How Did They Do?
its title as the largest brewer in the world last year when Belgium’s
InBev became the largest brewer by volume. But the King of Beers still
holds the top spot in beer sales, and last year increased shipments to
wholesalers 0.4 percent. The company holds nearly half of the total U.S.
beer market, but its share was down a tenth of a point from 2003. For the
first quarter of this year, A-B has reported domestic volumes are down 2.7
percent vs. the same period last year.
The St. Louis-based brewer has increased its marketing
spending 6 to 7 percent for 2005 and will put patriotism front and center
with a “Here’s to the Heroes Tour 2005” that will let
consumers record messages to U.S. soldiers. The company is playing up its
“made in the USA” advantage now that competitors Miller and
Coors both have non-U.S. ownership components.
Outside of the United States, Mexico reportedly is
A-B’s biggest market, turning in double-digit growth last year. In
China, the company acquired Harbin Brewery, producer of Hapi beer, and
increased its interest in Tsingtao to 27 percent, making it the largest
Miller Brewing Co.,
Milwaukee, came out swinging in 2004, and caught some in the industry off
guard. Miller’s domestic beer shipments were down 0.4 percent for
2004, but the company was up 5.9 percent in the second-half of the year,
thanks to improved sales of flagship Miller Lite.
With an ad campaign that took its cues from the Pepsi
Challenge of the 1970s, Miller Lite went after the competition with flavor
comparisons. The “Good Call” campaign gave Miller Lite a
much-needed boost, but there are those who feel taking potshots at the
competition was a bad call for the industry in general.
“Milwaukee and St. Louis got into a nasty battle
with each other last year and that damaged the beer category,” says
Bump Williams, executive vice president, general manager of Information
Resources Inc.’s beer, wine and spirits division.
A-B convinced several television networks to stop
airing Miller’s ads and then took false advertising complaints to the
Alcohol and Tobacco Tax and Trade Bureau. But the ATTTB recently ruled in
Miller’s favor, saying the ads did not violate regulations relating
to comparative advertising.
On the new products front, Miller is said to be
testing a new malt beverage called Brutal Fruit that is aimed at women. The
product hails from South Africa, where parent company SAB says it was
2005 has been a big year for Molson Coors, the company created by
the merger of Golden, Colo.’s Coors Brewing Co. and Montreal’s
Molson Inc. The companies called the move “a merger of equals,”
and cited cost synergies as one of its benefits, but first-quarter results
have been less positive. U.S volume was down 4.1 percent and volume in
Canada was off 7.2 percent for the quarter.
For 2004, Coors reports total shipments were down 1
percent vs. 2003, while U.S. shipments were down 0.7 percent. Net sales for
the year were up 7.6 percent, and 3 percent in the United States.
Among the first of Molson Coors’ moves was the announcement that it would close its Memphis,
Tenn., brewery in order to optimize its brewing and packaging operations.
While a smaller player in the United States, InBev, based in Leuven, Belgium,
became the world’s largest brewer by volume in 2004. The company
created by the merger of Belgium’s Interbrew and Brazil’s
AmBev, reported a 60 percent volume increase as a result of the merger,
with 3.3 percent organic growth in 2004. During the first quarter of 2005,
the company turned in 4.4 percent organic growth.
InBev’s U.S. business echoed the organic growth
trend at 3 percent in 2004, with strong performances from Beck’s,
Bass and Stella Artois. First-quarter ’05 results, however, were down
13.5 percent vs. the same period last year.
Regarding InBev’s U.S. prospects, IRI’s
Williams says Stella Artois and Bass are, “two big imports in limited
distribution with a great upside potential.”
The addition of AmBev’s Brahma, which the
company will be taking global this year, also will boost the import
portfolio. The Brazilian brand could help offset the loss of the FEMSA
brands that the company lost to Heineken in the
Heineken, best known in
the United States for its flagship Dutch beer, has expanded during the past
year to also include FEMSA’s Tecate, Dos Equis, Sol, Carta Blanca and
Bohemia brands. Heineken said the Mexican brands complement its lineup of
imports, and the move increased its volume 28 percent to give it a 26
percent share of the U.S. import market.
The company also announced it would delve farther into
the industry’s other big growth segment
— light beer — with the rollout of Heineken Premium Light Lager
later this year.