The beer market is on pace this year to record a 2% boost in barrels, an increase that may sound like near beer, but it's welcome news to an industry that more typically has experienced annual volume declines since the mid-1980s, says Tom Pirko, president of Bevmark, a New York food and beverage consultancy.
Don Mann, Modelo products director for Gambrinus Co., says "imports are revolutionizing the beer industry," referring to double-digit annual growth in barrels from imports since 1994. Corona, marketed by Gambrinus East of the Mississippi, in 1998 became the first import to rank among the top 10 U.S. beers, growing 38% in total barrels from the previous year, according to Beer Marketer's Insights.
Some importers predict foreign beers will represent at least 12% of U.S. beer consumption by 2002. The growth template for such a mass is already in place. Imports, at 8% of market in 1998, have grown a percentage point of total market each year since 1996, according to BMI.
U.S. BREWERS SEEK IMPORTS
The major brewers are even seeking their own imports. Anheuser-Busch, controlling 47% of the U.S. market, owns just over half of Groupo Modelo, Mexico's largest brewer and maker of Corona. Miller Brewing Co. began importing Shanghai beer from China in February. It has carried Presidente from the Dominican Republic since 1995 and Australia's Fosters and Canada's Molson since 1993. Coors has no imports.
"What one used to think of as luxury has become status quo," says Mr. Mann, referring not only to imported beer but to other consumer products. Indeed, imports have moved from the coolers of more affluent Americans several years ago to children of Baby Boomers, affluent or not.
Reduced-calorie beers also are seeing rocket growth, up 5.6% in barrels in 1998 from the previous year versus a slight increase of 0.9% in barrels for all beers in the market, according to BMI. "People are concerned about their waistlines and about over-consumption of alcohol," says Jerry Steinman, BMI's publisher.
SUDS LIGHTEN UP
Light beers at the end of 1998 represented 38% of the U.S. beer market, up from 35.7% in the previous year, according to BMI. Four of the top six beers were lights; Bud Light is jockeying to dethrone the king of beers, Budweiser. No. 3 Miller Lite outsells Genuine Draft 3-to-1, and No. 4 Coors Light sells almost eight beers for every Coors bought.
Continued industry consolidation is leading to even bigger companies that advertise and promote their brands even more heavily. "The merged units become much more effective at lubricating the gears of sales," Mr. Pirko says.
Most recently, Stroh Brewing Co., formerly the No. 4 brewer, sold out to Miller and Pabst Brewing Co. As part of the deal, Miller agreed to increase contract brewing for Pabst, the new No. 4 brewer. The deal boosted Miller's market share to 22.5% from slightly more than 21%, and Pabst to 7% from 2%.
This year's volume jump, perhaps not coincidentally, comes with the end of aggressive discounting launched by Miller in the early 1990s. Mr. Pirko suggests the volume increase corresponds to increased advertising designed to stem an