Imported beer brands lead the six-pack in retail sales growth

Drug Store News,  August 30, 1999  by Jennifer Kulpa

• E-mail
• Print
• Link

According to a recent Maritz AmeriPoll, 51 percent of all Americans in the 21-plus age group have hoisted a beer in the past month, with the average number of brews consumed in that time frame actually closer to 19 among those who drink alcohol.

Other statistics that emerged from the poll, however, told a story that was less than good news to drug store retailers that operate in the states where it is legal for them to sell beer. For example, women and older consumers--who shop drug stores the most--consume the smallest volume of beer. In the Maritz poll, conducted by Maritz Marketing Research, women reported drinking about half as much as men each month, and respondants 65 and older were the least likely of any age group to drink beer.

More encouraging was the finding that 63 percent of all beer is consumed at home, a percentage that increases with age.

Making the beer section more attractive to the drug store target customer, however, is not the only way drug stores can boost their performance in this segment, though, because drug store shoppers frequently are stocking a household that includes members of the thirstier demographics. For that reason, retailers agreed that merchandising partnerships with beer suppliers that are paying increased attention to this channel are leading to slow but notable increases in beer sales.

In fact, according to ACNielsen, drug stores made a turnaround in beer during the 52 weeks ended July 7, 1999, improving performance from a 2.7 percent drop the previous year to a 6.3 percent increase for the total segment. This improved performance was partly due to an easing of the price discounting that had resulted from intense competition among domestic brewers and dragged down dollar increases in recent years. Indeed, in the past year, dollar sales increased twice as fast as unit sales for this channel.

That trend also described most beer sales in the grocery and convenience channels as well last year, except for craft brands. This segment posted faster increases in unit sales than in dollars at drug and c-stores. That indicates that specialty brands are coming down in price at those two outlets, where retailers said consumer interest always has been small compared to the Buds and Millers, but is waning even further.

Imports still reign

The story--although it is not a new one--is still in imports. Within the past two years, ACNielsen's statistics show imports at drug stores increasing 22.4 percent and 34.4 percent, respectively. The same trend is apparent in grocery and convenience stores. Although the Maritz poll indicates that consumers believe beer advertising has little impact on their purchase decisions, efforts by the top two imports, Heineken and Corona Extra, have made those brands more visible within mainstream channels in the United States than ever.

Corona--riding a wave of interest in all things Mexican--climbed to the top of the import chart two years ago, and helped its case further by creating the larger package sizes suitable to drug, supermarket and mass channel customers. In addition, the brand launched an aggressive print and television advertising campaign. Grupo Modelo the Mexico City-based brewer of Corona, also just announced a 4 percent price increase on its U.S. imports.

Heineken's new "keg can" packaging fits the drug store profile, which skews toward cans. The company also conducted a high-profile promotional effort with (yeah, baby!) "Austin Powers: the Spy who Shagged Me" this spring and summer.

                       Imports still lead beer growth

Beer type    Channel         $ sales  $ sales
                         in millions % change
Domestic     Grocery        $4,872.6      1.4%
             Convenience     7,560.3      6.3
             Drug              836.6      3.5
Imports      Grocery           897.3     20.2
             Convenience       429.2     23.5
             Drug              103.5     34.4
Craft brands Grocery           273.8      0.2
             Convenience        83.7      5.8
             Drug               15.7     14.8
Total beer   Grocery         6,043.0      3.7
             Convenience     8,073.2      7.1
             Drug              955.8      6.3


Source: ACNielsen, for the 52 weeks ending July 7, 1999.
                         Budweiser still 'the king
                         of beers' with consumers

              % citing as
Brand        their favorite
Budweiser          27%
Miller             17
Coors              11
Michelob            9
Busch               4
Corona              4
Heineken            3
Molson              2
Samuel Adams        2


Source: Maritz AmeriPoll/Maritz Marketing Research
                           It's all in the brand

                                      % agreeing
Statement                           with statement
Not likely to buy
 based on ads                             88%
In-store displays do not
 affect purchase                          83
Purchase based on brand                   70
Recalled seeing or hearing
 a beer ad in the last month              54
Will try new brand                        49
Price promotions affect purchase          40
Somewhat likely to buy based on ads        9
Very likely to buy based on ads            2


Source: Maritz AmeriPoll/Maritz Marketing Research.

COPYRIGHT 1999 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2008 Gale, Cengage Learning