Imports are a mess. The Beer Institute announced that, in August, import shipments dropped another 70k barrels, or 2.6%. That brings imports down over 600k barrels or nearly 3% for the year so far. Leading the pack down are Dutch shipments, down 16% in August. Mexican shipments were up 3% in August, but down 2.4% YTD. Considering that crafts continue to gain share, it appears that 2008 is shaping up to be another bad year for foreign beer, and the recession that seems to be upon us may not make things any better.
But is the entire import segment really sick? To answer that question, we went to IRI’s Dan Wandel who helped us take a peek under the sheets of the import bed (okay, bad analogy, but you get the picture). Dan broke down imported beer into price segments, and their respective trends, at least in supermarkets, mirror that of general market beer: it’s good to be at the very top, or rock bottom, of the pricing rainbow, but you don’t want to be sandwiched in the middle. Again, a sorry mix of analogies, but it is what it is. For the analysis below, we’re looking at IRI supermarket scans, year-to-date, through September 7.
ECONOMY. Let’s start at the bottom. In the economy import segment, what Dan defines as import brands that sell for less than $23 a case at retail and represent 17% of all imports sold. These are mostly first tier Mexican and Canadian brands, with the one exception being the private label brand from El Salvador, Caguama. This segment’s volume is up 3.2%, lead by Tecate up 7.8%. The second largest brand in this segment is Labatt Blue, down 2%. The other winners in this category are Tecate Light, Caguama, and Carta Blanca. Tecate and Tecate Light gained nearly a share point of import volume.
SUB-PREMIUM. These are imports priced from $23 to $27 a case, representing nearly 9 share of imports. These brands are down 2.1% so far this year. While most of these brands are down (Fosters, St. Pauli, Moosehead, Molson XXX, Sol), there are a few shining stars, most notably Modelo Especial up 13.7%.
PREMIUM. These are the imports you know and love. This segment is by far the largest part of the import segment, controlling 64% of total import volume and dominated by Crown and HUSA. The price is between $27 and $31 a case. But it’s also the one losing the most share, down nearly a point, and down 0.6% in volume. Corona is down 2.8%, Heineken is up 1.6%, and Corona Light is down 1%. Pacifico is up 3.2%, and Beck’s is down 3.2%. Big winners are Dos Equis, up 20%, HPL up 10.6%, and Red Stripe up 14.4%.
SUPER PREMIUM. These are imports priced between $31 and $40 a case, consisting of 10% share of imports. It has the highest increase in both case and dollar sales compared to last year, up 9.5% and 11.9% respectively. A-B and DGUSA each have three of the top 10 super premium import brands, but HUSA has the largest, Newcastle Brown Ale, which is down 2% as it transitions. The next largest brand, Guinness, is down 0.8%. But once you get below those two big brands, the growth starts going into overdrive. Stella Artois is up 37.5%, Smithwicks is up 24%, Sapporo up 13%, Peroni up 37%, Boddington’s up 24%, Hoegaarden up 82%, etc. This is clearly the sweet spot of imported brands. I don’t think it’s a coincidence that these brands, with the exception of Peroni, Stella, and Sapporo, are high flavor ales, almost like crafts.
ULTRA PREMIUM. This are the low volume high end luxury brands, priced over $40 a case, and they are up 1.5%. This is a small category, consisting of only 0.3 share of total imports. It is lead by Lindeman’s Framboise Lambic, by far the largest brand in the group, which is up 5.9%. Chimay Grande Reserve is up 15%, while Samuel Smith Oatmeal Stout is down 6.4%.
So you can see that the sweet spot in imports is flavorful and full priced or cheap light lagers.
DON’T COUNT OUT THE GROCERY CHAINS
One of the largest grocery chains said that same-store sales for their latest quarter, not counting fuel sales, was up 5%. And that’s not all: Kroger says the last four weeks of the quarter have seen an acceleration of sales. Kroger also confirmed its same-store supermarket sales growth projection for the year of 4.5 to 5.5%. “Kroger has the right strategy in place to continue to serve our customers, associates and shareholders during this challenging economy,” said chief Dave Dillon. He added that Kroger has sufficient liquidity to take care of short-term borrowing needs, which some corporations are having trouble meeting because of the nation’s credit crisis.
BEER BRIEFS:
HUDEPOHL-SCHOENLING BREWING announced plans to commemorate the 30th anniversary of Hudy Delight light beer with a limited edition can. “The 30th Anniversary Hudy Delight commemorative can features a retro design inspired by the original 1978 graphics” said Greg Hardman, owner of Hudepohl-Schoenling Brewing Company.
BUD’S STOCK again fell below the 60 dollars a share mark yesterday. Of course, the market was a blood bath yesterday, but that spread still makes people nervous.
“Shoot for the moon. Even if you miss, you’ll land among the stars.”
-Les Brown
——— Sell Day Calendar ———-
Today’s Sell Day: 11
Sell days this month: 23
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: +1
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