decreased 3.1% in 2013 to 61.8 million hectoliters. Coors Light is the company’s lone brand ranked among the top 15 beer brands worldwide. MillerCoors, a joint venture between SABMiller and Molson Coors, reported total net sales increased 1.3% for the first half of 2014 with strong growth from specialty brands such as Redd’s, Leinenkugel’s and Miller Fortune. “We also continue to engage consumers around our flagship beers with big ideas like Miller Lite’s original can and Coors Light Summer Brew (Coors Light’s first U.S. line extension),” says Tom Long, CEO, MillerCoors.

 

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