Beer: The Market - US - December 2010

In this report, the second part of a two-part report on beer, Mintel takes an in-depth, market-centric view of the market. The consumer-centric view is covered in Mintel’s Beer: The Consumer—U.S., November 2010. The beer market faced numerous challenges in 2009, the recession being the key impediment to growth. Consumer demand for beer declined; dollar growth in the market came as brewers decided to increase prices despite a low-key economy. In order to provide purveyors with a clear picture of this multi-faceted market, Mintel conducted a comprehensive analysis of beer performance.

Table of contents

Scope and Themes
What you need to know
Definition
Data sources
Sales data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
Executive Summary
Beer volume declines in 2009; dollar sales growth through price inflation
Domestic beer outperforms imports
Domestic light declines for the first time since its inception
Domestic premium cedes share to domestic popular
Craft beer continues to shine; super-premium suffer from trading down
Imports suffer from the recession, competition from craft beer
Marketing budget stable despite weakness in the economy
Insights and Opportunities—a Market-centric View
Growing choices in craft beer—pros and cons
Social media—a risqué marketing tool or a medium to court consumers
Organic beer may require organic hops by 2013—ups and downs
Inspire Trends
Trend: Extend My Brand
Market Size and Forecast
Key points
Beer demand declines; price increases fuel dollar sales growth
Sales and forecast of beer
Figure 1: Total U.S. retail sales and forecast of beer, at current prices, 2005-15
Figure 2: Total U.S. retail sales and forecast of beer, at inflation-adjusted prices, 2005-15
Figure 3: Total U.S. volume sales of beer, 2005-10
Fan-chart forecast
Figure 4: Fan-chart forecast for beer, at best-, worst-, and central-case scenario, 2005-15
Figure 5: Fan-chart forecast for beer, at best-, worst-, and central-case scenario, 2005-15
Market Drivers
High unemployment rate continues to impede consumer spending
Figure 6: Employment status of the civilian non-institutional population 16 years and over, 2000-10
Key beer consumers—men, Hispanics, and blacks, hit hard by unemployment
Figure 7: Unemployment status among civilian non-institutional population, by gender and race/Hispanic origin, October 2009-October 2010
Obesity rates steady, but still a cause of concern
Figure 8: Percentage of population aged 20 and over who are overweight or obese* or extremely obese, 1988-2008
Male population growth important to the market
Figure 9: Population of men aged 21 or older, 2005-15
At-home beer consumption on the rise due to the recession; on-premise consumption declines
Figure 10: Influence of the recession on drinking behavior, by age, March 2010
Alcohol consumption at bars/restaurants, by age
Figure 11: Alcoholic beverage consumption at bars/restaurants compared to last year, by age, January 2010
Hispanics and blacks offer growth opportunities
Figure 12: U.S. Hispanic population aged 21+, 2005-15
Figure 13: U.S. black population aged 21+, 2005-15
Competitive Context
Spirits boast the biggest consumer base, outpaces beer in 2010
Figure 14: Trends in beer consumption versus other alcoholic beverages, May 2005-June 2010
Segment Performance
Key points
Domestic brews take share from imports
Domestic beers continue to raise prices; imported brews keep prices stable
Figure 15: Price of domestic and imported beer in FDMx, 2005-10
Total volume sales of beer, by segment
Figure 16: U.S. volume sales of beer, by segment, 2005-10
Figure 17: U.S. sales of beer, by segment and sub-segment, 2008 and 2010 (est.)
Segment Performance—Domestic Beer
Key points
Total volume sales of domestic beer
Figure 18: U.S. volume sales of domestic beer, 2005-10
Domestic beer—light beer
Light beer volume declines; suffers from trading down and economic woes
Innovation necessary to stimulate growth
Total volume sales of light beer
Figure 19: U.S. volume sales of light beer, 2005-10
Domestic beer—premium beer
Premium beers suffer from “death of the middle” trend
Lack of innovation and decline in ad budget exacerbate segment’s woes
Blacks, Hispanics, and young adults can be targeted through innovation
Total volume sales of premium beer
Figure 20: U.S. volume sales of premium beer, 2005-10
Domestic beer—popular beer
Unfavorable economy favors popular beer
Figure 21: Top 10 domestic beer brands, by volume growth rate between 2008 and 2009
Total volume sales of popular beer
Figure 22: U.S. volume sales of popular beer, 2005-10
Domestic beer—super-premium and craft beer
Craft beer growth makes up for the decline in super-premium
Craft has yet to tap women, blacks, and Hispanics
Super-premium beers suffer from trading down, competition from craft
Total volume sales of super-premium and craft beer
Figure 23: U.S. volume sales of super-premium and craft beer, 2005-10
Domestic beer—ice beer
Ice beer volume sales decline owing to the economy and lack of advertising
Growth potential by marketing to young adults and blacks
Total volume sales of ice beer
Figure 24: U.S. volume sales of ice beer, 2005-10
Domestic beer—malt liquor
Lack of universal appeal and advertising contribute to volume decline
Blacks and young adults offer growth potential
Total volume sales of malt liquor
Figure 25: U.S. volume sales of malt liquor, 2005-10
Domestic beer—flavored malt beverages
Segment fades amid distressed economy
New FDA ruling may further bleed sales from the segment
Total volume sales of flavored malt beverages
Figure 26: U.S. volume sales of flavored malt beverages, 2005-10
Segment Performance—Imported Beer
Key points
Total volume sales of imported beer
Figure 27: U.S. volume sales of imported beer, 2005-10
Imported beer—regular imported beer
Regular imports continue to dominate; face competition from craft
Total volume sales of regular imported beer
Figure 28: U.S. volume sales of regular imported beer, 2005-10
Imported beer—light imported beer
Light imports fail to sizzle despite strong obesity trends
Innovation in premium domestic light poses stiff competition for light imports
Total volume sales of light imported beer
Figure 29: U.S. volume sales of light imported beer, 2005-10
Retail Channels
Key points
Figure 30: U.S. sales of beer, by retail channel, 2008 and 2010
Retail Channels—On-premise
On-premise takes a hit during the recession; craft beer offers growth
Figure 31: Total U.S. on-premise volume sales of spirits, 2005-10
Figure 32: Total U.S. on-premise* dollar sales of beer, at current prices, 2005-10
Retail Channels—Off-premise
Key points
Figure 33: Total U.S. off-premise volume sales of spirits, 2005-10
Figure 34: Total U.S. off-premise dollar sales of beer, at current prices, 2005-10
Retail Channels—Convenience Stores
Convenience stores face growing competition from drug stores
Craft brews offer growth opportunities
Figure 35: U.S. sales of beer at convenience stores, 2005-10
Retail Channels—Liquor/Packaged Stores
Organize events to educate/inform consumers; especially about craft brews
Website communication
Figure 36: U.S. liquor/packaged stores dollar sales of beer, 2005-10
Retail Channels—Supermarkets
Craft brews selection and promotion can fuel growth
Figure 37: U.S. sales of beer at supermarkets, 2005-10
Companies and Brands
Key points
AB InBev commands nearly half of total volume; needs a craft in portfolio
MillerCoors grows market share despite weakness in flagship brands
Pabst Brewing Company set to receive new life
Heineken buys FEMSA
Crown Imports loses market share as many Mexican brands decline
Figure 38: U.S. beer sales of leading companies, by volume, 2008 and 2009
Brand Share—Domestic Light Beer
Key points
Top three brands post flat-to-declining sales
Super-premium light brands suffer from trading down
Value brands shine—take share from premium and super-premium brands
Ultra-light brands—MGD 64 and Select 55—show promising growth
Bud Light Lime posts strong growth despite the cut in ad dollars
Manufacturer and brand shares
Figure 39: U.S. brand sales by volume of domestic light beer, part 1, 2008 and 2009
Figure 40: U.S. brand sales by volume of domestic light beer, part 2, 2008 and 2009
Brand Share—Premium Beer
Key points
Budweiser continues the downward slide
Miller Genuine Draft—dismal performance
Land Shark, Budweiser American Ale, and Coors Extra Gold post growth
Manufacturer and brand shares
Figure 41: U.S. brand sales of premium beer, by volume, 2008 and 2009
Brand Share—Popular Beer
Key points
MillerCoors’ popular portfolio turns in mixed performance
AB InBev’s Busch gains
Pabst Blue Ribbon and Schlitz exhibit stellar growth
Manufacturer and brand shares
Figure 42: U.S. brand sales of popular beer, by volume, 2008 and 2009
Brand Share—Super-premium and Craft Beer
Key points
Blue Moon continues to shine
Yuengling maintains impressive growth
Michelob faces stiff competition from craft
Boston Beer and Sierra Nevada exhibit mixed performance
“Other” craft brands exhibit impressive growth
Manufacturer and brand shares
Figure 43: U.S. brand sales of super-premium and craft beer, by volume, part 1, 2008 and 2009
Figure 44: U.S. brand sales of super-premium and craft beer, by volume, part 2, 2008 and 2009
Brand Share—Ice Beer
Key points
Natural Ice and Bud Ice score big points
Keystone Ice continues its growth streak
Manufacturer and brand shares
Figure 45: U.S. brand sales of ice beer, by volume, 2008 and 2009
Brand Share—Malt Liquor
Key points
Steel Reserve—the leading brand declines
Most top brands do not get advertising budget
Manufacturer and brand shares
Figure 46: U.S. brand sales of malt liquor, by volume, 2008 and 2009
Brand Share—Flavored Malt Beverages
Key points
Diageo, MillerCoors, and AB InBev lose market share
Mike’s Hard beverage shows impressive growth amid innovation
Manufacturer and brand shares
Figure 47: U.S. brand sales of flavored malt beverages, by volume, 2008 and 2009
Brand Share—Regular Imported Beer
Key points
Dos Equis is the star brand of 2009; brand outpaces all imports
Figure 48: Dos Equis TV ad, The Most Interesting Man in the World, 2010
Corona Extra and Heineken continue the downward slide
Modelo Especial shows impressive gain
Manufacturer and brand shares
Figure 49: U.S. brand sales of regular imported beer, by volume, part 1, 2008 and 2009
Figure 50: U.S. brand sales of regular imported beer, by volume, part 2, 2008 and 2009
Brand Share—Light Imported Beer
Key points
Tecate Light and Corona Light show gains
Manufacturer and brand shares
Figure 51: U.S. brand sales of light imported beer, by volume, 2008 and 2009
Brand Qualities
Blue Moon—a journey toward becoming the most popular craft beer
Figure 52: Blue Moon TV ad, artfully crafted, 2010
Innovation and Innovators
Environmentally friendly packaging and seasonal brews top claims in 2010
Figure 53: Claims in new beer products, 2010*
Environmentally friendly packaging and brewing practices
Seasonal and limited edition brews gain traction in new product launches
All-natural and no-preservative claims resonate with current health trends
Organic beer claims remain stable in 2010
Marketing Strategies
Choice of diverse media for brewers
Beer advertising budget remains stable
Figure 54: Total beverage alcohol advertising spending, 2008-09
Domestic brewers attempt to shore up declining light brands
Figure 55: Advertising expenditure on domestic beer, by brewer and brand, part 1, 2008 and 2009
Figure 56: Advertising expenditure on domestic beer, by brewer and brand, part 2, 2008 and 2009
Bud Light and Budweiser
Bud Light replaces MillerCoors’ brands as the NFL sponsor
Bud Light Port Paradise cruise sweepstakes
Bud Light offers good time
Figure 57: Bud Light TV ad, Swat team, 2010
Budweiser ads focus on young males and drinkability
Figure 58: Budweiser TV ad, Budweiser used as a currency, 2010
MGD 64
MGD 64 takes on Michelob Ultra
Figure 59: MGD 64 TV ad, MGD 64 has less calories in comparison to Michelob Ultra, 2010
MGD 64 on Facebook
Heineken’s advertising budget remains stable; Crown Imports’ down
Figure 60: Advertising expenditure on imported beer, by brewer and brand, part 1, 2008 and 2009
Figure 61: Advertising expenditure on imported beer, by brewer and brand, part 2, 2008 and 2009
Heineken takes a humorous turn in TV ad
Figure 62: Heineken TV ad, the guy ponders on hitting on bosses’ daughter, 2010
Corona Extra continues with the beach fun
Figure 63: Corona Extra TV ad, happy hour, 2010
Appendix—Trade Associations

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By sector: Beer (in Beer & Cider)

By market: United States (in North America)