Private-label beer looks to soak up share from Corona

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A leading purveyor of private-label products is entering the imported-beer aisle as Topco Associates this summer introduces a Corona Extra wannabe called Baja. Another Mexican-style beer and a Dutch beer will follow.

But it'll be hard for barely advertised brews to dent sales of Corona, Heineken, Tecate and other leading imports, observers said, because image counts for a lot in the category. Consumers are willing to spend more for brands that have been backed with hundreds of millions in marketing support over the years.

"Of all the categories in the supermarket it's one of the most influenced by badge value," said Ken Harris, a partner in consultancy Cannondale Associates. "You're not going to tell anyone `I'm a Topco Corona-knockoff drinker."'

Maryruth Wilson, VP-brand and product innovation for Topco, conceded that labels count for a lot among imported beers: "It's more of an image category than milk."

But she said the brands stand a chance because they'll be priced lower than imports and because they have novelty value. Import buyers are willing to try new brews. "It's a category where the unknown has cachet."

As challenging as targeting imports will be, it's more realistic than trying to go up against the much more formidable marketing muscle of Anheuser-Busch or SABMiller. Those brands command massive marketing budgets and an array of low-price brands that makes it difficult for private label to gain entry.

The beer aisle, unlike other parts of grocery stores, is relatively untouched by private label. For the 52 weeks ended April 17, none of the top 130 beer sold at retail were private label, according to figures from ACNielsen.

retailer incursions

"It's still in its infancy," said Cory Stauder, VP-sales for importer G.K. Skaggs, who estimates private label represents 1% to 2% of import sales in supermarkets.

G.K. Skaggs imports private-label brews for Kroger and is partnering with Topco, which markets 30,000 items to about 50 grocery chains and wholesalers.

Retailers are making incursions. 7-Eleven last June introduced Santiago Cerveza de Oro at stores, while Kroger markets a Mexican-style beer called Caguama and a Dutch brew called Hollande 1620. Safeway has its own Mexican-style beer called Arriba and Albertson's markets San Lucas.

Besides Baja, Topco plans to roll out a Dutch beer called Guilder that will go up against Heineken. It also will introduce Culebra, a Mexican-style beer that will go up against Tecate.

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